Final Management Project

Name: Alkis Meletiou ID: 142349

Professor: Dr. Jovana Stanisljevic
Academic Year: 2014 – 2016
Master’s Program: MSc in Business Development
Topic: ‘‘The Impact of Mobile Advertising on Customer Engagement ”
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Table of Contents
Chapter 1: Introduction .............................................................................................................. 4
1.1. Background ..................................................................................................................... 4
1.2. Statement of Research Problem and Research Motivation ............................................. 8
1.3. Research Aim and Objectives ......................................................................................... 8
1.4. Research Questions ......................................................................................................... 9
1.5. Significance and Purpose of the Study ............................................................................ 9
1.6. Scope of the Study......................................................................................................... 10
1.7. Outline of the Chapters ................................................................................................. 10
Chapter 2: Literature Review ................................................................................................... 12
2.1. Introduction ................................................................................................................... 12
2.2. Mobile Advertising ....................................................................................................... 12
2.3. Customer Engagement .................................................................................................. 15
2.4. Mobile advertising and the Role of Smartphones ......................................................... 19
2.5. The Influence of Social Media in Mobile Advertising and Establishing Customer
Engagement .......................................................................................................................... 22
2.6. The Impact of Mobile Advertising on Consumers ........................................................ 24
Chapter 3: Methodology .......................................................................................................... 29
3.1. Theoretical Discussion .................................................................................................. 29
3.2. Research Approach ....................................................................................................... 30
3.3. Research Purpose .......................................................................................................... 31
3.4. Research Design ............................................................................................................ 32
3.5. Data Source ................................................................................................................... 32
3.6. Research Population ...................................................................................................... 33
3.7. Sampling Strategy ......................................................................................................... 33
3.8. Sample Size ................................................................................................................... 34
3.9. Research Instrument ...................................................................................................... 34
3.10. Statistical Methods ...................................................................................................... 34
3.11. Variable Description ................................................................................................... 35
3.12. Model Hypotheses ....................................................................................................... 37
3.13. Ethical Consideration .................................................................................................. 38
3.14. Methodology Summary ............................................................................................... 38
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Chapter 4: Data Analysis ......................................................................................................... 40

4.1. Introduction ................................................................................................................... 40
4.2. Smartphone Use ............................................................................................................ 40
4.3. Descriptive Statistics ..................................................................................................... 42
4.4. Reliability Test .............................................................................................................. 44
4.5. Factor Analysis .............................................................................................................. 46
4.6. Correlation Analysis ...................................................................................................... 50
4.7. Regression Analysis ...................................................................................................... 52
Chapter 5: Conclusion.............................................................................................................. 56
5.1. Conclusion..................................................................................................................... 56
5.2. Theoretical Implications ................................................................................................ 63
5.3. Managerial Implications ................................................................................................ 64
5.4. Recommendations ......................................................................................................... 64
Chapter 6: Limitations and Areas of Future Research ............................................................. 66
6.1. Research Limitations ..................................................................................................... 66
6.2. Areas of Future Research .............................................................................................. 67
References ................................................................................................................................ 69
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The Impact of Mobile Advertising on Customer Engagement

Chapter 1: Introduction

1.1. Background

In the recent years, the world is experiencing explosive growth in digital advertising
in the mobile channels. According to Tierney (2014), due to its popularity and effectiveness,
there is significant growth of resources allocated by major brands on mobile advertising,
which is expected to quadruple by 2017 to $36 billion. It is found that, in the consumer
market, mobile ads can have a significant influence, which consequently affects their
purchase intention. However, the extent of significance and power of mobile advertisement
may differ with high and low involvement products, and the importance and practical use of
the products (Bart, Stephen & Sarvary, 2014). With an increasing mobile devices’ penetration
rate, for the marketers, a new opportunity is created by mobile advertising to transmit their
promotional messages. The Mobile advertising is regarded as a business of encouraging
consumers, using a wireless medium or channel, to purchase goods and services. It allows
sending of unique, customized, and personalized advertisement. Mobile advertising can
engage mobile phone users through different communication channels, including SMS –
short message service, MMS – multimedia messaging service, and the mobile internet
(Wong, Tan, Tan & Ooi, 2015).

As compared to other digital advertising formats, mobile is growing faster. However,

there has been a disparity, historically, between the amount of advertisement expenditure on
the medium and the amount of time spent on the mobile devices, smartphones and tablets. It
is expected that as the enthusiasm and trend in the mobile-optimized advertisement formats
are increasing and marketers are learning its effective use, the gap between the advertisement
expenditure and mobile use will narrow substantially. Especially, in the United States, the
mobile ad expenditure is growing significantly by a five-year CAGR of 43%, and would
reach $42 billion in 2018 (Hoelzel, 2015). A unique opportunity is provided by mobile
advertising on a personal level, to connect with the consumers, with ads that reflect their need
states. The global smartphone adoption, in the year 2014, reached 25% of the world
population, which was an all-time high. The smartphone proliferation around the world has
provided an excellent opportunity to the advertisers to target and attract consumers at a higher
level, with click-for-directions and click-for-call ads. According to Marin (2014), the mobile
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device adoption, as compared to desktop, continues to grow amongst the consumers. The
mobile advertising budget, due to the shift in the digital advertising paradigm, is predicted to
exceed the advertising budget related to the desktop.

Figure – 1.1. Global Media Advertisement Expenditure. Source: Marin (2014)

The figure 1.1 is showing the global mobile advertisement spend, along with the
predicted values. The mobile ad expenditure, as illustrated by the bar chart, in increasing each
year, and it is predicted to reach the level of $94.91 billion of annual mobile ad spend.
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Figure – 1.2. Global Mobile Advertising Spend Growth – 2014. Source: Marin (2014)

The above figure is illustrating the percentage growth in the global mobile advertising
expenditure for the year 2014. According to the figure, the Eurozone recorded the highest
growth in mobile advertising spending during the year, which equals 46.8%. The United
States, in this context, is following the trend and recorded 34.4% growth. The mobile
advertisement expenditure is also increased significantly in the UK and Australia region by
22.6% and 8.3% respectively.

Customer engagement is an important concept in marketing, which defines the

relationship between a customer and a brand. The businesses around the world realize the fact
that customer loyalty with a brand is influenced by frequent positive engagements (Vivek,
Beatty & Morgan, 2012). According to Carter (2015), with every brand interaction, customer
engagement is built (or damaged), while the brand is connected, with each of those
interactions, to the needs and preferences of the customers. The highly engaged customers’
behaviour can be represented by the characteristics: they are product/service evangelists,
purchasers, responders and loyal.

Customers are now more powerful, with the rise of social and mobile technologies. It
is now important to the marketers to develop strategies to connect and engage with their
customers, due to the increasing ability of the customers to find information and to remain in
an always-connected status, which provides control of their experience. Businesses, in
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today’s ever-changing landscape, are striving hard to offer personalized and real-time
experiences to their customers. Customer engagement now days is taking many forms,
whether a sale promotion mobile push notification or an order confirming email. Businesses
have an opportunity, by promoting consistent and relevant communication, to engage with
their audiences. Companies around the world have developed and transformed their
marketing strategies to enhance their focus on strengthening customer engagement. To better
engage with their customers, the key strategies that companies are adopting, include
providing real-time benefits to the customers; using digital technologies or social media as a
tool to provide more value; Simplifying the customers’ experience; analysing customer data
to uncover hidden correlations; embracing and leveraging customer feedback; and
anticipating the customers’ needs (Maguire, 2015).

The use of Mobile advertising by companies to market their products or services is

also one the key strategies to enhance or strengthen customer engagement. This research
project aims to establish an association between the above two constructs: Mobile advertising
and customer engagement. It is based on the evaluation of the impact or influence of mobile
advertisement on customer engagement. For this purpose, the study measures and evaluates
the two variables, and proposes a conceptual framework. In the light of the proposed
framework, the research study can examine the relationship statistically. Globally, for the
sales and marketing teams, the tools of attracting and retaining customers have gained
significance in the context of enhancing customer engagement. For businesses, the concept
has become a priority in the recent years, and will become their primary growth driver. The
companies and their sales and marketing teams are therefore striving hard to find innovate
and new ways to engage their customers. To close or minimise the gap between the enterprise
and consumer; increase productivity; foster collaboration among employees; and enhance
interaction with the customers, the companies are effectively adopting mobile applications
and devices. According to Valenzuela (2014), the main methods to drive customer
engagement using mobile technologies include focused content and solution dashboards,
simplified work process, and anytime access via apps. The use of mobile advertising is a
significant source of competitive advantage and customer engagement. It is predicted that the
business models in future would focus more on establishing human relationships that are
more personalized, between the company and the customers, while mobile advertising is
poised to target and bridge the gap.
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1.2. Statement of Research Problem and Research Motivation

From the academic point of view, the subject of mobile marketing and advertising is
studied widely by the researchers globally (Tsang, Ho, & Liang, 2004; Bart, Stephen &
Sarvary, 2014; Johnston et al., 2012; Kim & Han, 2012; Wong, Tan, Tan & Ooi, 2015).
Previous literature, in the recent years, has also covered the concept of customer engagement,
especially with the perspective of online media (Sashi, 2012; Hammedi et al. 2015;
Gummeris, Liljander, Weman & Pihlström, 2012). However, the specific association between
the two variables that is the impact of mobile advertising on customer engagement is not
widely explored. Therefore, there is a need to develop and examine the relationship and
measure the impact of mobile advertising on customer engagement, which would contribute
to the existing literature on the subject. The research study specifically focuses on the
smartphone advertising, which utilises Internet to communicate with the customers. Among
the smartphone users and the existing and potential customers, the project is concentrating on
the segment of university students.

With an enormous expansion in the use and reliance on mobile devices and social
media, there has been a shift in the direction and speed of interactions, with the expectation of
the consumers, in their conversations with the brand, to have a real-time relevance. Now, the
ability of a company to build long-lasting relationship with their customers depends on
effective communication, at one time, across a variety of channels. A continual stream of
two-way dialogue is required between the brand and the customer, which is complemented by
the relevance and speed of communication. The marketers and the advertisers, to effectively
target and engage their customers, are coming up with innovative ideas, to attract new
customers and enhance the experience of existing ones. Effective mobile advertising is a
significant addition to the advertising campaign for a product or service, and an important
tool for value creation. The research study is motivated by the significance of the two
concepts: mobile advertising and customer engagement, and the association between the two
variables. It aims to explore the impact of the determinants/components of mobile advertising
on customer engagement statistically, which would lead us to understand the relationship,
with the perspective of the customers (university students).

1.3. Research Aim and Objectives

The research study aims to explore the relationship between mobile advertising and
customer engagement. As discussed, the research study is specifically focusing on the
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smartphone ad channel within the mobile advertising, which utilises the Internet to
communicate with the customers and examining the market segment of university students.
For this purpose, it proposes the following research objectives:

I. To identify and measure the components/determinants of smartphone advertising. The

smartphone advertising may consist of mobile web advertising, mobile video and
application advertising units.
II. To examine the impact of the components of the smartphone (mobile) advertising on
customer engagement i.e. to investigate the significance and nature of influence and
evaluate how the viewers (university students) of internet-based mobile ads using
their smartphones get engaged with the advertised product/brand.

1.4. Research Questions

The main research question of the study is:

“What is the impact of the components of smartphone (mobile) advertising on customer

engagement i.e. how the viewers (university students) of internet-based mobile ads, using
their smartphones, get engaged with the advertised product/brand based on the factors?”

On the basis of the above research questions, following sub-questions are formulated:

I. What are the principal components or determinants of smartphone advertising (which

comprises of mobile web advertising, mobile video and application advertising units)?
II. What is nature of relationship between the components of smartphone advertising on
customer engagement?

The research study, to evaluate and answer the research questions, would identify the
determinants of smartphone advertising with the help of the literature review. It will also
develop a conceptual framework/model to explain the relationships. The impact of the
components of mobile advertising on customer engagement is measured statistically. In other
words, the study is evaluating, whether or not, the components or the associated mobile
advertising variables are significantly influencing customer engagement, which can be
termed as a marketing success.

1.5. Significance and Purpose of the Study

There is a tremendous increase in the use of mobile/smartphone globally. In the recent

years, for communications, the involvements of using mobile devices have become an
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essential part of daily activities of the consumers. The higher penetration rate of mobile
phones coupled with the continuing evolution of Internet has created a new marketing
activities’ platform i.e. mobile advertising. The substantial use of mobile internet due to high
speed and affordable mobile data connections and availability of Wi-Fi technology, have
enabled frequent and easy access to the advertisements and have stimulated marketers to
adopt the specific medium to target consumers. With the perspective of consumer
engagement, businesses are striving hard to engage the customer, which affects their sales
and revenue. The level of engagement of the customers influences customer loyalty and the
company’s profitability (Sorenson & Adkins, 2014). According to Koetsier (2015), there is a
massive media shift, where major brands and companies are embracing mobile advertising.
For instance, Disney achieved seven times more customer engagement using mobile
advertising and targeting the smart audience. Therefore, it is important for businesses to
engage their customers in understanding their expectations and need, discover influential
factors for their involvement, increase retention, enhance company reputation and brand
loyalty, and acquire new customers.

The purpose of the study, as discussed before, is to examine the influence of mobile
phone advertising on customer engagement. The research would not only identify and explain
the main components of mobile advertising but also evaluate their impact on customer
engagement, which is useful to analyse the effectiveness of the mobile advertising campaign
adopted by the marketers.

1.6. Scope of the Study

The scope of a research study defines the level of detail and the area of knowledge
covered. In this dissertation, to evaluate the association between mobile advertising and
customer engagement, the scope of the study is limited to the smartphone ad channel, which
consists of the mobile web advertising, mobile video and application advertising units. The
research study, in the context of customer engagement, is focusing on the GEM University
students to evaluate the research problem.

1.7. Outline of the Chapters

The first chapter i.e. the introductory part of the dissertation includes the background
of the research (related to mobile advertising and customer engagement), Statement of
Research Problem and Research Motivation, the research aim and objectives, research
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questions, the significance and the scope of the study. The outline or overview of the other
chapters of the research study is as follows:

I. Chapter 2 - Literature Review: This chapter covers the theoretical part of the thesis. It
discusses previous literature/studies/work/empirical researches on the concepts of
mobile advertising, customer engagement, and the association between the two
factors. The chapter constitutes a major part of the study. It also identifies and
highlights the literature gap and the key findings.
II. Chapter 3 – Methodology: In this chapter, the research approach, purpose and
research design are discussed. It also elaborates the research population, sample size,
data source of the study, research instrument, statistical techniques applied to the data,
proposed model and hypotheses, and the variables description. The aim of the chapter
is to provide a strategy/guideline about how the research problem/questions are
evaluated.
III. Chapter 4 - Data Analysis: The chapter analyses the research hypotheses statistically.
The data for the study, comprising of the variables/items related to mobile advertising
and customer engagement, are collected using multiple item questionnaire (Likert
scale), from the respondents directly, and analysed in the chapter using descriptive
statistics, factor analysis and regression analysis. The chapter also includes the
discussion of the findings.
IV. Chapter 5 - Conclusion and Recommendations: The chapter summarises and
concludes the research thesis, and discusses whether the proposed hypotheses are
accepted/rejected. It also discusses the implications of the subject explored and
provides recommendations.
V. Chapter 6 – Limitations and Areas of future research: This chapter of the dissertation
identifies the limitations and other relevant issues. The chapter also
suggests/recommends areas of future research.
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Chapter 2: Literature Review

2.1. Introduction

This chapter of the research study, while explaining the impact of Mobile advertising
on Customer Engagement, reviews the literature on the subject to explore the problem under
discussion and identify the main components and issues pertaining to mobile/smartphone
advertising and the concept of customer engagement. The chapter reviews and discusses the
theories and empirical analyses related to mobile advertising, customer engagement, the role
of smartphones, the influence of social media with the perspective of mobile advertising and
customer engagement, and the Impact of Mobile Advertising on Consumers.

2.2. Mobile Advertising

Mobile advertising, in today’s world, is regarded as one of the most adopted and fast-
growing formats of advertising. The global spending, in 2013, was approximately $16.7
billion, in the context of mobile advertising. By the year 2017, the expenditure is expected to
exceed $62.8 billion. In mobile advertising, the method of mobile display advertising (MDA)
is found to be the most prevalent type, which comprises of banners in mobile applications and
mobile web pages. In increasing the purchase intention and the favourable attitude of the
consumers towards the products, Bart, Stephen, and Sarvary (2014) examines the association
between the MDA campaigns and the product characteristics. The data on a large scale,
during the time span of 2007 -2010, is collected involving 54 United States MDA campaigns
and 39,946 consumer, revealed that the impact of MDA campaigns on purchase intentions
and favourable attitudes of the consumers is significant and positive at the time when the
associated products were utilitarian and higher involvement. The study employs established
theories of persuasion and information processing to explain the research findings, and
suggests that the effective application of MDAs stimulate product recall in the consumers.

Johnston, Komulainen, Ristola and Ulkuniemi (2012) describe that due to significant
innovations in technology, the landscape of mobile service is changing quickly. It is however
unclear, due to the emergent nature of business field related to mobile, that what would be the
success’s driving forces and what kind of services would succeed. In the context of mobile
advertising and mobile services, the study identifies the critical value elements, with a focus
on small retail firms. The small retailers not only discover the channel of advertising as useful
and enticing, but also find the full exploitation of this new medium of communication
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challenging. According to the study, the rapid development of information technology has
played a significant role in the changing the current business scenario. In order to facilitate
and strengthen the businesses, new mobile technologies are increasingly utilized by the
companies, which also ensure competitiveness in a turbulent business environment. The
study emphasizes that it is important for the advertiser (using mobile advertising) and the
customers to actively involve and engage in the mobile service’s co-creation, it is difficult to
reach the potential of value creation.

Chen and Hsieh (2012) examine the social impact, trends and key attributes of
personalized mobile advertising. According to the study, as means of communication,
advertising media creates different communication and marketing results among customers.
Different traditional ad channels, including radio, TV, magazine, and newspaper, over the
years, have provided a one-way media by communicating and broadcasting information. The
study explains that advertising is now using the mode of interactive communications with the
widespread internet application. In the advent of mobile phone devices and 3G mobile
communication systems, the preferences of consumers can be pre-identified and a multimedia
format can be used to deliver the advertising message, at the right place and at the right time.
Meeting the needs of the consumer using personalized mobile advertising has now become an
important issue in the new advertisement possibility. The research study, in the context of
personalized mobile advertising message, identifies the key personalized attributes using the
fuzzy Delphi method. According to the results, six important personalized advertisements’
design attributes are identified, which includes type of mobile device, brand, interest,
promotion, preference, and price. To ensure the proper use of advertising resources and
facilitate the mobile advertising industry development, the study can serve as a guideline
source.

The use of mobile phones or m-devices has now become a vital component of daily
activities of consumers. In addition, the high penetration rate of mobile phones along with
continuing evolution of internet has created a new marketing activities platform, which is
called as mobile advertising. With the increasing adoption and use mobile phone
technologies, the concept of mobile advertising is widely embraced and implemented by the
marketers. In the recent years, for communications, the involvements of using mobile
devices, have become an essential part of daily activities of the consumers. The higher
penetration rate of mobile phones coupled with the continuing evolutions of Internet, have
created a new marketing activities’ platform i.e. mobile advertising. According to Wong,
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Tan, Tan and Ooi (2015), the emergence of mobile advertising has set a new advertising
platform, and it continued to advance. In using mobile advertising, the study evaluates the
factors affecting behavioural intention of consumers, by proposing the Use of Technology
(UT) and Unified Theory of Acceptance (UTA) model extension, with mobile skilfulness,
perceived enjoyment and information technology’s perceived innovativeness. The findings of
study, extracted using structural equation modelling, reveal that the UT/UTA constructs have
significant positive impact on the behavioural intention. To the mobile marketers and the
scholars, the research model established in the study, provides useful insights to facilitate
mobile advertising growth, in the mobile market environment.

Scharl, Dickinger and Murphy (2005) discuss the success factors and the diffusion of
mobile marketing. According to the study, the major benefit of mobile advertising is direct
communication or contact with the consumers. The study reviews and investigates the
concept of mobile marketing, and evaluates its most successful form i.e. SMS. It conducts
qualitative interviews with European experts and performs Fortune Global 500 websites’
quantitative analysis to evaluate the subject. The diffusion of SMS technology and the mobile
marketing campaigns is explored using the content analysis. The study develops a conceptual
model with the help of the qualitative survey and the literature review, for successful SMS
advertising, which distinguishes the success factors categories: media characteristics (media
cost, product fit, transmission process and device technology) and message (content,
consumer control and personalization), which influence consumer attention, intention and
behaviour.

The advertising channel of mobile phone has evolved from the SMS advertisements to
the mobile web ads, due to rapid advances in mobile communications. Li and Stoller (2007)
evaluate the mobile web advertising effectiveness with the help of field experiment. Using a
survey design (pre-campaign and during-campaign), the research examined the influence of
mobile advertising over brand association, brand recall, and purchase intent. According to the
results of the study, the impact of exposure to mobile advertisement is substantial on brand
recall and moderate on purchase intent and brand association. The study discusses that it is
important to measure the effective of mobile advertising, which could be done using
traditional marketing industry metrics.

Kaasinen and Yoon (2013), in the context of mobile advertising, proposes a service
engagement model. According to the study, the use of smartphone devices in increasing
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continuously, and more people are carrying smart mobile devices. However, it is often argued
that the mobile advertisements are not context-sensitive. They might be not relevant to
interests and current surroundings of the users. Therefore, the study stresses on the need for a
service engagement model, for smartphone/mobile advertising, which is based on the
behaviour of the users. According to the study, the service engagement model consists of the
sensing, analysis, personalization, engagement and advertising phases. The study reveals that
for mobile advertising, the service engagement model, which is based on the user behaviour,
provides various benefits for the users and companies, which includes increased interest and
care for the customer and more sales revenue for the companies.

2.3. Customer Engagement

In the context of customer engagement, previous literature has proposed a number of

engagement-based concepts, which include customer engagement behaviour, customer brand
engagement, user-generated hotel reviews, customer engagement cycle, online customer
engagement, community engagement, customer engagement value, customer engagement
behaviour’s co-creation. Previous research studies have focused on the concept in terms of its
behavioural manifestations toward a brand/company, while others have defined it in terms of
psychological state (Cabiddu, Carlo, & Piccoli, 2014).

Gummerus, Lijander, Weman and Pihlstrom (2012) discuss that the concept of
customer engagement has recently emerged to capture the behavioural activities of the
customers toward a frim. According to the study, both customers and the firms are offered
new ways to engage by the brand communities. The companies are aiming to learn from and
about customers, disseminate information, influence perceptions of members about the brand,
and engage with loyal customers. The behaviours that go beyond transactions are termed as
customer engagement. More specifically, they are referred as the behavioural manifestations
of the customers, resulting from motivational drivers, having a firm or brand focus beyond
purchase and entail interactive experiences of the customers with the brand. The study
identifies that customer engagement can be classified into Transactional Engagement
Behaviours (TEB) and the Community Engagement Behaviours (CEB). Moreover, it
identifies three benefits of the relationship, which includes economic benefits, entertainment
benefits, and social benefits. The benefits received are largely influenced by the engagement
behaviours. The study further reveals that the concept of CE is relatively new and has scarce
empirical research and theoretical evidence.
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Since the early twentieth century, economies and societies have changed dramatically,
changing the concept of community accordingly. The consumption communities came into
existence, with the interactive digital media introduction, where the social identities of the
customers are based on their consumptive role. Hammedi, Kandampully, Zhang and
Bouquiaux (2015) explain that the online brand communities’ emergence and success have
attracted considerable interest in the marketplace. The study focuses on online customer
engagement, and determines the conditions in which social environments are created by
people, and investigates the connections’ drivers to a focal online brand community. The
study examines the multi-community networks’ composition, focusing on the centrality and
density of brand communities. It proposes a model, in the light of previous literature, which
examines social relationships of the customers with multiple brand communities. The
research performs a survey covering eight brand communities, which encompass 290
participants, and uses structural equation modelling for the analysis. According to the
analysis, the connections to other communities are enhanced by personal identification with a
core community of brand. In addition, a functionality-driven approach is chosen by some
core brand members, in creating social environments. The study focuses on the significance
of strengthening the customer-brand association and extends the understanding of the
motivation of online brand community.

According to Sashi (2012), the concept of customer engagement, in the last few years,
has emerged as a topic of great interest worldwide, to consultants and managers in diverse
companies and industries. The emergence of new digital tools and technologies and the
continued evolution of internet has paralleled the enhancing interest in customer engagement.
The ability of social media to establish conversations and its interactive nature has excited the
marketers to better focus on the customers and satisfy their needs. The study explains that
customer engagement, by providing superior values, focuses on satisfying customers to build
commitment and trust in long-term relationships and develops a customer engagement cycle
model. A customer engagement cycle is constituted in the process of building and developing
customer engagement, which consists of the phases/stages of connection, communication,
contentment, retention, advocacy, commitment and engagement. Moreover, the research
study presents four types of relationships in the customer engagement matrix, depending on
the degree of emotional bonds and relational exchange, which include fans, loyal customers,
delighted customers, and transactional customers. The study reveals that customers are turned
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into ‘fans’ through customer engagement, however it is important for the customers to
process though the customer engagement cycle.

Vivek, Beatty, and Morgan (2012) explore the scope and nature of customer
engagement, which is considered as important relationship marketing’s component. The
study defines the concept of customer engagement as the intensity of the participation of an
individual in and connection with the offerings and/or activities of an organization, initiated
by the organization or the customer. The study argues that customer engagement is composed
of social, behavioural, emotional or cognitive elements. According to the model provided by
the research, regarding customer engagement, the involvement and participation of potential
and current customers serve as Customer engagement’s antecedents, while brand community
involvement, loyalty, word of mouth, affective commitment, trust, and value are potential
consequences.

During the time of market volatility and intense competition, for companies, customer
loyalty is regarded as a promising revenue source. The executives of the companies are now
increasingly relying on creating and managing customer value, and achieving customer
loyalty. According to Verma (2014), Customer engagement is the key to establish customer
loyalty. It is a component of relationship marketing, which aids reinforcement of customer
experience and interaction. Gambetti and Graffigna (2010) discuss the concept of customer
engagement, and explain that, in the brand management strategies, the concept is emerging as
a central concern. The study stresses on the need to understand the notion of customer
engagement as it is new in the market, and therefore it is important to understand the true
nature of engagement. The study, using T-lab software, conducts a systematic and an
exploratory content analysis of the customer engagement concept in the communication and
marketing literature. The study raises both methodological and managerial issues regarding
the practice and concept of customer engagement.

Šonkova and Grabowska (2015) investigate the best way for customer engagement by
comparing the pros and cons of relationship and transactional marketing. Using the data
provided by senior-level global marketers (100), the study provides relevant insights. It
outlines the essence of relationship and transactional marketing, and the presents the data
analysis. According to the results, there is a growing role of relationship marketing on
customer engagement. Companies around the world are using the concept of relationship
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marketing to reach and exceed expectations of the customers by implementing proper

strategy of relationship marketing.

Yu, Veeck and You (2015) examine the customer engagement behaviour by
developing and validating scale. The research study argues that previous literature on the
behaviour related to customer engagement is mostly descriptive and lacks empirical evidence.
The study defines the customer engagement behaviour (CEB) based on the value co-creation
theory and Service-dominant Logic. The CEB is defined as the behavioural manifestations of
the customers that have a firm or brand focus resulting from motivational drivers. The scale
development consists of item generation; item purification; and validation of the scale. Using
a sample 421 respondents, where data is collected through questionnaire survey, the study
examines the influence of customer relationship, brand attachment, self-enhancement, and
brand loyalty on the CEB. The hypotheses testing reveal that each of four variables are
significantly and positively associated with CEB. The study suggests that a company should
consider customers as co-creator and give up product dominant logic. A firm/company may
adopt a strategy of inviting customers to join development of new product to influence and
increase their engagement with the product.

In the marketing literature, the concept of customer engagement (CE) is relatively

new and receiving considerable attention in the recent years. In the context of social media,
the phenomenon is particularly important due to abundance of social networking channels,
online communities, and customer support forums, which provides an opportunity to increase
interaction with the customer and enhance CE. According to Jayasingh and Venkatesh (2015)
CE can be defined as behavioural manifestation of the customers towards a firm or brand. It
is also observed that, in enhancing the performance of a business, engaged customers can
play a critical role in the form of WOM about the brands, services and products. According to
the study, customer brand engagement may be influenced on the social networks via total
posts, total fans, status posts, link posts, picture posts, and video posts. The research study
reveals that the CE’s key determinant is the frequency and content-related brand posting
activities, and not the number of fans following on the Facebook.

Roberts and Alpert (2010) discuss that a business success is largely dependent on the
decision of the customers to purchase its products or use its services. It is a well-known fact
that businesses need to create ‘engaged customers’, rather than encouraging on-off purchases,
which can significantly influence their performance in terms of growth and revenue.
 19

According to the study, the usual ways of operation of the businesses do not help in creating
or achieving high levels of CE. For promotion of CE, a business may focus on service
delivery, internal marketing with the business, and branding to consumers. The research
study proposes a total engagement model, which combines all factors into an effective and
efficient system. It identifies five degrees or levels of CE, which consist of customer
purchases; customer loyalty towards the service/product; customer readiness in buying;
customer recommends the product/service; and finally customer promotes and advocates the
product/service (level 1 to 5). The study proposes to include key strategic elements in the
total CE model, which include customer experience, internal culture, brand, and customer
value proposition. These factors/elements, for an organisation, are critical to create engaged
customers. The study further reveals the steps involved in the total engagement model’s
implementation. These steps comprise considering customer economics, governance, design,
engage, measure, embed, and performance management.

2.4. Mobile advertising and the Role of Smartphones

Kim and Han (2014) describe that there is a significant increase in the global mobile
advertising revenue, and in the year 2016, it is expected to rise to $24.6 billion. According to
the study, the smartphone use has radically increased over the years. In the context of South
Korea, in the first quarter of 2013, the 73% of the population owns smartphone, while in the
United States, 35% of adults own a smartphone. The high degree of smartphone use has
expanded the mobile advertising market drastically and has influenced companies and
advertisers to focus on effective mobile phone/smartphone advertising. The research study, in
the context of mobile phone advertisement, provides a comprehensive advertising model by
linking flow theory, personalization, and a web advertising model to understand the
antecedents of influence processes and purchase intention. According to the research
findings, the purchase intention of the consumers is enhanced by flow experience and the
advertising value i.e. in the context of smartphone advertisement, advertising flow and value
are the key purchase intention’s determinants, where advertising value is positively
associated with incentives, entertainment and credibility. The study provides an
advertisement characteristics’ comparison between the traditional and the mobile mode of
advertisement, which is illustrated in the following table:
 20

Advertisement Mobile Traditional

Print, Television,
Medium Mobile Device Radio, Outdoor
Advertising
Customer adhesion Very High No
Direction Bi-direction One Direction
Amount of Message Limited Limited
Timeliness Very High Low
Connection online and
Yes No
offline
Mobility Yes No

Table – 1: Comparison between the traditional and the mobile advertisement. Source: Kim and Han (2014)

For digital marketers and advertisers, mobile media are considered as compelling
channels due to their potential to support mass communication, one-to-many, and one-to-one
communication both effectively and economically. Moreover, the mobile and smartphone
marketing reach is large and growing. Watson, McCarthy and Rowley (2014), in the current
smartphone era, examine customer attitude towards mobile marketing. The study, using
online questionnaire, confirms the negative attitude of consumers in the pre-smart phone era
towards mobile marketing communications. Despite increased functionality of mobile phones
and the frequency of use, the attitudes of the consumers persist, in the smart phone era. The
consumers prefer exercising control over their interaction as they perceive the mode for
personal communication. The findings of the study suggests the acceptance of the consumers
regarding mobile advertising can be increased by creating sense of being in control, trust-
building, permission marketing and entertaining and useful website content. The study also
discusses that, for mobile marketing communications, the pull technologies hold particular
promise. It explores the use and attitude towards QR code, which an important pull
technology. However, the uptake is low despite of the potential of two-dimensional bar codes
and QR codes.

Based on the paradigm of Computer Are Social Actors, Kim (2014) examines the
effects of specialization in mobile advertising, and evaluates whether a smartphone
(specialized hardware agent) and an application has psychological effects on the users of
smartphone, exposed to mobile ads. The results from an experiment over 80 participant
suggest that greater trust in advertisement is induced by the specialist smartphones and
 21

applications, along with an enhanced purchased intention as compared to generalist

smartphones and applications. Moreover, the trust in advertisements mediates the effects of
specialization.

For customers and marketers, the use of personalized advertising has provided
considerable benefits to develop long-term relationships. Nyheim, Xu, Zhang, and Mattila
(2015), in a restaurant context, examine the effect of personalization, irritation and privacy
concern on the perceptions of Millennials. Over the past few years, a huge surge in mobile
activity is witnessed by the hospitality industry, where the channel of communication is
initiated by mobility allowing a more personalized way to interact and connect with the
guests. The study collects data using an online self-administered survey, from 159
Millennials (university students). The research participants, before complete the survey, were
asked to use the smartphone application of the restaurant for 30 days. Using the techniques of
factor analysis, reliability testing, descriptive statistics, and regression analysis, the study
examines the associations among the four variables/constructs: advertising avoidance,
personalization, irritation, and privacy concern. According to the result of the study, there is a
positive impact of advertising irritation over advertising avoidance, whereas, perceived
personalization is less related, and privacy concern is having no relationship with advertising
avoidance.

The numbers of smartphone users around the world are increasing significantly. The
trend is increasing not only in the developed states but also in the emerging and developing
nations as well. The increasing smartphone trend has also influenced the use of internet and
online apps, videos, music and games. Kim and Park (2013) discuss the consequences and
antecedents of smartphone advertising. According to the study, the market of mobile phone
advertising is rapidly expanding due the increased numbers of smartphone users. It is
therefore important for the marketers to enhance the effectiveness of mobile/smartphone
advertising. The study reveals there are numerous ways to evaluate the effectiveness of
smartphone advertising, where customer engagement is regarded as a multi-dimensional and
one of the most significant evaluation tool or method. The research study identifies
personalisation and informativeness as the antecedents of engagement, whereas electronic
word of mouth (e-WOM) and trust are taken as the engagement’s consequences. Based on a
research survey, the study finds the influence of personalisation and informativeness is
statistically significant and positive on customer engagement. In addition, engagement is
positively affecting the consequences: e-WOM and trust.
 22

2.5. The Influence of Social Media in Mobile Advertising and Establishing Customer
Engagement

Social media advertising can also be regarded as a source of mobile or web

advertising, which has transformed the contemporary marketing and advertising approach. It
is establishing connections between consumers and marketers by creating new opportunities
and possibilities to enhance brand awareness and engagement among the consumers.
Dehghani and Tumar (2015) examine the Facebook advertisement’s effectiveness, in
enhancing the purchase intention of the consumers. The research study, using a multiple item
questionnaire, and employing non-parametric Friedman test, and t-test finds that Facebook
advertising is influencing the brand equity and brand image significantly, which subsequently
contributes in affecting purchase intention of the consumers.

According to Cabiddu, Carlo, and Piccoli (2014), despite the social media’s
acknowledged importance for customer engagement, the understanding regarding this
phenomenon is limited. The study adopts an affordance perspective in the context of
customer engagement in tourism, and identifies three distinctive social media affordances:
triggered engagement, customized engagement, and persistent engagement. It also examines
the process of recognition, through which customers are engaged in social media by the
organizations, which consists of co-perception, exteroception, and proprioception).

Verma (2014) explains that, in triggering an active customer engagement, blogs and
social networking websites plays a significant role, with advertisers and other community
members. The social media emergence has reduced the boundaries and physical space
between the customers with common interest, who were geographically dispersed. Blogs
have been used effectively for customer engagement and corporate branding by companies
like Facebook, Amazon, Marriot, Delta Airlines, Whole Foods, Zappos, and by different
others around the world. The research study develops a framework for the effective use of
blogs, which can be used by the marketers to communicate with customers. The research
study, using content analysis and netnography, examines the social media presence and
blogging practices of Indian companies and evaluates the blogs’ use as online engagement
tool. According to the data analysis, the overall customer engagement is produced by the
subject and the object’s interaction with underlying dimensions such as behaviour, emotions
and cognition. The outcome of customer engagement (online and offline) is manifested by the
interplay between various dimensions.
 23

Over the last decade, a dramatic change is observed in the way of communication of
the consumers, and in the mode of acquiring and exchanging information about the products
they consume. According to Hennig-Thurau et al. (2010), the ‘new media’ can be defined as
the website and other information channels and digital communications, where active
consumers engage. The new media is characterized as digital, pro-active, real-time &
memory, visible, ubiquitous, and have networks. There are various new media channels,
including Twitter, Google, YouTube, and Facebook, which allows the customers to extend
their reach and play a more active part as market players. The new media or channel of
communication threatens the long established corporate strategies and business models, and
at the same time provides new adaptive strategies for growth. The research study proposes a
‘pinball’ framework, describing the impact of new media on customer relationships and
explains the key new media phenomena, which should be taken into account by the
companies. The challenges for managers and researchers, for each phenomenon, relate to the
successful management of customer interactions by using the new media; understanding
consumer behaviour, and customers’ outcomes and activities effective measurement.

The power of internet in today’s world is recognized by the firms, which is an

omnipresent, cost-effective, and open network, and contributes to eliminating or reducing the
physical distance and geographical barriers, to co-create value with customers. The
capabilities of internet comprise of flexibility, speed, persistence, broad scope and
interactivity. Oviedo-García and Muñoz-Expósito (2014), in the context of customer
engagement in Facebook, propose a comprehensive metric using a conceptual approach. The
research study proposes a ratio of interest and effective interest and a ratio to measure
engagement on Facebook, in relation to the Facebook posts. The study finds that in the new
dynamic business environment, which is fostered by the internet, the firms by using the
metric results and its evolution can fine-tune their strategy of customer engagement. The
measurement or assessment of customer engagement in Facebook would enable marketers to
evaluate the type of content generating better engagement.

In any business strategy, online or digital branding is a growing spectrum. Online

branding (in businesses) demands active participation in email, social networking, blogs,
websites and other online platforms. It also requires understanding strategies to start multi-
platform marketing and customer interaction to deliver the message of the brand. Vadivu and
Neelamalar (2015), in the context, discuss that in digital technologies, the continuous growth
has resulted in the enhancement, growth and development of digital brand management,
 24

which is now significantly important for the success of the brand. It is a fact that the social
networking cites are critical to the success of online branding due to significantly large
number of user base (exceeding two billion). The platform of social media can be used to
create more humanizing effect, which may create personal connection with audience of the
brand. According to the study, social network marketing is an important tool to enhance
brand recognition, loyalty, and richer experience to the customers. The study using an online
data collection methodology, and measuring online engagement of the customers, finds that,
rather than the quantity of post on a social network (Facebook), the quality of post and level
of interactivity grabs the social audience attention and increase engagement.

According to Takran and Ylmaz (2015), the rapid growth in the mobile applications
and smart phone use has developed new ways to market products and services to the
customers. The mobile applications market is driven by the growing smartphone use. In
addition social media is also playing a dominating role in collaboration with smartphone and
other new media, is revolutionizing the marketing and advertising practices. Social media is
also playing a prominent role in international advertising. It is has the capability to engage
customers via increased interactions and relationships.

2.6. The Impact of Mobile Advertising on Consumers

The mobile phones’ high penetration rate globally has enhanced the use of handheld
devices for the delivery of products and services advertisement. Along with mobile
advertising, as a medium for advertisement and communication, a substantial amount of
research is motivated by the emergence of internet. In this perspective, Tsang, Ho, Liang
(2004) discusses the channel of marketing created by the rapid proliferation of mobile
phones, and the popularity of SMS service to access customer, which is regarded as a
medium of one-to-one marketing. The research study examines the attitudes of the consumers
toward mobile advertising. It also investigates the association between the consumer attitude
and behaviour in this respect. For measuring the variables of mobile advertising and
consumer attitudes towards the advertising, the research study conducts a survey and uses an
instrument. According to the results, without specific consent of the consumers, the attitude is
generally negative towards mobile advertising. It is also found that the relationship between
consumer behaviour and consumer attitude is positive. Therefore, without prior permission,
the use of SMS advertisement to attract potential customers is not a good idea.
 25

Izquierdo-Yusta, Olarte-Pascual and Reinares-Lara (2015) examine the consumers’

attitude towards mobile advertising, and explain that the emergence of mobile
communications have enabled personalized advertising information to be delivered by the
advertisers at the right place and time to the consumers. The mobile phone marketing
communication strategy or the mobile ad strategy is considered as a promising approach to
companies. By considering the association between mobile advertising and consumer
attitude, the study aims to identify the factors creating new opportunities for commercial
communications. It proposes a causal model of intentions and attitudes toward mobile
advertising and compares the users and non-users of smartphones with internet capabilities.
The model integrates the effects of ease of use, perceived added value, reference groups, and
control on attitudes toward mobile advertising. Using the sample of 612
participants/respondents, the study finds that the attitude towards mobile advertising is
positively related to intention to receive advertising.

According to Cho, Luong and Vo (2016), among different electronic commerce types,
mobile advertising is considered as one the most popular tools. The study, while focusing of
Vietnamese consumers, examines their attitude toward mobile advertising, and the
subsequent impact on buying decision of the consumers. The research study uses a
questionnaire survey to collect data from 293 respondents and performs various tests to
analyse the results, which include regression, factor analysis, reliability, one-way analysis of
variance, and t-test. According to the research findings, related to the attributes of
advertising, the four factors include credibility, irritation, informative-ness, and entertainment
are significantly affecting the consumer attitude towards mobile advertising. Among the four
factors, the study finds informativeness as the most significant factor. It also finds a positive
association between the buying decisions and the attitudes of Vietnamese consumers towards
mobile advertising.

Gao and Zang (2016) define mobile advertising as a form of advertisement that is
communicated using mobile devices that are smartphones, personal digital assistants, and
cellular phones. Globally, the concept of mobile advertisement has become popular, due to
the rapid development in the field of mobile technology. It is observed that almost every user
of mobile device, from various sources and service providers, receives mobile advertisement.
However, the attitude of most of the consumers towards mobile advertising is negative. In
this perspective, the research study examines the factors affecting the adoption of mobile
advertising by the consumers. The study proposes a model, based on the review of pervious
 26

literature, which is empirically evaluated with the help of a survey focusing on Chinese
consumers, having exposure of mobile advertising. According to the research findings, to
receive mobile advertisements, 80 % of consumers’ intention is explained attitude of the
consumers towards mobile advertising. The study also finds a significant influence of
credibility, irritation, personalization, and entertainment on the consumer’s attitude, where
the effect of entertainment is most significant.

Okoe and Boateng (2015) examine the drivers of attitudes of consumers towards
mobile advertisement. They also investigate the association between the attitudes of
consumers towards mobile ads and the willingness to accept those ads. According to the
proposed model, the factors affecting consumes’ attitude consist of entertainment, credibility,
personalization, and irritation. To assess the measurement model, the study uses confirmatory
factor analysis, whereas, to assess the model’s goodness-fit, it uses structural equation. The
research findings indicate that the variables: personalization, credibility, and entertainment
are having positive impact on the attitudes of consumers toward mobile advertising. It also
shows that the willingness of the consumers to accept mobile advertising is determined by the
consumers’ attitude toward mobile advertising.

Vadlamani (2011), in a research study to evaluate the impact of mobile advertisement,

finds that the rich media arrival, including the mobile medium, has allowed two-way
conversations for the brands and stimulate customer engagement in a way, which was not
possible through traditional media. Badlyanl (2013) evaluates the relationship between
mobile advertisement and customer attraction, and discusses that for direct communication
with the consumers, mobile advertising is an attractive media. The study finds the factors
influencing mobile advertising acceptance, which include consumer’s ability, message
content, message customization, message credibility and consumer inertia.

Altuna and Konuk (2009), in the context of Turkish and US Consumers, measures and
reveals the consumers’ attitudes toward mobile advertising applications. The study examines
the correlation between the behavioural intentions of the consumers and their attitudes toward
mobile advertising, which is found as positive. Using t-test, the study evaluates significant
difference in the attitude of US and Turkish consumers, where the attitudes of the
respondents from US are more positive as compared to the respondents from Turkey.

In the context of mobile customer engagement, Austin (2012) discusses that it is

important to follow certain rules by the mobile marketers, as according to the guidelines set
 27

by the industry, to avoid long-term problems for the industry and the brand. It is argued that
lack of customer consent towards mobile ads may cause ‘irritation’ and negatively influence
engagement with a brand. There are certain rules for the marketers, which should be followed
or complied by the marketer for the success of their brand. According to the study, for good
mobile campaigns, it is important to provide an adequate notice to the prospective customers
that would allow him/her to make an informed decision about the content. The notice may
include the identity of the franchisor, the services and products offered, and the main terms
for future mobile interactions.

According to Austin (2012), it is also important the respect the consent of the user i.e.
the adequate notice to the customers is respecting the mobile users’ opt-in/opt-out choices. In
mobile marketing and advertising, it is also significant to maintain appropriate security, and
customize communications where possible. The mobile content is considered as effective,
which is customized or tailored according to the needs of the customers. It is also observed
that customization keep the presentation of the message ‘fresh’ and catches more attention.
The study discusses that marketing and advertising via smartphone and smart devices will
grow continuously, as the customers now expect instant communication and instant access to
information. Similarly, the marketers and the businesses will continue to target customer via
smartphone/mobile ads to deliver useful content and engage more customers.

A significant change in the habits of consumers is observed with the rapid high-tech
devices’ development. The proliferation of smartphones, tablets and other devices have
become the top media and marketing channel. According to Le and Nguyen (2014), in the
consumer behaviour, mobile devices play a significant role. At the time of making purchase
decision, the mobile advertisement (MA) impacts half of the users of mobile web. It is widely
agreed that MA is the ‘future’ of advertising, and that is why, marketers are now more
inclined towards the mobile/smartphone advertising. The research study explores the mobile
users’ attitude towards MA, and factors affecting the attitudes of the consumers. According to
the study, previous research papers have identified a number of factors affecting the attitude
of consumers towards MA, which include personalisation, credibility, irritation,
entertainment, informativeness, enjoyment, demographic segments, indignity, gender, mass
media, peer communication, parental communication, and materialism. The study selects
credibility, irritation, entertainment, and informativeness, as the key factors/components of
MA, which can influence the attitude of the consumers towards MA. Using the sample of 206
valid respondents, and applying techniques of factor analysis and multiple regression
 28

analysis, the research study finds a significant and positive influence of message credibility
and entertainment on consumers’ attitude toward MA, while the factors of irritation and
informativeness are unable to predict the consumers’ attitude significantly.

Asimakopoulos, Spillers, Boretos, and Liu (2013) compare the attitudes of users
towards MA. The study, in the contexts of different cultures (China, Greece and USA), also
examines the factors affecting purchase decisions of the customers. The study collects data
from the smartphone users, with the help of a questionnaire, using convenience sampling
strategy. Using data of total 282 respondents (94 Chinese, 74 Greeks, and 114 Americans),
the study finds that as compared to the other users, the Chinese respondents have higher
expectations for usefulness, relevance, and information value of MA. Moreover, in MA
messages, the Chinese users enjoy more indirect and implicative expressions, while the other
two nationalities prefer more textual information.

The environment of marketing communications has changed enormously. Marketing

via mobile and smartphone has become increasing popular among other marketing
opportunities made available by new media. Kim and Adler (2011) examine the impact of
mobile application use on brand loyalty in the hospitality industry. The study specifically
focuses on the hotel mobile application used by the students. According to the study, in the
hospitality industry, the hotel mobile applications as hotel apps are growing continuously,
which provides the marketers and the hotel companies a direct access to the consumers. The
hotel mobile apps are considered as an important tool that increases the engagement of the
consumer with the brand. The study proposes a model, according to which the use mobile
hotel apps increase brand commitment, brand awareness and customer engagement, which
ultimately influence the brand loyalty positively. The research study uses a quantitative
approach, and collects data from 100 university students who are all smart phone users. The
study finds a positive impact of use of mobile hotel apps on brand loyalty due to increase in
brand commitment, customer engagement, and brand awareness.
 29

Chapter 3: Methodology

3.1. Theoretical Discussion

The concept of Mobile advertising, in the current business scenario, is among the
most widely adopted formats of advertising. The expenditure related to mobile advertising is
estimated to exceed $62.8 billion in 2017. The huge amount of economic activity and an
increasing trend in the adoption of mobile advertising have led theorists and researchers to
further explore the phenomenon, and to examine the theoretical relationship. As indicated in
the literature review, the concept of mobile advertising is discussed widely in the previous
and extant literature (Bart, Stephen, & Sarvary, 2014; Johnston, Komulainen, Ristola &
Ulkuniemi, 2012; Wong, Tan, Tan & Ooi, 2015; Lin, Paragas, Goh, & Bautista, 2016).
However, the relationship between mobile adverting and customer engagement (CE) is not
widely explored, until recently, as the concept of CE in the customer management domain is
a relatively new perspective (Brodie, Hollebeek, Juric, and Ilic, 2011).

Dinner, Van Heerde and Neslin (2015), to explain the creation of CE via Mobile apps,
evaluate data of 1286 customers quantitatively, with the help of descriptive statistics, multiple
regression models, and correlation matrix. Dovalienė, Piligrimienė, and Masiulytė (2016), in
the context of mobile applications, examine the factors influencing customer engagement.
The empirical study adopts a quantitative approach and performs a research survey using an
online multiple item questionnaire to collect primary data. The study evaluates the responses
of 196 participants using descriptive statistics, correlational analysis, and multiple regression
analysis.

Grewal, Bart, Spann and Zubcsek (2015), in the context of Mobile advertising (MA),
develop and organize a research agenda and a framework. The framework comprises of a
number of components, which includes market factors, firm factors, context, consumers,
advertisement elements, advertisement goals, and the outcome matrix. The study follows a
review-based approach to analyse the research problem. To evaluate the attitudes of
consumers towards MA, Tsang, Ho and Liang (2004) propose a model, comprising affecting
the attitude, intention and behaviour of the consumers. The study adopts a quantitative
approach to examine the relationships, and uses a questionnaire for the data collection
process. The methodology of the study involves various statistical techniques, which include
descriptive statistics, correlation analysis, stepwise regression and the structural equation
modeling.
 30

Izquierdo-Yusta, Olarte-Pascual and Reinares-Lara (2015) propose hypotheses to

evaluate the behaviour or intention of consumers towards MA. The study uses a 5 point
Likert scale questionnaire for data collection and adopts partial least squares regression to
validate the structural model. It applies statistical tools to examine reliability, convergent
validity, and Discriminant validity. Cho, Luong and Vo (2016) also develops a conceptual
model with hypotheses to examine the consumer attitudes towards MA, and the buying
decision. The study performs a questionnaire (5-Point Likert Scale) survey to collect data
directly from 296 respondents and adopts descriptive statistics, reliability test, factor analysis,
Pearson correlation, multiple regression analysis, t-test and ANOVA to evaluate the research
hypotheses.

Similarly, to examine the consumers’ adoption of mobile advertising, Gao and Zang
(2016) formulate a model of attitudes of the consumers toward web advertising, which
comprises credibility, irritation, informativeness, and entertainment creating advertising value
and an attitude towards MA. The study provides descriptive results and a measurement model
consisting of various fit indices. It also conducts reliability analysis, factor analysis, and
structural modelling analysis to test the hypotheses. Okoe and Boateng (2015) also apply
several quantitative tools: reliability, validity, and descriptive statistics of the questionnaire
items; correlation analysis; and structural model analysis of the variables, to evaluate the
relationship between MA and CE. Vadlamani (2011), Badlyanl (2013) and Altuna and Konuk
(2009) also analyse the association between mobile advertising and customer
engagement/attraction/intention/attitude, using statistical models and tools.

Based on the theoretical evidence, the following sections entail the practical
elaboration of the methodology used in the research study.

3.2. Research Approach

The selection of a research approach is one of the primary needs of a research study.
It can be either qualitative, quantitative or mixed approach. According to Creswell (2013), a
quantitative approach deals with statistical methods and tools, and entails observation,
measurement and data analysis. In this form of research approach, a research study
formulates claims or hypotheses, which may require evaluation of causal relationship
between the variables. In a quantitative research approach, variables are categorized and
calculated to examine the research problem (Burn & Burn, 2008).
 31

In contrast, a qualitative research approach does not involve any mathematical or

statistical analysis. The approach, using more flexible research instruments, seeks to explore
a phenomenon, and aims to gain deep understanding of the opinions and ideas (Mack,
Woodsong, MacQueen, Guest & Namey, 2005). The approach basically follows a narrative
form of evaluation or analysis. It differs with the quantitative approach with respect to the
degree of flexibility; the types of questions used; the data collection and evaluation process
and instruments; and the analytical objectives.

As discussed earlier, the research study aims to explore the relationship between
mobile advertising (MA) and customer engagement (CE), while focusing on the smartphone
ad channel. Therefore, to examine the aim and the objectives, the research dissertation adopts
a ‘quantitative approach’. It uses statistical tools and methods to measure and examine the
principal components of the smartphone advertising, and measure its impact on customer
engagement. The details of the various statistical tools and methods are provided in the later
part of the chapter.

3.3. Research Purpose

The research purpose is another significant part of the methodology of a study. It

explains the reason or rationale of conducting the research study, and also indicates the nature
and stage of research exploration. A research purpose can take three forms – exploration,
description or explanation (Yin, 2013). The research purpose varies across various themes,
disciplines, and subjects, and also depends on the nature of problem examined. An
exploratory research purpose, as its name suggests, examines or explores a new research
problem or a new theme within an existing problem, where the variables and their
relationships are not yet established. It focuses on the discovery of insights and ideas, and
sets the groundwork. A descriptive research can be regarded as extension to the exploratory
research, where the given variables are already defined. It is generally structured and pre-
planned in design. In the case of explanatory research purpose, the variables and the
associated relationships are already defined. It establishes a causal relationship (Saunders,
2011). The explanatory purpose aims to further explain a research phenomenon or a subject.

In this dissertation, the purpose of the researcher is ‘explanation’ i.e. the case of
mobile advertising and customer engagement is further explained. As observed in the chapter
of literature review, the relationship between MA and CE is already established therefore, the
 32

current study further explains the relationship, with a focus on the smartphone advertising,
within the range of mobile web advertising, mobile video and application advertising units.

3.4. Research Design

A research design defines or sets the overall strategy of conducting the study, which
may comprise of the defining the data collection and evaluation processes (Bryman & Bell,
2015). It explains the framework or the structure of a research study. A research design
defines methods to integrate and analyze different components in a logical and coherent way,
to address the problem effectively.

A research study may adopt different design, depending on nature of the research
problem and the defined objectives. It can be classified into experimental, descriptive,
correlational, review-based, meta-analytic, and semi-experimental designs. In this case, the
study adopts two research designs: a ‘descriptive’ and a ‘correctional’ research design. The
descriptive design, in the dissertation, is used in the form of a questionnaire survey,
consisting of multiple items, to collect data and measure the variables. The correlational
design, which observes and defines the association between the variables, is applied to
examine the impact of the components of the smartphone (mobile) advertising on CE, i.e.
how significantly the viewers of internet-based mobile ads using their smartphones get
engaged with the advertised product/brand.

3.5. Data Source

The data source of a study indicates the database, individuals, groups and other
sources from where data is collected for a study. A data source can be either primary or
secondary. A primary data source provides the first-hand evidences. In other words, in this
case, data is collected directly from the respondents (from primary sources). In contrast,
secondary data is not collected directly from the research participants and the researcher uses
books, articles, reports and the databases for the process.

Here, the research study uses ‘primary’ sources in the data collection process, i.e. it
involves collection of data for the components and items of smartphone advertising and
customer engagement directly from the respondents using a multiple item questionnaire. It
also uses ‘secondary’ data sources to elaborate the smartphone use.
 33

3.6. Research Population

The population of a study, for a primary research, consists of the individuals or groups
having similar traits or characteristics. The factors of age, gender, business industry or a
nationality may form the basis of the research population for a study. It also defined as a large
collection of objects or individuals, used for a scientific query (Weiss & Weiss, 2012).

As the research aims to explore the association between Smartphone advertising and
customer engagement according to the perception of the smartphone users, therefore the
target population of the study are the GEM university students, who are the potential
customers of the online advertised products/brands. The university students are chosen as the
respondents or participants of the study due to their high perceived online usage via
smartphone (Alfawareh & Jusoh, 2014: Hanley & Boostrom, 2011). The use of smartphone
have also influenced the online shopping habits of the students significantly (Uesugi , 2013;
Hanley, 2013). Therefore, the current study focuses on the students as the potential viewers
of internet-based mobile ads, using their smartphones, and getting engaged with the
advertised product/brand.

3.7. Sampling Strategy

The size of a research population makes is difficult or even impossible for a

researcher to collect and analyse the data related to the problem under study, which increases
the need of deciding a sampling strategy. In a research study, sampling is an important
component as it represents the entire population. A sample should be representative to show
an accurate reflection of the population under study, and to ensure appropriateness and
reliability (Levy & Lemeshow, 2013).

A sampling strategy can be classified into probability and non-probability techniques.

The data collection process of the dissertation adopts a form of non-probability sampling
technique that is ‘Convenience sampling’. According to Price (2013), convenience sampling
selects respondents on the basis of their proximity and accessibility. Here, data of the
university students, related to the items of MA and CE, is collected considering the factors of
convenience and accessibility.
 34

3.8. Sample Size

As discussed in the previous section, the study adopts a convenience sampling

strategy to collect data from the respondents. The questionnaires were originally distributed
to a total of 150 students who are active smartphone users, and 142 questionnaires with
complete responses were received. Therefore, the sample size or the numbers of respondents
of the research study are 142.

3.9. Research Instrument

A research instrument is a tool for data collection in a Primary study. The data
collection process of the study is performed using a five point Likert Scale (1-5)
questionnaire, which consists of multiple items for each component of smartphone
advertising and customer engagement. The questionnaire is designed based on the items and
variables identified in the previous research studies on the subject. It also contains questions
related to the demographics of the respondents.

The Likert Scale, in this case, enabled the researcher to measure the level of
agreement or disagreement regarding the items in the questionnaires, on a quantitative scale
of 1-5 (from strongly disagree to strongly agree).

3.10. Statistical Methods

The study adopts a quantitative research approach, which requires statistical methods
and tools to evaluate the research questions. The research study adopts different statistical
tools and methods, which are similar to those identified in the theoretical discussion.

The study uses descriptive statistics to analyze the demographics of the respondents.
It employs frequency distribution and percentage analysis to summarize and present the
findings. It also uses graphical analysis and charts to better understand the demographics of
the population (respondents) under study.

The study applies reliability test on the items of the research questionnaire to measure
the stability and consistency of the assessment tool or the research instrument. It performs
factor analysis to reduce the number of items, and to combine a group of correlated
items/variables of MA and CE.
 35

The variables or factors produced in the previous test are used in the correlation
analysis to evaluate the relationship between the variables; and in multiple regression
analysis, to examine the impact of the components of smartphone advertising (SA) on CE.
That is, regression analysis is used to investigate the relationship between the independent
variables (components of SA) and the dependent variable (CE).

The study applies descriptive statistics and correlation analysis on the secondary data
collected to elaborate the smartphone and internet use.

3.11. Variable Description

One of the objectives of the research study includes identifying the components or
determinants of smartphone advertising. From the previous and existing literature, a number
of factors/determinants are identified, which are listed in the following table:

Mobile/Smartphone advertising
Research Studies
determinants
Badlyanl (2013); Altuna and Konuk (2009);
Cho, Luong and Vo (2016); Gao and Zang
Message/ Ad Credibility
(2016); Kim and Han (2014); Okoe and
Boateng (2015); Tsang and Liang (2004);
Badlyanl (2013); Gao and Zang (2016); Kim
Message Customization/Personalization and Han (2014); Nyheim, Xu, Zhang, and
Mattila (2015); Okoe and Boateng (2015)
Badlyanl (2013); Altuna and Konuk (2009);
Ad Content
Grewal, Bart, Spann and Zubcsek (2015);
Badlyanl (2013); Grewal, Bart, Spann and
Consumer Ability
Zubcsek (2015)
Altuna and Konuk (2009); Cho, Luong and
Vo (2016); Gao and Zang (2016); Kim and
Irritation Han (2014); Nyheim, Xu, Zhang, and
Mattila (2015); Okoe and Boateng (2015);
Tsang and Liang (2004)
Dovaliene, Piligrimiene and Masiulyte
Customer sociability
(2016); Wong, Tan, Tan and Ooi (2015)
Dovaliene, Piligrimiene and Masiulyte
Technical convenience
(2016)
Relevance/ Perceived Usefulness Vadlamani (2011)
Vadlamani (2011); Grewal, Bart, Spann and
Interactivity
Zubcsek (2015)
Vadlamani (2011); Nyheim, Xu, Zhang, and
Permission and Privacy
Mattila (2015); Tsang and Liang (2004)
Personal innovativeness Wong, Tan, Tan and Ooi (2015)
Performance expectancy Wong, Tan, Tan and Ooi (2015)
 36

Mobile skilfulness Wong, Tan, Tan and Ooi (2015)

Altuna and Konuk (2009); Cho, Luong and
Informativeness Vo (2016); Kim and Han (2014); Tsang and
Liang (2004);
Altuna and Konuk (2009); Cho, Luong and
Vo (2016); Gao and Zang (2016); Kim and
Enjoyment/Entertainment
Han (2014); Okoe and Boateng (2015);
Tsang and Liang (2004)
Incentives Gao and Zang (2016); Kim and Han (2014)
Izquierdo-Yusta, Olarte-Pascual and
Perceived ease of use
Reinares-Lara (2015)
Izquierdo-Yusta, Olarte-Pascual and
Reference Group
Reinares-Lara (2015)
Izquierdo-Yusta, Olarte-Pascual and
Perceived Ad Value
Reinares-Lara (2015); Kim and Han (2014)
Perceived Control Nyheim, Xu, Zhang, and Mattila (2015)

Table – 3.1 Determinants of Mobile/Smartphone Advertising

From the above table, four variables are selected, which are most widely discussed
and evaluated as determinants of mobile advertising, in the context of customer engagement.
These factors are Ad Credibility, Perceived Entertainment, Informativeness, and Irritation.

Advertisement credibility, in general, is the believability and truthfulness of

advertising according to the perception of the consumer. It creates value in web advertising,
and positively influences the adoption of mobile advertising (Gao & Zang, 2016). It is also
believed that for effective advertisement, credibility is an essential factor (Kim & Han, 2014).

The element of Enjoyment or Entertainment positively influences the mood of the

customer during interaction with computer-based media. It plays one of greatest role in the
overall customer attitude towards advertisement. Moreover, entertainment associated with ad
content enhances value in mobile/smartphone advertising (Kim & Han, 2014). Previous
research have found that entertaining, informative and funny advertisements increases
purchasing intention of the consumers (Gao & Zang, 2016).

The factor of informativeness in MA is the capability of transmitting timely, updated,

and easily approachable information. The ability in ‘inform’ consumers yields greater
satisfaction. The factor not only proved useful offers, but also help communicating practical
and valuable information (Cho, Luong & Vo, 2016). It positively influence ad value, and
enhance concentration of the customers towards messages and product information (Kim &
Han, 2014).
 37

The factor of irritation is also crucial in the context of customer engagement, as

irritating ads causes displeasure and monetary impatience. An enormous amount of
interactivity and information of an advertisement may result in distraction in the
concentration of the audience (Kim & Han, 2014). Previous studies have examines a negative
association between perceived irritation and consumer attitude towards MA (Okoe &
Boateng, 2015). According to Cho, Luong and Vo (2016), irritation from an advertisement
causes dissatisfaction and nuisance. Consumers perceive irritation due to disrespectful,
offensive, unattractive, and unscrupulous ad techniques.

The dependent variable of the research study is ‘Customer Engagement’, which is an

important concept in marketing, and which defines the relationship between a customer and a
brand. Customer engagement, along with the components of smartphone advertising, is
measured using a multiple item questionnaire, as discussed in the previous sections.

3.12. Model Hypotheses

Based on the research objective, following are the hypotheses of the study:

I. Perceived Ad Credibility positively influence Customer Engagement.

II. Perceived Entertainment positively influence Customer Engagement
III. Perceived Informativeness positively influence Customer Engagement
IV. Perceived Irritation from Smartphone Ads negatively affect Customer Engagement
 38

Figure – 3.1 Research Model

3.13. Ethical Consideration

The research study ensures privacy and confidentiality of data collected from the
respondents. It also considers social norms and right to information while conducting the
research study. Other ethical considerations include integrity, non-discrimination, objectivity,
honesty, and carefulness.

3.14. Methodology Summary

Research Approach Quantitative Approach

Research Purpose Explanatory Purpose
Research Design Descriptive and Correlational Design
Data Source Primary Source
Sample Size 142 Students
Research Instrument 5-Point Liker Scale Questionnaire
Statistical Methods Descriptive Statistics, Factor
 39

Analysis, and Regression Analysis

 40

Chapter 4: Data Analysis

4.1. Introduction

The previous section describes the methodology of the study and identifies the main
determinants of smartphone advertising, which consists of Ad Credibility, Entertainment,
Informativeness, and Irritation. The chapter presents statistics related to the use of
Smartphone worldwide. It also provides an overview of the research participants in the
context of smartphone use and interaction with the advertisement. Moreover, it summarizes
the determinants/components of smartphone advertising (SA) and examines their impact on
customer engagement (CE). Variables are summarised using the tool of factor analysis. The
relationship between the factors of SA and CE are examined using Pearson Correlation
Analysis and Multiple Regression Analysis.

4.2. Smartphone Use

Statistics
Smartphone Ownership %
Valid 40
N
Missing 0
Mean 42.72
Std. Deviation 22.23
Range 84
Minimum 4
Maximum 88

Table – 4.1 Smartphone Ownership. Data Source: Poushter (2016)

The table 4.1 shows the statistics of the smartphone ownership in 40 countries around
the world. According to the statistics, the mean value of the smartphone ownership
percentage (rate) in the 40 countries is equal to 42.72%. It means that worldwide, almost 43
out of 100 people own a smartphone. The standard deviation in smartphone ownership is
22.23% worldwide. South Korea has the highest rate of smartphone ownership, which is
equal to 88%, while Ethiopia and Uganda have the lowest smartphone ownership rate i.e. 4%
each. The following figure illustrates in the detail the smartphone ownership rate in the 40
countries.
 41

Smartphone Ownership Rate

Uganda 4
Tanzania 11
South Africa 37
Senegal 19
Nigeria 28
Kenya 26
Ghana 21
Ethiopia 4
Burkina Faso 14
Venezuela 45
Peru 25
Mexico 35
Chile 65
Brazil 41
Argentina 48
Vietnam 35
South Korea 88
Philippines 22
Pakistan 11
Malaysia 65
Japan 39
Indonesia 21
India 17
China 58
Australia 77
Israel 74
Palestinian territories 57
Lebanon 52
Jordan 51
Turkey 59
Ukraine 27
Russia 45
United Kingdom 68
Spain 71
Poland 41
Italy 60
Germany 60
France 49
Canada 67
United States 72
0 10 20 30 40 50 60 70 80 90 100

Figure – 4.1 Smartphone Ownership Rate. Data Source: Poushter (2016)

According to the above figure, the countries with highest ownership rate include
South Korea (88%), Australia (77), Israel (74%) and United States (72%). The countries with
the lowest rates consist of Ethiopia (4%), Uganda (4%), Tanzania (11%) and Pakistan (11%).
The above statistics may also suggest that the countries with higher smartphone ownership
rate have more internet use, which result in more exposure to smartphone advertising.
 42

Correlations
Smartphone
Internet Use
Ownership
Pearson Correlation 1 .948**
Smartphone Ownership Sig. (2-tailed) .000
N 40 40
Pearson Correlation .948** 1
Internet Use Sig. (2-tailed) .000
N 40 40
**. Correlation is significant at the 0.01 level (2-tailed).

Table – 4.2 Correlation between Smartphone Ownership and Internet use. Data Source: Poushter (2016)

The above table shows provides a correlation analysis between smartphone ownership
and internet use in the 40 selected countries. According to the table, there is a significant
association between the two variables, as the sig value is less than the 0.05 threshold. The
table also shows strong (large) positive association (0.948) between smartphone ownership
and internet use i.e. increasing ownership of smartphone influences the use of internet
worldwide, which may also increase the interaction with online mobile ads.

4.3. Descriptive Statistics

This section provides an overview of the research participants by indicating their

gender, the time spent online on a smartphone, and the interaction of the users with Mobile
Ad.

Gender
Valid Cumulative
Frequency Percent
Percent Percent
Male 83 58.5 58.5 58.5
Valid Female 59 41.5 41.5 100.0
Total 142 100.0 100.0

Table – 4.3 Gender Distributions

According to the above table, majority of the respondents in the study are male,
which are 58.5% of the total respondents. The numbers of the female participants are 59 that
are 41.5% of the total participants. The percentage distribution of the respondents’ gender is
also illustrated in the following chart:
 43

Gender Distribution

42%

58% Male
Female

Figure – 4.2 Gender Distributions

Time Spent Online

Valid Cumulative
Time Categories Frequency Percent
Percent Percent
Less than 1 Hour 36 25.4 25.4 25.4
1 to 3 Hours 74 52.1 52.1 77.5
Valid 3 to 6 Hours 26 18.3 18.3 95.8
More than 6 Hours 6 4.2 4.2 100.0
Total 142 100.0 100.0

Table – 4.4 Time spent online using Smartphone

The table 4.4 presents the respondents’ percentage average daily time spent online
using their smartphones. According to the table, majority of the participants (university
students), on average, have a daily online usage in between 1 to 3 hours, which are 52.1 % of
the research population. 25.4% of respondents have a daily online use of less than 1 hour
through their smartphone. Only 6 participants out of the total 142 spend more than 6 hours
online.

Interaction with Mobile Ad

Valid Cumulative
Frequency Percent
Percent Percent
Social Networking 29 20.4 20.4 20.4
Web Surfing 15 10.6 10.6 31.0
Watching Videos 22 15.5 15.5 46.5
Valid
Gaming 28 19.7 19.7 66.2
Using Smartphone Apps 44 31.0 31.0 97.2
Others 4 2.8 2.8 100.0
 44

Total 142 100.0 100.0

Table – 4.5 Interaction with Mobile Ad through different channels

The research study also examines that using which online channels the students
mostly interact with or view advertisement on their smartphones. According to the above
statistics, majority of the respondents (31%) consider smartphone apps as a channel which
mostly causes interaction with ads, followed by the participants who consider social
networking (20.4%) and gaming (19.7%), as the most widely used smartphone ad platforms.

Interaction with Mobile Ad %

35.0
31.0
30.0

25.0
20.4 19.7
20.0
15.5
15.0
10.6
10.0

5.0 2.8

0.0
Social Web Surfing Watching Gaming Using Others
Networking Videos Smartphone
Apps

Figure – 4.3 Interaction with Mobile Ad through different channels

The figure show that, among the six categories, majority of the university students
view online ad mostly using their smartphone applications, followed social networks,
gaming, videos, web surfing and other channels.

4.4. Reliability Test

The test of reliability is performed in a research study to evaluate the degree of

internal consistency or stability of the observations, research instrument, survey or a test. It
measures/examines the degree to which consistent results are generated by an assessment
tool. The current research thesis uses Cronbach’s alpha (α) to examine reliability, which
ranges from 0 to 1. The reliability of each construct (related to smartphone advertising and
customer engagement) are tested and presented in the following table.
 45

Reliability Statistics
Cronbach's N of
Variables/Constructs
Alpha Items
Irritation .989 4
Entertainment .983 4
Informativeness .982 4
Credibility .932 3
Customer Engagement .987 4

Table – 4.6 Reliability Test

According to the table, the Cronbach's Alpha values of each of the four constructs of
smartphone advertising (Irritation, Entertainment, Informativeness, and Credibility) and
Customer Engagement are greater than the minimum acceptable value of 0.7, which indicates
high degree of internal consistency. It shows that the constructs’ test items produce similar
results.

Item-Total Statistics
Scale Scale Cronbach's
Corrected
Mean if Variance Alpha if
Items Item-Total
Item if Item Item
Correlation
Deleted Deleted Deleted
I1 12.7183 4.374 .986 .981
I2 12.7394 4.364 .967 .986
I3 12.7465 4.347 .962 .987
I4 12.7535 4.471 .967 .986
E1 12.2746 5.038 .974 .974
E2 12.2676 4.963 .981 .972
E3 12.2958 4.976 .969 .975
E4 12.3239 5.043 .908 .992
IN1 11.8873 3.278 .976 .970
IN2 11.8732 3.246 .945 .978
IN3 11.9155 3.255 .970 .972
IN4 11.8803 3.383 .925 .984
C1 8.4366 2.120 .929 .847
C2 8.4789 2.095 .867 .895
C3 8.5211 2.266 .788 .957
CE1 9.8873 14.214 .987 .977
CE2 9.8521 14.396 .972 .981
CE3 9.8451 14.799 .956 .985
CE4 9.8169 14.647 .950 .987

Table – 4.7 Items –total statistics

 46

In the table 4.7, the values of Cronbach's Alpha are presented if the corresponding
items are deleted. The table also shows the scale mean and scale variances, if an item is
deleted from the construct, and the corrected item-total correlation. In this table I, E, IN, C,
and CE represent Irritation, Entertainment, Informativeness, Credibility, and Customer
Engagement respectively. According to the table, the Cronbach's Alpha increases for their
constructs after the deletion of E4 and C3. However, due to existing high degree of internal
consistency, the study does not delete the two items from Entertainment and Credibility.

4.5. Factor Analysis

Factor analysis is an important technique, which is used to summarize or reduce the

number of given/measured items or variables. The method reduces the number of items into
unobservable (latent) variables. That is, it explains the variability among the correlated and
observed variables in terms of factors (unobserved variables). The current study uses the
method of Principal component analysis (PCA) to reduce the 19 items. It is a technique which
reduces items into smaller components (Jolliffe, 2002). In this research study, it is assumed
that for running PCA, ordinal variables can be used, which is a widely used practice among
the researchers for factor analysis. Following table provides the details of the number of
items in each construct/variable.

Constructs Number of Items

Irritation 4 (I1 – I4)
Entertainment 4 (E1 – E4
Informativeness 4 (IN1 – IN2)
Credibility 3 (C1 – C3)
Customer Engagement 4 (CE1 – CE4)

Table – 4.8 Numbers of Items

Before running PCA, it is important to check appropriateness of factor analysis and

the sampling adequacy.

KMO and Bartlett's Test

KMO Measure of Sampling Adequacy .711
Approx. Chi-Square 5143.434
Bartlett's Test of Sphericity Df 171
Sig. 0.000

Table – 4.9 Appropriateness of factor analysis and Sampling Adequacy

 47

The table 4.8 measures the appropriateness of running factor analysis using the
Bartlett's Test. According to the table, the sig. value of Bartlett’s test is less than 0.05, which
rejects the null hypothesis that the correlation matrix is an identity matrix. It shows that
correlations in the data exist and it is appropriate to run PCA. The minimum acceptable value
of KMO is 0.5 (Chang, 2008), while in this case, the KMO value is equal to 0.711, which
shows that sample of the study is adequate enough to run the PCA.

Communalities
Items Initial Extraction Items Initial Extraction
I1 1.000 .985 E3 1.000 .968
I2 1.000 .965 E4 1.000 .897
I3 1.000 .958 IN1 1.000 .973
I4 1.000 .964 IN2 1.000 .940
CE1 1.000 .986 IN3 1.000 .968
CE2 1.000 .970 IN4 1.000 .918
CE3 1.000 .952 C1 1.000 .944
CE4 1.000 .946 C2 1.000 .892
E1 1.000 .973 C3 1.000 .816
E2 1.000 .980
Extraction Method: PCA

.Table – 4.10 Communalities

Communalities are computed /calculated for a variable by taking the sum of squared
loadings. It represents the amount of variance in each variable explained by the extracted
factors. According to the results of the table 4.10, the amount of variance explained is
relatively high in each of the original variables. The factors explain highest amount of
variance in CE1, I1 and E2, which equals 98.6%, 98.5% and 98% respectively. The lowest
variance, among the given variables, is explained C3, which is equal to 81.6%.

Total Variance Explained

Extraction Sums of Squared Rotation Sums of Squared
Initial Eigenvalues
Loadings Loadings
Component Percent Percent Percent
Cumulative Cumulative Cumulative
Total of Total of Total of
Percentage Percentage Percentage
Variance Variance Variance
1 5.819 30.628 30.628 5.819 30.628 30.628 3.866 20.348 20.348
2 3.918 20.621 51.249 3.918 20.621 51.249 3.853 20.278 40.626
3 3.190 16.789 68.038 3.190 16.789 68.038 3.822 20.117 60.743
4 2.755 14.500 82.539 2.755 14.500 82.539 3.805 20.029 80.772
5 2.314 12.178 94.716 2.314 12.178 94.716 2.649 13.944 94.716
 48

6 .301 1.583 96.300

7 .158 .832 97.132
8 .134 .703 97.835
9 .079 .417 98.252
10 .072 .378 98.629
11 .056 .295 98.924
12 .052 .275 99.200
13 .043 .226 99.425
14 .031 .164 99.589
15 .029 .155 99.744
16 .022 .114 99.859
17 .014 .073 99.932
18 .009 .048 99.980
19 .004 .020 100.000
Extraction Method: PCA

Table – 4.11: Total Variance Explained

The table 4.11 provides description of the variance explained by the 5 extracted
factors, using initial eigenvalues, extraction and rotation squared loadings’ sum. According to
the table, out of the total 19 factors/items, which include the items of the determinants of SA
and CE only 5 are retained. The cumulative variance explained by the 5 factors is equal to
94.72%. As per the rotated squared loadings’ sum, the distribution of variance, which is
maximized by Varimax, is 20.35%, 20.28%, 20.12%, 20.03% and 13.95% for the five
extracted factors.
 49

Figure – 4.4 Scree Plot

The Scree plot graph is plotted between the 19 components (items) and the
eigenvalues. According to the graph, after the 5th factor, the eigenvalues have dropped
significantly and showing a flat line. Each factor afterwards is explaining smaller amount of
variance.
Rotated Component Matrixa
Component
1 2 3 4 5
I1: The Contents in Smartphone Advertising (SA) are
.977 -.104 -.075 -.118 -.022
often Annoying
I2: SA disturb your use of mobile devices .967 -.088 -.077 -.117 -.042
I3: You feel SA as intrusive and interfering .964 -.116 -.078 -.098 -.012
I4: You often feel irritated by SA during your use .964 -.116 -.103 -.101 .018
CE1: You are willing to receive SA -.096 .975 .118 .064 .091
CE2: You are attracted toward brands via SA -.094 .967 .112 .074 .097
CE3: The use of smartphone have influenced your
-.118 .957 .105 .079 .072
engagement with different brands
CE4: Your loyalty and purchase readiness for
-.116 .960 .092 .012 .052
products/service have increased
 50

E1: You often enjoy SA -.070 .104 .978 .000 -.010

E2: You consider receiving SA as entertaining -.087 .109 .980 .003 -.009
E3: You value content with an element of fun and
-.071 .094 .977 .003 -.003
entertainment in it
E4: You feel that SA is exciting -.096 .107 .935 -.051 -.018
IN1: Reliable information should be an part of SA
-.095 .075 -.024 .979 .009
content
IN2: You feel that SA is source of timely information -.104 .043 -.013 .963 .009
IN3: SA provide relevant information about a
-.127 .072 -.021 .973 -.014
product/service
IN4: It is convenient source of information -.093 .031 .011 .953 .021
C1: You trust SA -.017 .128 .014 .029 .963
C2: You prefer convincing and credible content in SA -.010 .112 -.023 -.006 .937
C3: You believe that receiving and viewing SA has no
-.019 .025 -.026 -.002 .903
risks
Extraction Method: PCA
Rotation Method: Varimax
a. Rotation converged in 5 iterations.

Table – 4.12 Rotated Matrix

The table 4.12 include the rotated factor loadings, which presents the correlation
between the factor and the items, and how for each factor variables are weighted. Variables
with cross loadings are eliminated and variables with highest loading are placed in specific
factors. In this case, I1-I4 are placed in component 1; CE1-CE4 are placed in component 2;
E1-E4 are associated with the component 3; IN1-IN4 in component 4; and the C1-C3 are
placed in the component 5. The factor loadings are presented in the following table.

Component Factor Name Items

1 Irritation I1-I4
2 Customer Engagement CE1-CE4
3 Entertainment E1-E4
4 Informativeness IN1-IN4
5 Credibility C1-C3

Table – 4.13 Factors

The factor loadings are in accordance with the proposed items for each construct. The
19 items, measured via research questionnaire, are reduced to 5 variables, which are used to
run correlation analysis and multiple regression analysis.

4.6. Correlation Analysis

Correlation analysis is a technique which is used to evaluate relationships among the

variables. Linear association is measured between the variables with the help of the
correlation coefficient. In this research study, to examine the association between the factors
 51

of Smartphone advertising (SA) and Customer Engagement (CE), Pearson’s correlation

coefficient is used.

Correlations
Customer
Irritation Entertainment Informativeness Credibility
Engagement
Pearson
1 -.175* -.221** -.041 -.229**
Correlation
Irritation Sig. (2-tailed) .037 .008 .632 .006

N 142 142 142 142 142

Pearson
-.175* 1 -.009 -.012 .219**
Correlation
Entertainment
Sig. (2-tailed) .037 .918 .891 .009

N 142 142 142 142 142

Pearson
-.221** -.009 1 .020 .125
Correlation
Informativeness
Sig. (2-tailed) .008 .918 .809 .139

N 142 142 142 142 142

Pearson
-.041 -.012 .020 1 .172*
Correlation
Credibility
Sig. (2-tailed) .632 .891 .809 .041

N 142 142 142 142 142

Pearson
-.229** .219** .125 .172* 1
Correlation
Customer
Engagement Sig. (2-tailed) .006 .009 .139 .041

N 142 142 142 142 142

*. Correlation is significant at the 0.05 level (2-tailed).
**. Correlation is significant at the 0.01 level (2-tailed).

Table – 4.14 Correlation Analyses

The above table examines the correlation between the determinants of SA and CE. It
also evaluates the relationship between the four determinants (irritation, entertainment,
credibility, and customer engagement). The value of the correlation coefficient ranges from -
1 to +1 i.e. from perfect negative to perfect positive correlation, while 0 indicates no
correlation. According to the table, the correlation between irritation and customer
engagement is statistically significant at 0.01 level. The Pearson’s r is equal to -0.229, which
 52

shows negative association between the two variables, while the strength of association is
‘small’. It means that increasing irritation from smartphone ads reduces customer engagement
towards the product/brand advertised. The value of Pearson’s R (0.219) between
Entertainment and Customer engagement is statistically significant at 0.01 level. However,
the strength of association is again small/weak and the direction of relationship is positive.
Similarly, the correlation between the Credibility and Customer engagement is significant at
0.05 level, with a weak strength of relationship. Both variables are positively associated with
each other. It shows that increasing entertainment and credibility of the ads positively
influence customer engagement.

The correlation test does not find a significant association between informativeness
and customer engagement. Among the components of SA, Irritation is significantly
associated with informativeness (at 0.01 level) and entertainment (at 0.05 level), with a weak
negative relationship. It means that increasing irritation from SA, reduces the level
entertainment and informativeness.

4.7. Regression Analysis

The section of factor analysis summarised a total of 19 items into 5 components

(factors), which are analysed in this section. It answers the main research question of the
study by examining the impact of the components of the smartphone (mobile) advertising on
customer engagement (CE). In this study, the potential customers are the university students,
who are also users of a smartphone.

Regression analysis is a technique which is used to examine the association between

dependent and independent variables. In this case, Customer engagement (CE) is the
dependent variable, which is tested with four independent variables that are perceived
irritation, entertainment, informative-ness and credibility, as shown in the table below.

Variables Entered/Removeda
Variables Variables
Model Method
Entered Removed

Credibility,
Entertainment,
1 Enter
Informativeness,
Irritation

a. Dependent Variable: Customer Engagement

 53

Table – 4.15 Variables Entered

According to the table, four independent variables are entered in the regression
analysis to examine their impact on CE.

Model Summary

Adjusted Std. Error of

Model R R Square
R Square the Estimate

1 .347a .120 .095 1.20575

a. Predictors: (Constant), Credibility, Entertainment,
Informativeness, Irritation

Table – 4.16 Model Summary

ANOVAa
Sum of Mean
Model df F Sig.
Squares Square
Regression 27.227 4 6.807 4.682 .001b
1 Residual 199.177 137 1.454
Total 226.404 141
a. Dependent Variable: Customer Engagement
b. Predictors: (Constant), Credibility, Entertainment, Informativeness, Irritation

Table – 4.17 ANOVA

According to the table 4.17 (ANOVA), the overall multiple regression model,
comprising of four predictors (Credibility, Entertainment, Informativeness, and Irritation) and
a constant term are statistically significant in predicting/explaining customer engagement at
5% level of significance as the sig. value is less than the assumed threshold of 0.05. It means
that the engagement of university students (potential customers) with an advertised brand,
product or service is influenced by the components of smartphone advertising. The F statistic
is equal to 4.68, which shows the combined strength of the model.

The table – 4.16 presents the model summary of analysis. According to the table, the
R Squared value is equal to 0.12, which shows the goodness of fit. In other words, it explains
the ability of the model or the regression line to approximate/estimate the real data points. In
the analysis, 12% of variance in the dependent variable (CE) is explained by the set of
independent variables (Credibility, Entertainment, Informativeness and Irritation). The value
of Adjusted R Square is equal it 0.095 i.e. 9.5% of explained variance. This value adjusted
the sample size and the number of predictors, and thus presents the true explanatory power of
the model.
 54

Coefficientsa
Unstandardized Standardized
Coefficients Coefficients
Model t Sig.
Std.
B Beta
Error
1 (Constant) 1.311 1.408 .931 .354
Irritation -.309 .152 -.170 -2.032 .044
Entertainment .328 .139 .192 2.360 .020
Informativeness .180 .173 .085 1.038 .301
Credibility .290 .141 .165 2.063 .041
a. Dependent Variable: Customer Engagement

Table – 4.18 Coefficients

The table 4.18 examines the individual significance or contribution of the independent
variables in predicting Customer engagement (CE), to evaluate which factors have a
significant impact. According to the above table, at 5% level of significance, Irritation,
Entertainment and Credibility are statistically significant in explaining and influencing CE,
whereas Informative-ness and the constant term are statistically insignificant.

The p value (sig. value) of Irritation is equal to 0.044, which is less than the threshold
of 0.05, indicating significant impact of Irritation on CE. The value of Beta is equal to -0.309
i.e. negative, which shows that increasing perceived irritation from smartphone ads would
result in decreasing customer engagement with the product/service. The sig value of
Entertainment is equal to 0.020, which is less than the threshold of 0.05, indicating significant
impact of Entertainment on CE. The value of Beta in this case is equal to 0.328 (positive),
which shows that increasing perceived entertainment of the customers (university students)
from the SA, would increase CE with the advertised product/service. Similarly, the sig value
of Credibility is equal to 0.041, which is less than the threshold of 0.05, indicating a
significant impact of Credibility of the advertisement (believability and truthfulness) on CE.
The beta value, in this case, is equal to 0.290, which shows that increasing Credibility of the
SA enhances CE with the advertised product/service. The sig value of Informativeness is
greater than the 0.05 level, which shows that the variable does not influence CE in this case.
The constant term in the regression model is also insignificant at 5% level of significance, as
its p-value (sig value) is greater than 0.05.
 55

On the basis of above analysis, the research study finds that three components of
smartphone advertising significantly influence customer engagement, which includes
Irritation, Entertainment, and Credibility. The study presents following regression model,
which can be used to evaluate customer engagement statistically:

CE = 0.328E + 0.290C – 0.309I + e

Where CE, E, C and I represent Customer Engagement, Entertainment, Credibility

and Irritation
 56

Chapter 5: Conclusion

5.1. Conclusion

In the consumer market, the mobile and smartphone advertisement can have a
significant influence on the consumers’ purchase intention. With an increasing smartphone
and other mobile devices’ penetration in the market, a new opportunity is created by Mobile
advertising (MA) for the marketers to transmit their promotional messages. MA is considered
as a business of pursuing and encouraging consumers, using new media communications, to
get engaged with brands, products or services. MA helps the marketers to set a unique,
customized, and personalized advertisement. There are a number of communication channels,
which can be used by the companies or marketers to engage their customers, include SMS,
MMS, and the mobile internet. The trend in the mobile-optimized advertisement formats are
increasing and marketers are learning its effective use. With the passage of time, there is a
significant increase in the number of smartphone users, along with the use of internet via
smartphones. The global smartphone adoption by the consumers reached 25% of the world
population in the year 2014. The smartphone proliferation and adoption around the world has
provided a tremendous opportunity to the marketers to target and attract consumers.

The research study reveals that the mobile ad expenditure is predicted to reach the
annual level of $94.91 billion in 2018. In the recent years, the Eurozone recorded the highest
growth in mobile advertising spending, followed by the United States and the UK. According
to the study, the concept or notion of Customer Engagement (CE) is significantly important,
which defines the association between a customer and a brand. It is a recognized fact that
customer loyalty with a brand is influenced by frequent positive engagements. The study
describes the characteristics of high engaged customers behaviour, which include
product/service evangelists, purchasers, responders and loyal.

In the context of CE, it is significant for the marketers to develop strategies which can
connect and engage customers, with the rise of social and mobile technologies. Businesses
are striving hard to deliver personalized and real-time experiences to their customers, in order
to better engage them. CE is taking many forms, and businesses have more opportunities to
communicate and engage their audience. Companies around the world are working on their
marketing strategies to update them according the need of time. A number of useful strategies
can be adopted by business to increase CE, such as using digital technologies as a tool to
provide more value; delivering the customers real time benefits; analysing customer data etc.
 57

To enhance CE, the user of mobile advertising (MA) or smartphone advertising (SA)
is one of main strategies. The study reveals that the use of SA is a significant source of
competitive advantage and significantly drives CE. Previously a number of research studies
have examined the subject of MA/SA. In the recent years, research papers also elaborated the
concept of customer engagement. However, the specific association between the two
constructs is missing. The enormous expansion of the smartphone, online apps and social
media has also triggered the need to explore the association, which along with theoretical
implications, have also certain managerial/business implications.

The research study also conducted a comprehensive literature review. The literature
review covered various headings, including mobile advertising; customer engagement;
mobile advertising and role of smartphone; the influence of social media in MA and
establishing CE; and the impact of MA on consumers. According to Bart, Stephen, and
Sarvary (2014) the impact of MD campaigns on purchase intentions and favourable attitudes
of the consumers is significant and positive at the time when the associated products were
utilitarian and higher involvement. The study also suggested that the effective application of
MDAs stimulate product recall in the consumers. Johnston, Komulainen, Ristola and
Ulkuniemi (2012), in the context of MA, emphasized that that it is important for the
advertiser (using MA) and the customers to actively involve and engage in the mobile
service’s co-creation, it is difficult to reach the potential of value creation. The literature
revealed, six important personalized advertisements’ design attributes are identified, which
includes type of mobile device, brand, interest, promotion, preference, and price (Chen &
Hsieh, 2012).

Wong, Tan, Tan and Ooi (2015) found that the higher penetration rate of mobile
phones coupled with the continuing evolutions of Internet, have created a new marketing
activities’ platform i.e. mobile advertising. The study found that the Use of Technology (UT)
and Unified Theory of Acceptance (UTA) constructs have significant positive impact on the
behavioural intention. Scharl, Dickinger and Murphy (2005) study developed a conceptual
model for successful SMS advertising, which distinguished the success factors categories:
media characteristics (media cost, product fit, transmission process and device technology)
and message (content, consumer control and personalization), which influence consumer
attention, intention and behaviour. Li and Stoller (2007), in the context of MA, found that the
impact of exposure to MA is substantial on brand recall and moderate on purchase intent and
brand association. Similarly, Kaasinen and Yoon (2013) revealed that for mobile advertising,
 58

the service engagement model, which is based on the user behaviour, provides various
benefits for the users and companies, which includes increased interest and care for the
customer and more sales revenue for the companies.

A number of researchers have defined and explained customer engagement (CE), and
evaluated its significance. According to Cabiddu, Carlo, and Piccoli, 2014, a number of
engagement-based concepts have been proposed, which include customer engagement
behaviour, customer brand engagement, user-generated hotel reviews, customer engagement
cycle, online customer engagement, community engagement, customer engagement value,
customer engagement behaviour’s co-creation. Gummerus, Lijander, Weman and Pihlstrom
(2012), while explaining CE, identified that CE can be classified into Transactional
Engagement Behaviours (TEB) and the Community Engagement Behaviours (CEB).
Moreover, it identifies three benefits of the relationship, which includes economic benefits,
entertainment benefits, and social benefits. Hammedi, Kandampully, Zhang and Bouquiaux
(2015) focused on the significance of strengthening the customer-brand association and
extend the understanding of the motivation of online brand community. In another study,
Sashi (2012), defined the CE cycle, which constitute the process of building and developing
CE, which consists of the phases/stages of connection, communication, contentment,
retention, advocacy, commitment and engagement.

According to Sashi (2012) there are four types of relationships in the customer
engagement matrix, depending on the degree of emotional bonds and relational exchange,
which include fans, loyal customers, delighted customers, and transactional customers.
Vivek, Beatty, and Morgan (2012) termed involvement and participation of potential and
current customers serve as CE’s antecedents, while Verma (2014) defined CE as a key to
establish customer loyalty, which is a component of relationship marketing. According to
Šonkova and Grabowska (2015), there is a growing role of relationship marketing on CE.
Companies around the world are using the concept of relationship marketing to reach and
exceed expectations of the customers by implementing proper strategy of relationship
marketing. Yu, Veeck and You (2015) revealed that the four variables customer relationship,
brand attachment, self-enhancement, and brand loyalty are significantly and positively
associated with CE. Jayasingh and Venkatesh (2015) found that that the CE’s key
determinant is the frequency and content-related brand posting activities, and not the number
of fans following on the Facebook. Roberts and Alpert (2010), identified the five levels of
 59

total CE, and proposed key strategic elements in the total CE model, which include customer
experience, internal culture, brand, and customer value proposition.

The previous and existing literature emphasized on the role of smartphones.

According to Kim and Han (2014), in the context of SA, advertising flow and value are the
key purchase intention’s determinants, where advertising value is positively associated with
incentives, entertainment and credibility. Watson, McCarthy and Rowley (2014) found that
acceptance of the consumers regarding SA can be increased by creating sense of being in
control, trust-building, permission marketing and entertaining and useful website content.
Kim (2014) similarly emphasized on the role of trust in advertisement, which is induced by
the specialist smartphones and applications. According to the results of Nyheim, Xu, Zhang,
and Mattila (2015) there is a positive impact of advertising irritation over advertising
avoidance. Kim and Park (2013) found the influence of personalisation and informativeness
is statistically significant and positive on CE.

The study also discussed the role of Social Media in MA and establishing CE.
Dehghani and Tumar (2015) discussed Facebook advertising, which is affecting brand equity
and brand image, and influences purchase intention of the consumers. According to Cabiddu,
Carlo, and Piccoli (2014), there are three distinctive social media affordances in the context
of CE: triggered engagement, customized engagement, and persistent engagement. Verma
(2014) revealed that in triggering an active CE, blogs and social networking websites plays a
significant role, with advertisers and other community members. The overall CE is produced
by the subject and the object’s interaction with underlying dimensions such as behaviour,
emotions and cognition. Oviedo-García and Muñoz-Expósito (2014) found that the
measurement or assessment of CE in Facebook would enable marketers to evaluate the type
of content generating better engagement. Vadivu and Neelamalar (2015) discussed that social
network marketing is an important tool to enhance brand recognition, loyalty, and richer
experience to the customers. The study found that the quality of post and level of interactivity
on social networks grabs the social audience attention and increase engagement. Takran and
Ylmaz (2015) examined that social media has the capability to engage customers via
increased interactions and relationships.

The thesis also examined the association between Mobile advertising and consumers.
According to Austin (2012), for good mobile campaigns, it is important to provide an
adequate notice to the prospective customers that would allow him/her to make an informed
 60

decision about the content. The study further revealed that in mobile marketing and
advertising, it is also significant to maintain appropriate security, and customize
communications where possible. Nguyen (2014) found a significant and positive influence of
message credibility and entertainment on consumers’ attitude toward MA, while the factors
of irritation and informativeness are unable to predict the consumers’ attitude significantly.
Asimakopoulos, Spillers, Boretos, and Liu (2013), in the context of MA and Consumer,
compared different nations and cultures, and found that as compared to the other users, the
Chinese respondents have higher expectations for usefulness, relevance, and information
value of MA. Kim and Adler (2011) found a positive impact of use of mobile hotel apps on
brand loyalty due to increase in brand commitment, customer engagement, and brand
awareness.

To explore and examine the research problem, i.e. the impact of SA on CE, the
research study adopted a quantitative research approach, which helped applying different
statistical methods and techniques to examine the research questions/hypotheses. The purpose
of the thesis is explanatory (explanation) i.e. the case of MA and CE is explained, with a
focus on smartphone advertising and university students. The study followed a descriptive
and correlation designs to examine the impact of the components of the smartphone (mobile)
advertising. It added both primary and secondary data sources. Primary data sources are the
university students, which were directly involved in the data collection process. The study
collected secondary data to elaborate the smartphone use. GEM University students were
selected as the research population of the study (potential customers of online advertised
products/services). The university students were chosen as the respondents or participants of
the study due to their high perceived online usage via smartphone. The study, following a
convenience sampling techniques, collected a random sample of 142 respondents with the
help of questionnaires.

According to the methodology, the study used a five point Likert Scale (1-5)
questionnaire, which consists of multiple items for each component of SA and CE. The
questionnaire also includes questions to evaluate the demographics of the respondents. As
the study follows a quantitative research approach, it applied various statistical tests
including, descriptive statistics, correlation analysis, reliability test, factor analysis and
multiple regression analysis. Descriptive statistics and correlation analysis are applied on the
secondary data collected to elaborate the smartphone and internet use.
 61

The research aimed to examine the impact of SA on CE, and for this purpose
following research questions were purposed:

The main research question of the study is:

“What is the impact of the components of smartphone (mobile) advertising on customer

engagement i.e. how the viewers (university students) of internet-based mobile ads, using
their smartphones, get engaged with the advertised product/brand based on the factors?”

On the basis of the above research questions, following sub-questions are formulated:

III. What are the principal components or determinants of smartphone advertising (which
comprises of mobile web advertising, mobile video and application advertising units)?

IV. What is nature of relationship between the components of smartphone advertising on

customer engagement?

The research study addressed the first sub question earlier, and identified a number of
components or determinants of SA with the help of the previous and existing literature. The
factors/determinant include Message/ Ad Credibility, Message Customization/
Personalization, Ad Content, Consumer Ability, Irritation, Customer sociability, Technical
convenience, Relevance/ Perceived Usefulness, Interactivity, Permission and Privacy,
Personal innovativeness, Performance expectancy, Mobile skilfulness, Informativeness,
Enjoyment/Entertainment, Incentives, Perceived ease of use, Reference Group, Perceived Ad
Value, and Perceived Control. Based on the number of references, the study considered Ad
Credibility, Perceived Entertainment, Informativeness, and Irritation as part of the research
model, along with customer engagement.

According to the data analysis, investigating the smartphone use with the help of
secondary data, the study found that worldwide, almost 43 out of 100 people own a
smartphone (the mean value of smartphone ownership rate is 42.7% in the selected 40
countries). South Korea has the highest rate of smartphone ownership, which is equal to 88%,
while Ethiopia and Uganda have the lowest smartphone ownership rate i.e. 4% each. The
study conducted a correlation test using the secondary data, to examine the relationship
between smartphone ownership and the internet use. According to the results, there is a
significant and a strong positive association between the two variables. It shows that
 62

increasing ownership of smartphone influences the use of internet worldwide, which may
also increase the interaction with online mobile ads.

In the analysis of the primary data, the study revealed majority of the respondents as
male (58.5%). It also found that majority (52%) have a daily online usage in between 1 to 3
hours on average and majority of the respondents/students (31%) consider smartphone apps
as a channel which mostly causes interaction with ads. The study also performed a reliability
test to examine the degree of internal consistency or stability of the observations. Using
Cronbach’s alpha (α), the study found that each of the four components of smartphone
advertising (Irritation, Entertainment, Informativeness, and Credibility) and CE have a high
degree of internal consistency.

The study performed factor analysis (PCA) to reduce the number of items into
unobservable (latent) variables. The study uses PCA to reduce the original 19 items into 5
components/factors. It performed Bartlett's test and KMO to examine the appropriateness of
running PCA and the sampling adequacy respectively. The results revealed appropriateness
and adequacy of the sample. Using Varimax rotation method, the research summarized the
items into 5 components (Irritation, Customer Engagement, Entertainment, Informativeness,
and Credibility).

The impact of the components of smartphone (mobile) advertising on CE is evaluated

using multiple regression analysis, where CE is the dependent variable and irritation,
entertainment, informative-ness & credibility are the four independent variables. The research
study proposed hypotheses, which were tested using the regression analysis. The hypotheses
are:

1. Perceived Ad Credibility positively influence Customer Engagement.

2. Perceived Entertainment positively influence Customer Engagement
3. Perceived Informativeness positively influence Customer Engagement
4. Perceived Irritation from Smartphone Ads negatively affect Customer
Engagement

According to the test, the overall multiple regression model, comprising of four
predictors and a constant term are statistically significant in explaining customer engagement
at 5% level of significance. It shows that the engagement of university students (potential
customers) with an advertised brand, product or service is influenced by the components of
 63

smartphone advertising. The results also found that 12% of variance in the dependent variable
(CE) is explained by the set of independent variables.

To answer the main research question, the sub question 2, and the hypotheses, the
study provided individual analysis of the four independent variables. According to the results,
at 5% level of significance, Irritation, Entertainment and Credibility are statistically
significant in explaining and influencing CE, whereas Informativeness and the constant term
are statistically insignificant. In the context of the nature of relationship, Irritation is
negatively associated with CE, while Entertainment and Credibility are positively related
with the CE. It shows that the three components of smartphone advertising significantly
influence customer engagement, which includes Irritation, Entertainment, and Credibility.

5.2. Theoretical Implications

As discussed in the literature review, a number of studies have examined the impact
of MA/SA on the consumer attitude, purchase intention, and engagement. According to
Tsang, Ho and Liang (2004), without specific consent of the consumers, the attitude is
generally negative towards mobile advertising. It is also found that the relationship between
consumer behaviour and consumer attitude is positive. Izquierdo-Yusta, Olarte-Pascual and
Reinares-Lara (2015) found that the attitude towards mobile advertising is positively related
to intention to receive advertising. According to Cho, Luong and Vo (2016) the four factors
include credibility, irritation, informative-ness, and entertainment are significantly affecting
the consumer attitude towards mobile advertising. The study also found a positive association
between the buying decisions and the attitudes of consumers towards mobile advertising.

Gao and Zang (2016), in the context of MA revealed that to receive mobile
advertisements, 80 % of consumers’ intention is explained attitude of the consumers towards
mobile advertising. With the perspectives of the components of mobile advertising, Okoe and
Boateng (2015) found that the variables: personalization, credibility, and entertainment are
having positive impact on the attitudes of consumers toward mobile advertising. It showed
that the willingness of the consumers to accept mobile advertising is determined by the
consumers’ attitude toward mobile advertising. Vadlamani (2011) discussed CE in the
context of MA, and found that the rich media arrival, including the mobile medium, has
allowed two-way conversations for the brands and stimulates customer engagement in a way,
which was not possible through traditional media. In another study related to the components
of MA, Badlyanl (2013) found the factors influencing MA acceptance, which include
 64

consumer’s ability, message content, message customization, message credibility and

consumer inertia. Altuna and Konuk (2009) evaluated the significant difference in the attitude
of US and Turkish consumers, where the attitudes of the respondents from US are more
positive towards mobile advertising as compared to the respondents from Turkey.

The current research study is contributing to the literature related to MA/SA and CE.
More specifically, in the context of the impact of Smartphone advertising on customer
engagement, research gap exist. The current study aimed to fill the gap by explaining the
association between the components of SA and the CE. The research study formulated a
statistical model, according to which, the Entertainment, Credibility and Irritation
significantly influence Customer (students) engagement. It shows that the three variables are
important to the customers for the creation of their engagement with the product/service.

5.3. Managerial Implications

As discussed in the previous chapters, the concept of CE is very crucial in marketing

now days. Businesses and managers around the world are seeking ways to influence CE,
which directly impact the performance of their product/service and increases sales/revenue
and growth. Mobile/Smartphone advertising is one of the most powerful tools affecting the
consumers’ choice, intention and engagement. In addition, the smartphone adoption around
the world has provided a tremendous opportunity to the managers to target and attract
consumers, via MA/SA.

The current research study, by developing a smartphone advertising-based customer

engagement model, provides a guideline to the managers and businesses to focus on the
significant determinant of SA influencing CE. The model might be useful for achieving long-
term CE (via SA) and business growth of the organizations.

5.4. Recommendations

On the basis of the results of the statistical analysis, following recommendations are
given:

1. The research finds a positive impact of SA credibility and entertainment on CE,

therefore it is recommended to focus on improving the ad content credibility and
include more elements of enjoyment or entertainment to positively influence CE.
 65

2. The study also finds a negative association between irritation and CE. Therefore, the
study recommends removing annoying content and reducing the level of inference to
increase CE.
 66

Chapter 6: Limitations and Areas of Future Research

6.1. Research Limitations

The research limitations are characteristics or features related to the design or

methodology of a study that may influence or impact the research findings’ interpretation.
Limitations of study are regarded as constraints limiting the research scope, generalizability,
and the findings utility, which the researchers had originally planned to extract from the
study. It is important for study to acknowledge and recognize the limitations of the study and
to evaluate their impact. In the following discussion, the research limitations in terms the
research methodology and other relevant issues are explained.

1. Sample Size: The sample size of the current study is limited to 142 respondents
(students), which may not truly represent the entire research population. The research
study involves a quantitative analysis to evaluate the impact of mobile advertising on
customer engagement, therefore, in this case, it is important to ensure a populations’
representative distribution which is possible through larger sample size. Sample size
is more relevant in quantitative studies, as result generated from large sample can be
easily generalized or extrapolated.
2. Prior Research Studies: As discussed earlier, limited amount of work is previously
done related to the research problem. Previous studies have elaborated the subject of
mobile advertising, and customer engagement with the perspective of online media.
However, the specific association between the two variables that is the impact of
mobile advertising (MA) on customer engagement (CE) is not widely explored. The
lack of previous research specifically related to the association between MA and CE,
also makes it difficult for the researcher to follow the explanatory research design.
3. Research Instrument: The research instrument used for data collection is a five-point
Likert scale, which measures different components of Smartphone advertising and
customer engagement with multiple items. The research questionnaire is based on
various previous studies, which does not help exploring any theme or phenomenon.
This limitation is more related to the research purpose and the design of the study.
4. Sampling Strategy: For data collection, the study follows a convenience sampling
strategy, which considers the factors of proximity and accessibility during the process.
The sampling technique is a type non-probability sampling, which may create a bias
in survey sampling (selection bias).
 67

5. Data Measurement: The study uses different quantitative method and techniques to
evaluate the research questions, and for this purpose it considers likert-scale
questionnaire data, which measures the items based on an ‘ordinal scale’ from
strongly disagree to strongly agree (1-5). It is often argued that an ordinal data cannot
be used in factor analysis and subsequent statistical tests. However, the current study
assumes, based on the methodology large number of studies, that ordinal data can be
used in the factor analysis.
6. Cultural Aspects: The research study does not consider and addresses cultural aspects
in mobile advertising, which may influence customer engagement in collaboration
with the components of smartphone advertising.
7. Time and Financial Limitations: Time and financial constraints usually influence
research studies, as due to such limitations, a research may not be able to explore its
full potential. Due to limited time for the submission of the thesis and limited
resources, the study is not able to extract and explore all aspects of the research
problem.
8. Multiple Items: The number of items for each construct may not be sufficient enough
to appropriately measure and represent the constructs. However, the items are based
on a number of previous studies (Gao & Zang, 2016; Kim & Han, 2014; Tsang &
Liang, 2004; Okoe & Boateng, 2015; Cho, Luong & Vo, 2016).

6.2. Areas of Future Research

Based on the literature review and findings of current research study, following are
some of the recommendations for future researchers exploring the relationship between
Smartphone advertising and customer engagement:

1. The research purpose of the current thesis was explanatory, as it examined pre-
determined variables. However, there is need to explore the association qualitatively
with an exploratory purpose, to gain more understanding and extract new dimensions
in the relationship.
2. The future research should consider a larger sample size to have a more representative
data and more reliable results
3. For the future research, the study recommends exploring different dimensions of a
customer engagement to examine their relationship with the components of
smartphone advertising.
 68

4. In the current study, the SA component ‘informativeness’ is found statistically

insignificant in affecting CE. It is recommended to consider the variable of
‘informativeness’, in future studies, with different measurement items.
5. Future research may also consider other important components of SA, which include
Message Customization/Personalization, Ad Content, Customer sociability, Technical
convenience, Relevance/ Perceived Usefulness, Interactivity, Permission and Privacy,
Personal innovativeness, Performance expectancy, Mobile skilfulness, Incentives,
Perceived ease of use, Reference Group, Perceived ad value, and Perceived control.
6. The researcher exploring the association between MA/SA and CE may also rely on
secondary data sources.
7. It is also important for future studies to expand the scope with respect to the
respondents. For instance, future studies may include participants from different age
groups and occupations.
 69

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