Brands spent $8.4 billion on mobile advertising in 2013, and that number is expected to quadruple to $36 billion by 2017, according to eMarketer. But do mobile display ads — those tiny banner ads that pop up in your smartphone's web browser — actually work? Researchers at Columbia Business School have found that, despite their size, mobile ads can have a big effect on consumers who are in the market for certain types of products.
"Digital advertising in mobile channels is experiencing explosive growth," said Miklos Sarvary, co-director of the Media Program at Columbia Business School and co-author of the new study. "But many marketers are still using a 'spray and pray' approach to digital ads. In other words, they're just putting mobile ads out there and hoping that they work. Limitations in tracking smartphone ads have always made it difficult for marketers to track and optimize their return on investment, but we've unlocked a part of that mystery now, which means they'll know how to best to spend their dollars."
The research, recently published in the Journal of Marketing Research, is titled "Which Products Are Best Suited to Mobile Advertising? A Field Study of Mobile Display Advertising Effects on Consumer Attitudes and Intentions," and co-authored by Andrew T. Stephen, assistant professor of Business Administration at Columbia Business School and Yakov Bart, assistant professor of Marketing at INSEAD.
Researchers found the following information:
- Mobile ads do work for products that have a practical and important use, like a lawn mower or a washing machine;
- Mobile ads do work for high-involvement products (a lot of time, thought and energy is placed into the decision, like a family car);
- Mobile ads don't work for just-for-pleasure items, like fancy watches;
- Mobile items don't work for low-involvement purchases like movie tickets or toothbrush (ones that pose a low risk to the buyer).