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Branded Apps and Mobile Platforms as New

Tools for Advertising
Chapter · January 2016

DOI: 10.13140/RG.2.1.3744.3042
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Running Head: Branded Apps and Mobile Platforms as New Tools for Advertising 1

Branded Apps and Mobile Platforms as New Tools for Advertising
By Becky Wang, Su Jung Kim and Edward C Malthouse
Abstract
With the popularity of mobile devices, firms have embraced mobile platforms and mobile
applications (apps henceforth) as a new channel that can potentially enhance consumer
experience, brand loyalty, and ultimately revenue growth. Unlike traditional advertising
channels, mobile devices are characterized by their portable, interactive, immediate and
ubiquitous nature. As such, a firm can take advantage of app technology and enable
consumers to engage with its brand even when they are on the move. Such “anytime,
anywhere” engagement can positively affect consumers’ attitudes and relationships toward a
brand and their purchase intention. In this chapter, we examine the way mobile platforms and
branded apps forge new grounds in advertising, and we also posit forward-looking
implications that offer managerial recommendations that allow advertisers to strategically
leverage branded apps and mobile platforms to promote consumer engagement and loyalty.
Keywords. Branded apps; New media advertising; Mobile marketing; Interactive features;
Habitual engagement; Relationship management; Native advertising; App discovery; Mobile
platforms; Smartphones; Tablets; Wearables

Branded Apps and Mobile Platforms as New Tools for Advertising 2
Introduction
Ever since the introduction of multi-touchscreen smartphones in 2007, consumers
across the globe have swiftly adopted mobile devices and apps. As of August, 2014, 174
million Americans own smartphones, comprising 72% of the mobile market.1 It is estimated
that media companies and retailers receive more than 50% of online traffic from smartphones
and tablets as opposed to personal computers (PCs).2 Rapid proliferation of mobile devices
and healthy app development ecosystems3 create conditions for the widespread adoption of
apps. Statistics from Apple App Store and Google Play show that the total number of
downloads exceeds 135 billion, and it is expected to surpass 268 billion by 2017.4 Mobile
users spend more than half of their digital media usage time on mobile apps,5 indicating the
prevalence of apps in their lives. In short, consumers are addicted to their smartphones and
tablets.
Considering the increasing level of consumer engagement with mobile devices, many
companies have developed branded apps6 so they can communicate or advertise to attract
new customers and increase brand loyalty among current ones. These branded apps allow
prospective or existing customers to perform an array of tasks such as searching, retrieving,
and sharing information; passing time with entertainment content; paying bills; navigating
maps; making purchases; and performing basic functions such as making calls and sending or
receiving text messages. However, even though app use and mobile commerce are
widespread, many firms have yet to embrace mobile advertising. According to a survey of
445 business leaders, even though a majority sees its value and potential, only 45%
confirmed having leveraged mobile marketing, and 37% cited “lack of strategy” as the top
reason for not having a mobile program in place.7 In addition to this challenge, most apps that
are discovered from app stores will only be used once after the download.8 A major reason
for app abandonment is that consumers do not tolerate even a single bug in an app: 79% of
consumers said that they would retry a failing app only once or twice if it does not work
properly during the first try.9
Given the managerial need and the nascent state of mobile advertising, scholars began
to recognize the emerging power of mobile platforms as a new and interactive way to
communicate with and attract consumers. Earlier literature conceptualizes the phenomenon of
mobile commerce as the ability to utilize networked technologies and communicate
interactively without the restraints of fixed physical locations at any point in time, so that at
least one party can achieve economic benefits.10 The characteristics make it an ideal way to
reach and influence consumers. More recent literature offers a critical review on how mobile
advertising and marketing change the way firms do businesses with their customers.11 In
particular, advertising via mobile platforms requires consumers to opt-in (i.e., consumer
consent is needed for an ad or app to show up on their devices), and it is also unconstrained
by neither time nor location.
Mobile Platforms and New Advertising
When a firm places an advertisement, it seeks to provide information to potential or
existing customers and persuade them to adopt its products or services. Consumers in turn
learn about its offerings through the various channels in which it has advertising presence.
Mobile platforms and branded apps offer new ways and opportunities for brands to influence
awareness, recall, attitudes, preferences, and ultimately, decisions during their learning and
buying processes. Building upon existing practices and theories in multichannel advertising
and marketing,12 we propose that branding via mobile platforms is a powerful tool that allows
advertisers to generate cross-channel synergy alongside other advertising media such as PC
Internet, search engine results and personalized emails.
However, mobile platforms are not a typical advertising channel. Existing theories on
consumer learning13 suggest that consumers make decisions on brand choice after they have
learned about its products and services. Before the existence of mobile technology,
consumers’ learning abilities depended on their surroundings (e.g., they could only access
brand information when a PC or television was available). Due to their ubiquitous nature,
mobile devices allow consumers to learn about the brands more immediately. Extending
existing theories on consumer learning and interactivity, we contend that mobile platforms
provide consumers with an interactive brand experience, which enhances the firm’s
persuasive effectiveness and increases consumers’ positive attitudes and purchase intentions.
Branded apps also change the way advertising influences consumers’ interactions
with a brand. Because mobile devices are engrained in consumers’ daily lives, branded apps
can potentially achieve what other channels typically cannot – (1) to actively prompt for
context-dependent recalls on a frequent, immediate basis and (2) to alter the way consumers’
make use of a brand’s offerings. Thus, branded apps are useful instruments that can persuade
consumers and facilitate their learning process. Additionally, branded apps break new
grounds because, when implemented successfully, they trigger consumers to form new
consumption habits or reinforce existing engagement behavior.
Having highlighted the importance of branded apps and how they fit into advertising,
we organize the rest of the chapter as follows. We first discuss mobile media as an added
channel in multi-channel advertising and marketing. Then, we turn to the question of what
makes mobile platforms, especially mobile apps, unique by exploring the concept of
interactivity and the application of interactivity in a mobile context. Next, we examine how
branded apps can contribute to habit formation and reinforcement by providing apps with
high “stickiness.” In addressing each point, we will provide selected research findings
pertaining to advertising strategies using mobile platforms—particularly as a contact point for
both communicating with consumers and facilitating their buying process. Finally, we
conclude with recommendations to advertising students and practitioners.

The Synergetic Role of Mobile Apps in Cross-Channel Advertising
From an advertiser’s point of view, the emergence of a new medium, such as online
and Internet-based platforms, offers the opportunity to increase the reach and frequency of ad
campaigns. Research on Internet advertising shows that by exposing customers to marketing
communication messages via banner ads or online video ads, their positive affection14 and
cognition15 increase. Cross-channel advertising has a positive effect on firm performance if (1)
increased access by a brand’s cross-channel availability leads to higher brand loyalty16 and (2)
multiple touch points across different platforms generate synergy among media platforms,
both of which result in the overall effect exceeding the mere sum of each marketing mix
channel’s effect.17
Empirical evidence shows that television is the medium that can achieve the largest
reach when used as a single channel for advertising.18 However, an addition of more
channel(s) does not always increase brand recall or retention.19 One possible explanation
regarding the inconsistent results of cross-media campaigns is that there is a threshold where
an increasing level of exposure to ad messages yields the maximum positive results. Once
past the threshold, consumers’ perception of the given brands turns negative because
consumers tend to think that brands that run too many commercials are of low quality.20 A
second explanation is that if ad campaign messages are similar and congruent across
platforms (i.e., higher fit), the focal brand is less recognized and recalled because the use of
the same verbal and/or visual cues reduces the need to pay more attention from the
consumer’s perspective. A cross-media campaign with different verbal and visual elements
across platforms (i.e., lower fit) garners more attention due to the inconsistent cues it
provides its viewers.21 Third, synergy may come from different formats used in ad content
but not different devices.22 Experiments conducted by Varan et al. showed that displaying ad
content in the same format (i.e., video) using different devices (TV, PC, mobile phone, iPad)
did not produce synergy, whereas using different formats with interactivity (e.g., banner ads
superimposed on video channels on a mobile phone) did.
The potential of mobile apps as a new advertising channel lies in their ubiquitous and
interactive nature. Advertising or marketing through apps is more than adding a traditional
offline or conventional PC-Internet channel. Their enhanced digital mobility allows
consumers to overcome time and spatial constraints so that they are now able to engage with
a brand in a seamless fashion, which to some extent resolves the issue of repetition or lack of
fit. Wang, et al. (2015) examined the adoption of app use in the context of online grocery
shopping.23 They found that customers already familiar with PC-shopping are more likely to
return to the retailer after adopting the app to shop. Additionally, brands should encourage
customers to engage in multiple channels. Customers who utilize all possible online
platforms – PCs, smartphones and tablets – to shop generate the most revenues, as shown in
Figure 1.
Figure 1: Example Showcasing the Importance of Multi-Channel Engagement: Customer

Purchase Behavior by Channel Use
Average Order Sales (Dollars) Average Interpurchase Time (Days)

180
22
170
20
160
18
150
16
140
All PC Tablet PC Tablet All PC PC

Devices Tablet Phone Phone Tablet PC Phone Phone Devices Phone Phone Tablet Tablet PC
Note. Customers who shop using all device types – PCs, smartphones, and tablets – are ones
that place the highest order size, without sacrificing order frequency. Revenues from multi-
channel segments are the highest. Data from a major U.S. based Internet grocer, July 2011
through June 2013.

Mobile Devices Are Ubiquitous
The most frequently mentioned characteristic of mobile technology is (perceived)
ubiquity.24 Oxford English Dictionary defines ubiquity as an attribute that allows an entity or
a person “to be everywhere at once” or be “seen or encountered everywhere.” According to
conceptualizations in extant research, ubiquity is a multidimensional concept that includes
continuity (i.e., the state of being “always on”), immediacy (i.e., perceived time between an
action and its resulting consequences), portability (i.e., the quality of being light enough to be
carried for long periods of time) and searchability (i.e., the capability of making a thorough
examination to find information).25 In an advertising context, mobile media are distinct from
other mass marketing channels because they enable location-specific, wireless and portable
communication.
Taking advantage of these characteristics, consumers who adopt mobile devices now
have a “life on the screen” and have the ability to interact with any brands that fit into their
lifestyles.26 Mobile devices are portable and personal, so unlike other types of media or
consumer electronics, they are not only functional gadgets but “cultural objects” as well.27
Consumers’ mobile lifestyles provide additional opportunities for a brand to build and
maintain personal and frequent relationships with its customers anytime, anywhere.
Mobile Devices Provide Utility and Entertainment

Consumers can enjoy a wide range of values made available on mobile platforms.
These include a number of informational, entertainment, social and monetary values.28 For
example, consumers can search for and have easier access to information using mobile apps
or mobile Internet. Streaming music and movies or playing games on the go becomes a great
way to pass time. Many social media apps or branded apps offer “sharing” features, which
allows consumers to post their status, feelings and thoughts on social media. These apps are
also a tool to receive discount or promotion offers. Many branded apps offer incentives in the
form of discount coupons, promotion codes, or punch cards at the time of download to attract
customers as the first step to build a long-term relationship.
Consumers decide to adopt a new technology when they determine they can
successfully extract utility or gratifications by using it. Technological acceptance model
(TAM) and other approaches based on uses and gratifications confirm that the adoption of
mobile phones and services is indeed influenced by several motivational factors. People in
Hong Kong have a myriad of intentions when they use mobile phones, including, but not
limited to, 1) looking stylish, 2) showing affection to family members, 3) relieving boredom,
4) doing financial activities and 5) having a sense of security. 29 The intention to use mobile
services is a function of perceived usefulness, perceived ease of use, perceived
expressiveness and perceived enjoyment.30 In sum, people aim to seek informational,
financial, entertainment, cultural and social gratifications when they adopt mobile devices
and services.
Persuasive Effects of Adopting an App on Brand Choice and Spending
Motivated by these types of values, consumers may initially choose to adopt an app.
What is less clear is whether branded apps have any persuasive effect on consumers’ attitudes
or behaviors. Bellman et al. (2011) conducted an early study, examining the financial effect
of using branded apps.31 They did an experiment to see whether using popular branded apps
impacted brand attitude and purchase intention. They found that consumers who used
branded apps had higher interest in the brands and the product category in which the brands
belonged. The style of the apps also matters. Apps with an informational/user-centered style
(i.e., utilitarian/goal-directed creative style for online shopping or banking) are more effective
in increasing purchase intention than apps with an experiential style (i.e., experiential creative
style such as online magazines or chat rooms). Friedrich et al. (2009) maintained that mobile
platforms have the greatest potential to enhance consumer engagement, brand loyalty, and
lifetime value compared to existing marketing channels.32
Kim, et al. (2015) used empirical data from a large coalition loyalty company to show
how consumers’ app adoption can financially impact a brand’s revenues.33 They found that
consumers who downloaded a brand’s app showed an increasing level of spending compared
to their “twins”—those consumers whose pre-app adoption spending levels were similar but
who did not download the app. Relative to their twins, adopters’ spending levels show an
increase after app use. As shown in Figure 2, the impact was not only immediate (as seen
during the month of first app use), but it also continued at an attenuated level after the month
of adoption.
Figure 2: Example Showcasing the Importance of Interactivity and App Feature Adoption
Launch
90
80
Point Accrual
70
60
50
40
Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb
2012 2013
Adopters Non-Adopters
Note. Customers who use both features - personalized information lookup and location-based
check-ins – show the most increase in spending (measured by point accruals in this context)
after app adoption. Comparison is between app adopters with non-adopters whose preexisting
spending behaviors are similar. Data from a Canadian loyalty coalition company, Mar. 2012
through Feb. 2013.

Another way that apps can increase lifetime value is from advertising. For example, if
users are exposed to ads then the app owner can charge the advertiser for access to the
audience.
Apps Offer Rich User Experience and Interactive Features
The persuasive effectiveness of branded apps is attributable to the rich user
experience made possible by interacting with the app and the brand.34 What specifically
makes the experience of using a branded app unique and why does it generate a positive
attitude toward the brand? A content analysis35 sheds some light on the mechanisms by which
branded apps influence consumer behavior. This analysis coded interactive features of 106
global brand’s apps and found that most apps use attributes such as vivid graphics, sounds, or
animations, in addition to novelty, motivation, control, customization and feedback. Unlike
computer-based websites, branded apps provide a greater sense of control to consumers with
navigation and other features that can be easily used in the mobile environment, which are
known to generate positive attitudes and/or behavioral intentions to the content or the product
being advertised.36 These apps also increase consumers’ enjoyment and willingness to
continue the relationship by including gamification features or providing a chat box for
customer service.
The concept of interactivity provides theoretical explanations for how branded apps
can lead to positive awareness, attitudes, intentions, and behaviors. Many scholars have
attempted to define this concept and its sub-dimensions, particularly in a web context.
Kiousis (2002) provided a comprehensive review of interactivity.37 According to him,
interactivity refers to:
The degree to which a communication technology can create a mediated environment
in which participants can communicate (one-to-one, one-to-many, and many-to-many),

both synchronously and asynchronously, and participate in reciprocal message
exchanges (third-order dependency). For human users, it additionally refers to the
ability to perceive the experience as a simulation of interpersonal communication and
increase their awareness of telepresence. (372)
Kiousis’ definition suggests that interactivity has three dimensions: technological
characteristics (e.g., range, speed, timing flexibility, and sensory complexity), communication
setting characteristics (the interconnected relationships among exchanged messages), and
perceptions of audience members (e.g., perceived speed, proximity, and telepresence).
Interactivity can be an important feature in ad messages. When delivered with interactive
features, ads allow for a more active and engaging consumption experience, which can then
lead to consumer retention, positive attitudes, and increased sales.
Literature also differentiates interactivity into machine and person interactivity.38 In a
mobile context, machine interactivity refers to a user’s capability to access content and
information via its technological functions. Examples include tools embedded in smartphones
or tablets (e.g., hyperlinks, drag-and-zoom controls and screen flips with gyroscopes). Mobile
person interactivity, on the other hand, refers to perceived closeness amongst humans when
they interact with each other using mobile platforms. Examples include click-to-call, live chat,
consumer reviews, and any features that help engender a sense of social connection with a
brand or other consumers. Research shows positive influence of both machine and person
interactivity on consumers’ perception, attitudes and financial performance.39
Persuasive Effects of Adopting an App’s Interactive Features
Interactivity can be attributable to an app’s ability to provide personalized or location-
based information. Similar ad messages delivered with interactive features make the
consumption experience of such messages more active and engaging, which can produce
higher brand retention, positive attitudes, and increasing sales. Kim, et al. (2015) focused on
the use of two interactive features that are available from a branded app of a coalition loyalty
company, which partners with a variety of retail stores across multiple categories in Canada.
Consumers who download the loyalty program’s app can use it to look up personalized
information such as their loyalty point balances or search for reward items (Figure 3-a).
Additionally, the app leverages GPS technology of mobile devices and provides location-
based features such as finding nearby partnering stores or checking-in at those storefronts
(Figure 3-b). Their study showed that using either of the two features had a positive effect on
spending levels at the partnering stores. Additionally, the positive effect on spending was the
highest for consumers that used both app features (Figure 2). If a brand succeeds in engaging
and interacting with its consumers in multiple ways through its app, it can increase its
revenues. By logging in with a branded app and using its features, consumers experience
multiple touch points, which further deepens their relationships with the brand.
Figure 3: Example of Interactive Features of a Branded App
a) Personalized Information (fig3a.png)
b) Location-based Store Search and Check-In (fig3b.png)

c)
Engaging Consumers through Mobile App Stickiness
We have established that after consumers adopt a branded mobile app and use its
interactive features, their subsequent spending levels increase. Now we draw from literature
and use the concept of “stickiness” to discuss the effect on consumers’ spending behavior if
they develop a habit of repeatedly using a branded app.
The concept of stickiness is not new. It has been discussed since the emergence of the
Internet. Website stickiness is defined as “the ability of web sites to draw and retain
consumers.”40 It is regarded as the level of users’ value expectation when they visit a site.
Website stickiness can be measured by the length and/or frequency of website visits, and it is
found to be positively associated with trust, commitment and purchase intentions.41

Furner et al. (2014) applied this concept to a mobile context and introduced the notion
of mobile app stickiness.42 They explored the key behaviors and decision points pertaining to
consumers’ adoption, use and stickiness to mobile apps. Their framework suggests that
mobile app features (e.g., sub-categorized as user interface experience, user experience
consistency, dexterity, focus, and response time) affect perceived interactivity (e.g., control,
two-way communication, and responsiveness), which then impacts stickiness. Similar to
website stickiness, mobile app stickiness has been operationalized as continued patronage and
duration of usage. In addition, they noted three potential outcomes of stickiness: (1) trust in
the provider, (2) the intent to share positive word-of-mouth and (3) conducting commercial
transactions.
Successful Apps are Sticky
Sticky apps that succeed in engaging consumers repeatedly can increase consumers’
loyalty to the firm and, therefore, its revenues. Because of the continuous and immediate
nature of mobile technologies, repeat users have more opportunities to be reminded of the
value that the brand offers.43 Thus, providing a stickier app that encourages adopters to use it
repeatedly and frequently is a key mobile strategy. If consumers find a branded app sticky
because it provides a novel brand experience that has not been possible through other media
channels—or it fulfills consumers’ informational needs (e.g., product reviews, store locations,
and coupons) or entertainment needs (e.g., games and check-ins)—they will continue to use
the app, which in turn leads to an increase in spending.
There are many examples of sticky apps. Apps that provide hedonic benefits such as
games are notoriously addictive. Minecraft, Megapolic, Traffic Racer and 2048 are some of
the most popular apps in this genre, although the Audi A4 Driving Challenge, which allows
iPhone users to steer an A4 sedan through progressively more challenging driving courses, is
an example of an app from a product manufacturer creating hedonic value. Other hedonic
media apps such as Spotify, YouTube, Netflix and Redbox are also popular. Another way to
create value for consumers is by providing social value, and apps such as Facebook and
Snapchat are among the most popular. Apps such as Google Maps or MapQuest and REI’s
snow report and Kraft’s iFood Assistant that provide utilitarian value can also be sticky.
Successful Apps Turn Lukewarm Customers into Habitual Engagers
Apps are potential habit changers, and depending on consumers’ preexisting
relationships with the brands, their adoptions may impose different levels of effect on loyalty.
Wang, et al. (2015) argued that making mobile shopping available to customers can be
viewed as an intervention designed to increase their existing level of interactions. They
further showed that when a branded app facilitates customers’ purchase decisions and buying
routines, customers who have low spending prior to app adoption have a higher percentage
increase in both order size and order rate after app use than those with high spending. In other
words, the magnitude of the effect of an intervention, such as app adoption, on customers
depends on whether they perceive their environment to be relatively stable. If customers
perceive mobile shopping as merely a natural evolution of continuing their relationships with
the brand, they tend to persist in their existing routines. Any increase in spending is therefore
due to the fact that they have more access than before to the brand’s storefront. If, on the
other hand, customers become aware of the way adopting the mobile channel changes their
environment in which they shop, then their existing spending behavior will change.
Wang, et al. (2015) also showed that as consumers increase their mobile shopping
trips, their order frequency and size increase.44 They suggested that apps are ideal for a brand
to form habitual interactions with its consumers because mobile devices themselves are an
integral part of the consumers’ daily lives. These interactions reinforce consumers’
psychological and experiential state of being in a relationship with the firm. Apps therefore
help integrate the brands’ products or services into their routines. This integration is then
reflected in the consumers’ recurring mobile activities, which then lead to repeated purchases
from and interactions with the firm, and then the cycle continues. If consumers engage with a
brand on a habitual basis, they rely on automatic thinking and cease to consider alternative
brands. The brand can therefore grow by potentially increasing share-of-wallets and attracting
consumers away from its competitors. Additionally, habitual behavior is reinforced by
contexts and past performances.45 Thus, the more adept consumers are with interacting with a
brand, the more likely they will continue to do so in the future, and as this cycle ensues,
habits are formed.
Thus, successful, sticky apps are ones that customers can easily adopt but provide
lifestyle-changing conveniences, entertainment, or utility values. As an example, a well-
designed grocery-shopping app that provides interactive maneuverability to browse for items
and simple but useful features that allow a consumer to quickly generate a shopping list and
buy the basket could potentially be sticky. For instance, if a young professional who
commutes to work and typically only has time to shop on the weekends adopts a mobile
shopping app, he/she can now shift their grocery shopping schedules to weekdays while
traveling to work. By providing concrete values to their customers on a daily basis via sticky
apps, brands can then turn their lukewarm customers to habitual engagers.
Apps Reinforce Habitual Brand Engagement, Not Exploratory Learning
The way apps change consumers’ brand engagement and buying habits is partly
attributed to the portability of mobile devices, which provides anytime, anywhere access to
the brand. However, such portability comes with a price. The screens of mobile devices are
limited in size and functionalities. When facing time or resource pressure, consumers tend to
act habitually.46 Thus, given their limitations, mobile channels are convenient when
consumers are reluctant to invest in search costs and simply want to interact or shop
according to their habitual needs.

Wang, et al. (2015) proposed the habitual purchase hypothesis, which posits that
when consumers shop on mobile platforms, they tend to buy products that they have
purchased before or from manufacturers that they are already familiar with. In contrast,
products with long consumption cycles typically impose more risks and thus require more
research, planning or consideration. As such, durables are less frequently purchased on
mobile platforms than habitual products. Because of the limited viewing “real estate,”
searching on apps and mobile browsers requires numerous maneuvers of scrolling and
zooming. Consumers can therefore only retrieve a limited amount of data.47 Even though
consumers are taking advantage of the convenience provided by their mobile devices, high
search costs can negatively affect their cognitive abilities in locating brand information. Thus,
consumers prefer to use PCs for exploratory search and handheld devices for specific tasks.48
Given the current state of their technologies, apps are tools for reinforcing existing
habits, not for learning new information. Wang, et al. (2015) suggested that branded apps
should be used in conjunction with other types of new media to allow for easier searches and
learning. When a firm launches a new brand or product, it should refrain from advertising
solely on mobile platforms, especially if the firm is a secondary player in the market and has
only modest household or market shares in the category. For major brands or firms with a
loyal consumer base, increasing presence through sticky apps or mobile storefronts has the
potential of retaining existing consumers, who rely on their habitual choices or heuristic
brand perceptions when they use mobile devices. Especially for low or occasional spenders,
who have the lowest spending and are the most difficult to retain, successfully branded firms
should take advantage of the mobile channel and emphasize their positive brand image to
these consumers.
Beware of Disengaging Customers with Poorly Designed Branded Apps
Given the potential benefits of branded apps, it may seem obvious that all companies
should have one. Problems arise, however, when companies launch an app that fails to create
value for its users. When consumers go to the trouble of downloading and installing a
branded app and then find that it does not do anything they find valuable, the negative effect
toward the app may carry over to the relationship with the brand itself. Kim, et al. (2015)
found that discontinued use of a brand’s mobile app hurts brand sales. Apps that provide little
utilitarian, social or entertainment value engenders disengagement, which is opposite of
stickiness.
As an example, consider a grocery retailer with only physical stores that launched an
app with limited functionality. It provides a store locator, but do consumers need a separate
app to find stores when they already have a mapping app such as Google Maps, which has
better functionality? The app also gives store hours, but rather than finding and launching the
branded app and then clicking three times to get to the store hours, a consumer is more likely
to simply “speak” to a search engine (“store hours [retailer] [city]”) and have the answer
instantly. The app lists the products carried in the store by category, but it does not offer the
ability to search for items, which is a limitation because the category under which an item is
classified is not always obvious. It also lists which items are on sale each week, which may
provide value to some very loyal shoppers, but most customers are not going to scroll through
long lists of sale items.
The reasons why abandoning an app decreases subsequent spending are not clear. The
decline may be attributable to the negative or dissatisfying experience the customer has after
exploring the app. A survey by TechCrunch showed that more than half of consumers
reported experiencing a problem with apps. Over 60% of these problems included technical
glitches such as apps crashing, freezing, or displaying errors, followed by apps that were not
launching at all or too slowly (47%).49 Following these results, companies should be cautious
about making apps available on the marketplace before their functionalities are fully tested
because faulty apps may be even more than providing no app.
Increasing app recency (i.e., the number of days a customer goes without accessing
the app) indicates an early sign of possible harm and should be monitored as a trigger event,50
which is something that the company can detect, such as app abandonment that portends the
future of the relationship with the customer. When a firm links app abandonment to a decline
in future revenues, there are several possible courses of action. There will be segments of
consumers, some who are likely to be engaged in the app and derive value from it (and whose
future revenues increase due to app use), and others who are likely to become disengaged and
not find value in the app (and whose revenues decrease). One strategy is to employ a more
targeted approach in promoting the app. After segmenting customers or predicting each
customer’s disengagement likelihood, a brand can selectively promote its app to only those
who are likely to be engaged. Another strategy is to improve the app by adding features that
the disengaged segment will value. The company can then use microtargeting to highlight the
relevant features to each segment. For example one segment may find social aspects of an
app valuable, such as checking in and sharing photos, while another segment may value the
utilitarian information provided by the app. The app would emphasize social benefits to one
segment and utilitarian to the other.
In Addition to Sticky Apps, Mobile-Optimized Websites, Software Scalability, and Mobile

Native Advertising Are Important, Too
Besides branded apps, firms should also consider complementary approaches such as
optimizing their websites for mobile devices or making their information easily accessible
through search engines. Since navigation on mobile devices can be cumbersome, consumers
rely heavily on result rankings when performing exploratory searches on their smartphones or
tablets.51 To increase the chances that their brands show up at the top of search results,
advertisers should optimally bid on appropriate keywords. Brands should also ensure that
their websites include all the necessary content to showcase their values or differentiations,
(e.g., quick information on store hours or locations or detailed product specifications), in a
way that can be parsed by search engines without difficulties.
Due to the fact that Internet traffic is increasingly coming from mobile devices as
opposed to PCs, a consumer’s first touch point with a brand may very well be on a mobile
web browser. Successful brands are the ones that are capable of putting the “best face
forward” no matter which device or platform a consumer is using. By streamlining
advertising communications and their presentations across all digital platforms such as PCs,
smartphones, and tablets, firms can avoid putting forth inconsistencies in their messaging and
help consumers develop positive attitudes while learning about their brands.
Technologically speaking, developing and maintaining a website that is equally
usable on a mobile device presents some challenges. Consumers control mobile devices
mostly by touch, but they can more readily rely on external accessories such as mice and
keyboards when operating PCs. Thus, to ensure websites remain capable of providing a fluid
user experience when viewed on mobile devices, brands should carefully design their
interfaces and dialogue box flows. Secondly, mobile screens are smaller, and relative to PCs,
mobile devices may be used under many types of locations or situations. So, if its content is
laid-out inappropriately, a website risks overwhelming consumers’ brand learning abilities or
testing their patience. In addition, typefaces that are designed for screen (e.g., Georgia and
Vernada) may not work well on a mobile website or app. The issue of legibility and
readability should be properly tested before brands put their apps on the marketplace. Third,
mobile plans usually have more stringent limits on data consumption while download speeds
vary by geographic location. Large graphic images and videos that download instantly on a
PC may be an annoyance to a mobile visitor or may not even download. Lastly, mobile
devices have fewer resources such as random access memories (RAMs) and central
processing units (CPUs). Graphics and features that work on PCs may not run on mobile
browsers. As a general rule, firms should begin their website development using mobile-
optimized or hybrid frameworks, design concepts and then translate it for devices with larger
screens, rather than starting off with technologies that are more suitable for building PC-
based software.
There are additional technological issues that advertisers should consider. First, apps
often require updates, and there is often a lag between the update and consumer adoption of it.
Installing updates can burden consumers, and when the updates are frequent, consumers may
decide to skip the update. Thus, consumers may be using obsolete versions. Similarly,
browser compatibility can create problems, especially when consumers do not have the latest
versions of browsers with the latest functionality, possibly because their mobile device will
not support new releases.
Native advertising,52 in the mobile context, refers to the way in which a brand
presents its messages and whether it matches the look-and-feel consumers expect when they
operate a mobile device. This strategy is especially important for brands that utilize cross-
channel advertising, as social expectations of each medium may be different. Native
advertising may also be a useful way to combat advertising tedium and learning costs.
Customers feel more at ease when they encounter an environment that they expect, and
because each channel’s look-and-feel is different, they do not perceive the messages as
repetitive. In terms of actual implementations, advertisers should ensure that a website
remains fluid, fluent and fast when it is accessed via a mobile device instead of a PC, in
addition to making sure the design and flow are in accordance to social expectations.
Furthermore, matching the style of a mobile-optimized website with that of the branded app
helps keep the software cognitively fluent as consumers migrate from one to the other.
Given the additional touch points made available by mobile devices, online traffic
may grow to a point that deteriorates user experience as the brand gains traction. Besides
scaling their software to work across platforms, firms should also ensure that all of their
websites, apps and any other online materials are scalable in user size, so they can provide
seamless access no matter how many consumers may be simultaneously browsing or logged
in.
Overcoming Perceived Security Issues and Privacy Concerns
When users disable cookies on a PC, microtargeting becomes impossible, and when a
consumer opts out of receiving emails, the organization loses the ability to send emails
directly to the consumer—which is usually an inexpensive way to communicate with
customers. Similarly, if a user perceives mobile environments as unsecure, marketers will not
have user data and will be unable to derive benefits of insights and improved targeting.
Mobile customers who feel overwhelmed by marketing messages will find ways to ignore
them. So, the first steps in mobile advertising are to ensure security, earn—and keep—the
consumer’s trust, and ensure that outbound messages sent to consumers provide value.
Consumers do not want to feel stalked by marketers, and they do not want to feel that the
information and data shared with a company will be used to their detriment. The value fusion
concept is important, where both consumers and the organization derive positive value from
the data. There is often a fine line between impressing a consumer with a well-targeted,
personalized message and giving the creepy sense that the consumer’s privacy has been
violated.
Attribution of Mobile Advertising Is Challenging
It is well known that measuring advertising attribution can be difficult. In an
observational, empirical setting, having a randomly assigned control group is often
impractical. Consumers who view or receive information may have different characteristics
from those who do not. As such, comparisons between viewers and non-viewers potentially
suffer from selection bias. Estimates of an advertisement’s impact therefore may be biased by
possible confounding variables that affect both the likelihood of ad exposure and the
consumers’ spending behavior. These challenges usually apply to measuring the effects of
mobile initiatives as well. Propensity scoring models, where matched control individuals are
identified as a basis for comparison, can potentially reduce selection bias and bias from
confounds.53 Other methods involve forming and estimating causal graphical models, which
describe causal links amongst app adoptions, spending behavior and brand affinity using
extant theories and philosophies. Finally, careful experimental designs and estimations can
also help measure mobile attribution.
Another challenge arises from the fact that purchase transaction data may be missing
or unavailable. It is possible that consumers have multiple contact points with a brand over a
mobile device but then make the final purchases on PCs or at brick-and-mortar stores, where
they can anonymously pay with cash. Even when a credit card is used, linking the identity of
the purchaser with mobile exposures can potentially be difficult, especially for firms that lack
the resources to establish practices of database marketing and information management. It
becomes more complicated when sales are transacted at a third-party vendor, such as a
retailer, who captures and owns the transaction data and does not share it with its brand
partners. However, the problem with missing transaction data can potentially be mitigated as
mobile web payment via wireless application protocols (WAP) becomes the norm for both
online and offline purchases. If a consumer’s buying behavior at app stores as well as
everyday goods and services are linked to the same mobile web payment account, brands will
be able to successfully associate app activities with total sales.
Summary
Mobile apps are examples of “non-push marketing contacts”54—consumers decide to
interact with a brand rather than the brand pushing products to consumers. Engaging
consumers via branded apps is a desirable advertising approach because it does not require
buying media, although there can be great cost in developing an app and attracting people to
download it. Traditional promotions and advertising risk engendering negative attitudes from
repetition or wrong messaging, and may also hurt the firm’s profits even though consumers
generate revenues by repeated purchases. In the case of mobile channels, however, if a
branded app succeeds in repeatedly engaging with consumers, it can increase their spending
levels without having to sacrifice profits to maintain consumer relationships.
Given the potential that apps may complement traditional advertising, it is important
to understand their effectiveness and the mechanisms by which they increase loyalty. In this
chapter, we discuss some of the advantages and disadvantages of using mobile apps as an
advertising channel with up-to-date research findings. First, mobile devices themselves are a
game-changing hardware. They are ergonomically very accessible due to their size and
portability, so consumers can easily pull them out and learn about a brand’s offerings on the
go. They are also more connected than PCs and utilize both telecommunication networks
such as 4G LTE and local area wireless technology (Wi-Fi). Second, apps offer a unique
opportunity for advertisers because they can repeatedly remind consumers of the values that
the brand offers. In addition, the habitual use of the app will allow the brand to be integrated
into the consumer’s life and have an amplified voice when combined with other advertising
channels and platforms. The potential of cross-channel advertising can thus be optimized.
Even though apps are a powerful advertising tool, their positive impact on consumer
loyalty and firm revenues is realized only when they are sticky and can satisfy consumers’
needs (e.g., by providing utility or entertainment value). Firms should refrain from launching
poorly designed apps that may in fact lead to brand disengagement and decreased sales.
Branded apps that contain functional flaws or do not showcase their offerings or values
should be reevaluated and repaired before they are released.
Figure 4: Example Showcasing the Increasing Trend of Mobile App and Browser Use
Note. Data from a major U.S. based Internet grocer, July 2011 through June 2013.
These insights have significant managerial relevance. Evident in industry reports and
academic research (e.g., Figure 4), mobile app and browser use is an unstoppable trend as the
world continues to adopt and use smartphones and tablets. Mobile technology’s unique
characteristics provide persuasive effectiveness, which, if leveraged strategically, can lead to
increased brand or storefront accessibility, consumer engagement and firm revenues. In sum,
branded apps have the great potential as a marketing tool, and our aforementioned
recommendations and warnings serve as a practical guide for planning mobile advertising
campaigns.
Conclusion: What Lies Ahead
Channel Attribution
Advertising through multiple channels can generate synergetic effects. However, from
the standpoint of advertising accountability, it poses a challenge in calculating mobile
channel attribution, which stems from the fact that in most empirical settings, not all touch
points can be observed. In a hypothetical situation where consumers learn about a brand and
make subsequent purchases—all with their mobile devices—the mobile channel can be
attributed with 100% of those purchases. In reality, however, consumers most likely engage
with the brand through various touch points and channels to learn about its offerings before
making purchase decisions.55 There is a saying along e-commerce companies that “the last
click wins,” meaning a sale is attributed to the last click. The problem with this is that the
consumer may have visited the company’s website and browsed the item beforehand, had a
virtual experience with the product on a table and seen display ads before finally clicking on
“buy” on some device, and all of the interactions on the different devices influenced the
purchase decision. It is very likely that consumers are susceptible to a brand’s persuasion
through not only their mobile devices, but also other channels like PC websites or even
offline activities such as direct-mailing or television commercials.
Aside from carefully designed field experiments, one other possible solution is to
formulate a model that imputes each consumer’s likelihoods of ad exposure from each
channel of interest. Any attribution calculations of more traditional channels such as PC
Internet or television commercials can also be compared against existing benchmarks, which
in theory, can be derived from performing meta-analyses on extant literature. Mobile
attribution can then be backed out after taking into consideration all possible touch points.
Attribution models in general are challenging, and given the additions of mobile channels,
this area still presents many exciting, on-going research opportunities.
Search Engines Become Personal, Interactive Shoppers in the New Mobile Era
Given the fact that more and more Internet traffic comes from smartphones and
tablets, next-generation search engines should have a mobile strategy. As we alluded earlier,
ergonomically speaking, consumers interact with mobile devices with touch, but they rely on
peripheral devices such as mice and keyboards when using PCs. Recognizing that typing, and
therefore extensive searches, is less convenient on mobile devices, search engines have
started to incorporate and improve predictive keyboard56 or speech recognition in their apps.
As assistive typing and voice search improve, mobile devices will become a better
exploratory learning tool.
Offering innovative features using statistical learning and artificial intelligence can be
a differentiator amongst different search engines. For example, instead of typing, consumers
seeking the store hours or phone number of a retailer can simply verbally ask the search
engine with their smartphone, and ideally the search engine would return the information
without further navigation and maybe even offer additional recommendations or personalized
reminders. Additionally, as mobile wearables such as bands, watches and glasses diffuse in
the marketplace and society, the differences in how consumers interact with mobile devices
vis-à-vis PCs increases and user-friendliness in search functions becomes even more essential.
Recommendation Agents and Combative Search Results
In a hypothetical scenario where consumers were omniscient about brands, search
engines would not exist. Since consumers already had complete information, they would
always optimally choose the best brand for their needs. In reality, consumers utilize search
engines to facilitate their brand learning process. Under this context, a search engine’s value
lies in its abilities to provide new information to its users in an efficient manner. Thus, in
situations where apps successfully communicate the brands’ offerings to consumers—who
then become loyal and are less likely to seek out alternative brands—search engines that
simply output similar information provide only marginal value. In other words, app stickiness
and brand loyalty reduces the necessity and value of search.
To counteract against consumers’ reluctance to learn about or switch to alternative
brands, the next generation of search engines should offer results that are beyond simple
listings or information retrievals. Instead, using innovative recommendation agents and
machine learning techniques, search engines should provide personalized, attractive results.
Going one step further, next generations of search engines could offer combative search
results that compare competing brands side-by-side, lowering brand switching costs and
creating incentives for consumers to break away from their brand habits and learn again.
Overall, the societal consumer welfare increases as consumers become even more informed
about their brand choice sets. Brands in turn, will continue to develop even more beneficial
apps to provide value to their consumers.
Mobile Wearables and Advertising Opportunities
In 2014, major consumer electronics manufacturers began selling and promoting
mobile wearables, which potentially have major implications for advertisers. Unlike typical
fitness gadgets, mobile wearables not only track consumers’ biometrics or health habits, they
also allow users to stay connected to their digital routines such as emails, texting and online
social networking. The combination of the two presents interesting advertising and
relationship management opportunities that can potentially trigger brand engagement by
initiating context-based, offline learning, which apps on smartphones and tablets—not being
wearables—cannot do as easily. For instance, brands can send out messages57 that encourage
in-store visits in accordance to consumers’ health patterns and location schedules (e.g., when
consumers detect that a Facebook fan’s friend often jogs by the store in the morning, or that
today a consumer of a certain product has achieved a fitness goal, an advertiser can offer a
coupon for a related product with a congratulatory message). In short, wearables have the
potential of bringing contextual advertising58 to the physical world. Under these situations,
mobile wearables can attract new customers by enticing them to learn about and extract
values from brands in an optimal, corporeally contextual way. Thus, wearables have the
potential to do more than reinforcing habitual engagement. They can help brands forge new,
personalized, and even offline relationships with consumers.

However, if offline learning does not occur, wearables may not be the ideal platform
for promoting minor brands or complex products that require learning prior to purchase.
Wearables are perhaps the most portable devices when compared to smartphones, tablets and
PCs. However, as the technologies stand now, wearables are still limited by small screens and
imperfect user interfaces (UIs).59 Thus, they are less interactive than smartphones and can be
more difficult to learn from. Furthermore, consumers currently use wearables for maintaining
fitness or staying connected digitally,60 both of which are routine functions. Under these
types of habitual contexts, consumers may not be motivated to learn about new brands or
explore new information. Thus, in cases where learning through offline or other online
channels might not occur, advertising via wearables will be more suitable for consumers that
already know of or have at least some experience with the brands.
Outlook Ahead: Addressing App Discovery and Embracing Programmatic Ad Buys
As of early 2015, there were close to three million apps available on Apple App Store
and Google Play. Even if a brand recognizes the benefits of implementing a mobile program
and launches a well-designed app, one challenge it still faces is getting consumers to find or
search for it in the sea of apps in the first place. Thus, questions remain: If an app is fluid,
fluent, and fast, why does it attract certain types of consumers but not others? What triggers a
consumer to download an app in the first place? What practices can improve app discovery?
Given the way consumers utilize mobile devices and the advances of technology,
consumers only adopt an app and keep using it when they are ready to commit to the brand or
when they predict that they will be able to extract value from the brand more easily if they
have the app installed. Downloading and keeping an app on a personal object such as a
smartphone signifies, “I belong to this brand.” The psychological construct of ownership and
commitment only comes from learning about a brand’s offerings and the ways they fit into
their lifestyles.
In other words, content advertising tools61 that do not provide true value or incentives
to consumers will only have ephemeral effects, at best, regardless of whether they are
delivered via mobile platforms. Consumers only actively engage with a brand when they have
a purpose in mind, and specifically, when they intend to extract value from a brand. For
instance, in the case of a loyalty program, one of the best predictors of when consumers will
log-onto the company’s website or app is when they want to use their loyalty points to
redeem for rewards.
One solution to app discovery is to combine incentivizing content with the practice of
programmatic ad buys. Operationally speaking, a description about the app, including its
capabilities, value proposition, and tie-in with the brand, should be clearly stated and easily
accessible in all of the available communication materials. Access to app downloads through
web browsers needs to be seamless, as well as from other platforms such as Facebook and
Twitter. Findings from extant research on micro-targeting can help define the algorithm that
runs programmatic ad buys.62 For instance, a possible targeting strategy could be to segment
consumers based on their other app downloads, online activities, or even physical locations
throughout the day or week. After calculating consumers’ digital profiles, the algorithm
decides whether they are worth pursuing, and if so, optimally chooses the right message and
timing for the ad that prompts them to download its app.
A possible moderating factor is how well known the brand is. A well-known brand
will face different issues than an unknown startup. The well-known brand is likely to spend
substantial resources on other contact points, which provides a foundation for launching the
app, but also constrains the look and feel of the app so that it is integrated with other brand
messages.
As Technology Evolves, Consumers Learn About and Commit to Brands On-the-Go

Sticky apps can present ample opportunities to grow consumers. In contrast,
disengaging from an app may cause consumers to cease purchasing from the brand. Adding
to the mix is the role of the search engines and the ability to do exploratory search and
learning using mobile devices. Navigating in a changing world filled with branding tools and
evolving technology, advertisers should ground their strategies based on theories in habitual
engagement and consumer learning.
Learning is required to form a purpose or to make purchase decisions, since
consumers need to first understand the value of the brand’s products. However, the amount of
learning required is context dependent, and the process can be shortened or perhaps even
eliminated depending on the brand’s overall image, products’ pricing, consumption cycle,
and many other factors. Since apps are not the optimal way for brand learning given today’s
technology, relying on them alone to form consumer relationships is not ideal. Advertisers
should leverage branded apps only when consumers have also learned through other types of
devices (e.g., PCs) or channels (e.g., television commercials and print media).
However, in the continuously evolving world of advertising, our society’s digital
behavior and use patterns are changing as we speak. Products like Google’s Glass, Sony’s
Morpheus virtual reality helmet, and Microsoft’s HoloLens can fundamentally alter the ways
consumers engage with software associated with a brand. In the near future, these three-
dimensional, holographic technologies can potentially replace all other devices or channels,
perhaps even offline learning, that consumers still need today for brand learning. By
leveraging the newest technologies to their fullest and reducing consumers’ search costs and
potential post-purchase regret, advertisers can put forth the most sensual, interactive and
persuasive messages possible to shorten the time and steps required between learning and
buying. Given the technological landscape today and in the near future, and by advertising
via apps and mobile platforms, brands should be able to maintain healthy relationships with
their consumers, encouraging them to learn about their offerings and make purchase
decisions on-the-go.
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Author Biographies
Rebecca is a Ph.D. candidate at Kellogg School of Management and a research fellow at the
Spiegel Research Center at Medill. Her research includes mobile marketing, retail
strategy, customer relationship management, and empirical data analysis, and has been
published in Journal of Retailing and Journal of Interactive Marketing. Prior to her studies at
Northwestern University, Rebecca worked as a consultant for Monitor Group in Cambridge,

Mass. She also worked as a data engineer at a healthcare software-as-a-service start-
up. Rebecca holds a MEM (Master of Engineering Management) and an AB/BE in Electrical
Engineering from Dartmouth College in Hanover, NH.
Su Jung Kim (Ph.D., Northwestern University) is an assistant professor in the Greenlee
School of Journalism and Communication at Iowa State University. Her research centers on
the use of big data in communication, advertising, and marketing. Her research interests
include cross-platform media use and its effects, social media and electronic word-of-mouth
(e-WOM), mobile customer engagement, and communication strategies in digital media.
Edward C. Malthouse is the Theodore R and Annie Laurie Sills Professor of Integrated
Marketing Communications and Industrial Engineering at Northwestern University and the
Research Director for the Spiegel Center for Digital and Database Marketing. He was the co-
editor of the Journal of Interactive Marketing between 2005-2011. He earned his PhD in 1995
in computational statistics from Northwestern University. His research interests center on
engagement, new media, customer lifetime value models, and predictive analytics.
End Notes

1
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2
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3
A healthy software development ecosystem refers to the fact that mobile frameworks such
as iOS and Android are readily available for developers to write and release apps agilely and
efficiently, and in turn, Apple and Google make improvements on those frameworks, and the
cycle continues. This cyclical process leads to many app developments, which contrast with
earlier smartphone systems such as Blackberries that did not have publically available app
stores, open API frameworks, or programming tutorials and documentations, and therefore
did not lead to mass app adoptions. In 2007, former Apple CEO Steve Jobs referred to
iPhones as a “game changer.” Here we note that it is a game changer not just because of the
hardware, but also because of the surrounding business and development infrastructures that
provide a healthy ecosystem.


4
Zoe Fox, Sep 19, 2013, "Global App Downloads to Pass 100 Billion This Year,"
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photo.
5
Andrew Lipsman, "Major mobile milestones in May: Apps now drive half of all time spent
on digital," June 25, 2014.
6
We adopt the definition of branded apps in Steven Bellman, Robert F. Potter, Shiree
Treleaven-Hassard, Jennifer A. Robinson, and Duane Varan," The effectiveness of branded
mobile phone apps," Journal of Interactive Marketing, 25, 4 (2011): 191-200. They define
branded apps as “software downloadable to a mobile device which prominently displays a
brand identity, often via the name of the app and the appearance of a brand logo or icon,
throughout the user experience” (p. 191). Thus, branded apps help a brand showcase its
products and services. Examples include 1) functional apps such as Amazon storefront app,
which allows consumers to shop or place orders, 2) experiential apps such as CBS video app,
which lets its viewers watch news and television episodes or participate in social forums, and
3) a hybrid apps such as Nike fitness app, which promotes its sporting goods alongside
healthy habits. Branded apps are almost always free to download and use. They contrast with
paid apps, which are products in themselves. Branded apps also differ from free apps that
earn revenues solely from online advertising, e.g., weather report apps; however, many of our
insights still apply to the latter.
7
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events/press-releases/2012/mobile-marketing-on-track-for-rapid-adoption-in-2012.
8
Dave Hosh, "App retention improves - Apps used only once declines to 20%," June 11,
2014. http://info.localytics.com/blog/app-retention-improves.
9
Sarah Perez, "Users Have Low Tolerance For Buggy Apps – Only 16% Will Try A Failing
App More Than Twice," March 12, 2013. http://techcrunch.com/2013/03/12/users-have-low-
tolerance-for-buggy-apps-only-16-will-try-a-failing-app-more-than-
twice/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch
+%28TechCrunch%29.
10
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11
Venkatesh Shankar and Sridhar Balasubramanian, "Mobile marketing: A synthesis and
prognosis," Journal of Interactive Marketing 23, 2 (2009): 118-129. doi:
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Kaan Varnali and Ayşegül Toker, "Mobile marketing research: The-state-of-the-art."
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12
Jennifer Taylor, Rachel Kennedy, Colin McDonald, Laurent Larguinat, Yassine El
Ouarzazi, and Nassim Haddad, "Is the multi-platform whole more powerful than its separate
parts? Measuring the sales effects of cross-media advertising," Journal of Advertising
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13
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An assessment of progress, challenges, and new developments," Marketing Science 32, 6
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14
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15
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of Advertising 33, 2 (2004): 75-84. doi: 10.1080/00913367.2004.10639161.
16
Kumar and Venkatesan (2005); Neslin and Shankar (2009).
17
Prasad A. Naik and Kalyan Raman, "Understanding the impact of synergy in multimedia
communications," Journal of Marketing Research 40, 4 (2003): 375-388. doi:
10.1509/jmkr.40.4.375.19385.
18
Byron Sharp Virginia Beal, and Martin Collins, "Television: Back to the future," Journal of
Advertising Research 49, 2 (2009): 211-219.
19
Taylor et al. (2013).
20
Amna Kirmani, "Advertising repetition as a signal of quality: If it's advertised so much,
something must be wrong," Journal of Advertising 26,3 (1997):77-86.
21
Hilde A. M. Voorveld and Sanne M. F. Valkenburg, "The fit factor: The role of fit between
ads in understanding cross-media synergy," Journal of Advertising (in press): 1-11. doi:
10.1080/00913367.2014.977472.
22
Duane Varan, Jamie Murphy, Charles F. Hofacker, Jennifer A. Robinson, Robert F. Potter,
and Steven Bellman, "What works best when combining television sets, PCs, tablets, or
mobile phones? How synergies across devices result from cross-device effects and cross-
format synergies," Journal of Advertising Research 53, 2 (2013): 212-220. doi: 10.2501/JAR-
53-2-212-220.
23
Rebecca Jen-Hui Wang, Edward C. Malthouse, and Lakshman Krishnamurthi, "On the Go:
How mobile shopping affects customer purchase behavior," Journal of Retailing (2015). doi:
http://dx.doi.org/10.1016/j.jretai.2015.01.002.
24
Shintaro Okazaki and Felipe Mendez, "Perceived ubiquity in mobile services," Journal of
Interactive Marketing 27,2 (2013): 98-111. doi:
http://dx.doi.org/10.1016/j.intmar.2012.10.001.
25
Shankar and Balasubramanian (2009); Okazaki and Mendez (2013); Bart Lariviere, Herm
Joosten, Edward C. Malthouse, Marcel Van Birgelen, Pelin Aksoy, Werner H Kunz, and
Ming-Hui Huang, "Value fusion: the blending of consumer and firm value in the distinct
context of mobile technologies and social media," Journal of Service Management 24, 3
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Generally speaking, native advertising refers to the way messages are framed or designed
according to the environment in which they are embedded. For instance, advertorials can be
construed as a form of native ads, because they are written in a style that mimics editorial
articles.
53
For example, see Wang, Malthouse and Krishnamurthi (2015) and Kim, Wang and
Malthouse (2015).
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56
This feature reduces the amount of typing necessary by suggesting words or phrases for
users to choose from as they type, so they can input the rest of the texts with just a click or a
touch.


57
Conditional on a consumer’s prior consent with service providers such as fitness tracking
or social network firms. Detailed discussions regarding Internet security or privacy concerns
are outside of this chapter’s scope. Extant research shows that consumers are more likely to
opt-in permission-based location-aware mobile advertising if it is “entertaining, informative,
not irritating, and includes some incentives” (Richard and Meuli 2013, p. 698).
58
Conventionally refers to online advertising practices where ad content is generated in real-
time according to consumers’ browser activities.
59
In addition to touch navigations, mobile wearables may contain other types of UI
technologies such as speech, eye movement, hand gestures, or 3-D holographs. Whether the
various UI technologies can efficiently facilitate easy and enjoyable human-machine
interaction is critical, for it can influence consumers’ brand learning abilities while operating
these devices. Successfully implemented UIs also allow consumers to utilize mobile devices’
functionalities in a maximal capacity, which in turn helps diffuse the adoption and use of
these devices or integrate them into consumers’ daily routines.
60
Wearables’ use patterns contrast with those of smartphones when the latter were adopted
by the masses. Due to their size and touchscreen UI, smartphones were a drastic improvement
in both portability and ergonomics over PCs. Smartphones also provided functionalities that
were unavailable on PCs, such as telecommunication connectivity, global positioning system
(GPS), and interactive games and entertainment via multi-touch. In contrast, the difference in
portability between wearables and smartphones is much less. Fitness tracking aside, the
functionalities between wearables and smartphones are also similar. In fact, as of 2015,
wearables such as Apple Watch or Microsoft Band rely on being paired to smartphones for
them to be fully utilized.
61
As we discussed in section Summary, tools such as branded apps “pull” in consumers
instead of “pushing” messages. Some existing content advertising and marketing practices
include providing knowledge on brand websites (e.g., Krafts Foods offers recipes) or
encouraging word-of-mouth on social media (e.g., United Nations releases videos featuring
celebrities to advocate for women’s rights on YouTube), to name a few.
62
Sivadas, Eugene, Rajdeep Grewal, and James Kellaris. "The internet as a micro marketing
tool: targeting consumers through preferences revealed in music newsgroup usage." Journal
of Business Research 41, no. 3 (1998): 179-186. Jiang, Tianyi, and Alexander Tuzhilin.
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Fernández, Yolanda, Martín López-Nores, José J. Pazos-Arias, and Jorge García-Duque. "An
improvement for semantics-based recommender systems grounded on attaching temporal
information to ontologies and user profiles." Engineering Applications of Artificial
Intelligence 24, no. 8 (2011): 1385-1397.
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Branded Apps and Mobile Platforms as New

Chapter · January 2016

Rebecca Jen-Hui Wang Su Jung Kim

SEE PROFILE SEE PROFILE

Branded Apps and Mobile Platforms as New Tools for Advertising

By Becky Wang, Su Jung Kim and Edward C Malthouse

implications that offer managerial recommendations that allow advertisers to strategically

Habitual engagement; Relationship management; Native advertising; App discovery; Mobile

platforms; Smartphones; Tablets; Wearables

Ever since the introduction of multi-touchscreen smartphones in 2007, consumers

prospective or existing customers to perform an array of tasks such as searching, retrieving,

properly during the first try.9

mobile commerce as the ability to utilize networked technologies and communicate

by neither time nor location.

Mobile Platforms and New Advertising

When a firm places an advertisement, it seeks to provide information to potential or

advertisers to generate cross-channel synergy alongside other advertising media such as PC

Internet, search engine results and personalized emails.

consumption habits or reinforce existing engagement behavior.

pertaining to advertising strategies using mobile platforms—particularly as a contact point for

conclude with recommendations to advertising students and practitioners.

The Synergetic Role of Mobile Apps in Cross-Channel Advertising

campaigns. Research on Internet advertising shows that by exposing customers to marketing

superimposed on video channels on a mobile phone) did.

offline or conventional PC-Internet channel. Their enhanced digital mobility allows

Figure 1: Example Showcasing the Importance of Multi-Channel Engagement: Customer

Average Order Sales (Dollars) Average Interpurchase Time (Days)

All PC Tablet PC Tablet All PC PC

through June 2013.

Mobile Devices Are Ubiquitous

The most frequently mentioned characteristic of mobile technology is (perceived)

a person “to be everywhere at once” or be “seen or encountered everywhere.” According to

conceptualizations in extant research, ubiquity is a multidimensional concept that includes

Mobile Devices Provide Utility and Entertainment

customers as the first step to build a long-term relationship.

successfully extract utility or gratifications by using it. Technological acceptance model

services is a function of perceived usefulness, perceived ease of use, perceived

expressiveness and perceived enjoyment.30 In sum, people aim to seek informational,

Persuasive Effects of Adopting an App on Brand Choice and Spending

lifetime value compared to existing marketing channels.32

through Feb. 2013.

Apps Offer Rich User Experience and Interactive Features

The persuasive effectiveness of branded apps is attributable to the rich user

animations, in addition to novelty, motivation, control, customization and feedback. Unlike

Kiousis (2002) provided a comprehensive review of interactivity.37 According to him,

interactivity refers to:

The degree to which a communication technology can create a mediated environment

in which participants can communicate (one-to-one, one-to-many, and many-to-many),

both synchronously and asynchronously, and participate in reciprocal message

exchanges (third-order dependency). For human users, it additionally refers to the

ability to perceive the experience as a simulation of interpersonal communication and

increase their awareness of telepresence. (372)

Kiousis’ definition suggests that interactivity has three dimensions: technological

setting characteristics (the interconnected relationships among exchanged messages), and

perceptions of audience members (e.g., perceived speed, proximity, and telepresence).

Interactivity can be an important feature in ad messages. When delivered with interactive

lead to consumer retention, positive attitudes, and increased sales.

Literature also differentiates interactivity into machine and person interactivity.38 In a

interactivity on consumers’ perception, attitudes and financial performance.39

Persuasive Effects of Adopting an App’s Interactive Features

Interactivity can be attributable to an app’s ability to provide personalized or location-

Figure 3: Example of Interactive Features of a Branded App

a) Personalized Information (fig3a.png)