Tuesday, September 18, 2012

Study Suggests Mobile Apps More Effective than TV Ad Campaigns in Brand Marketing

research project carried out by MIT Center for Digital Business in conjunction with a large insurance company  demonstrated that  mobile applications can be more effective in increasing trust and purchasing consideration than a TV or print advertising campaigns. 

In the study, which was carried out under the supervision of Professor Glen Urban, the insurance company developed an engaging mobile application which allowed people to keep track of their goods and valuables while they were moving. The application depicts a virtual "safe" which was a clever way to associate the brand name with the notion of safety and trust. 

This virtual safe on the smartphone can be used to create an inventory of valuable items during a move. The users could take and store photographs of the Items in the "safe", include their price and categorize them for better organization. 

There was also a "Box X-Ray" feature - which made it possible for the user to label a moving box and its location, and include an inventory of its contents. The Application was flexible enough to allow users to "view" the items in a box on his phone, look at  total item summary or search for an item by name and find out which box it was packed in. 

Even though there was no direct advertising, the Insurance company's branding was included through out the mobile application. Both the safe and box x-ray were named with Insurance Company name, and logo. The only place where any kind of direct advertising was included was in the "About Us" section of the mobile application which briefly explains how the Insurance Company can help protect customers' valuables both during and after a move and gives mobile applications users the option to "Find out more" and "Locate an agent." 

 A group of volunteers was chosen and randomly divided into three categories. One group was exposed to the Mobile application and while another group was exposed to TV and Print Advertising Campaigns. The 3rd group was used as a control group and was to go through a unrelated insurance shopping website. 

Participants in all the test groups were given pre and post test questionnaires to measure the effectiveness of each source of branding. The questionnaires asked the participants whether or not they will  to consider the insurance company for their insurance needs as well as assign a point score compared to its competing insurance providers. 

The survey takers who were exposed to the mobile application were also given specific tasks which simulated an actual move through an extension to the App.  These tasks included insertion, organization and retrieval of items information into the mobile application as the user would do during actual packing and unpacking of boxes. 

TV Ad Campaign,  and television advertisement camp aign representing their brand.while other was Both groups were surveyed before and after exposing them for measuring their trust in the brand and purchasing consideration (i.e. likelihood of considering that brand for their insurance needs) sought to measure the effectiveness of both in increasing trust in their brand by surveys 

The test results were amazing. Even though both types of engagement - passive engagement via TV and print media and active engagement via the Mobile application sources increased test groups' familiarity and consideration of the Insurance Company X , by 25%, the likelihood of purchase increased significantly on not only home or renter's insurance from the subject insurance company, but also for all other types of insurance including auto insurance. It also increased the likelihood of the participant seeking information about additional insurance products.

What was even more interesting was that in the part of the survey where participants had to allocate points to various insurance companies based on which companies they would prefer the next time they need insurance, from a fixed quote of 100 points, participants who were engaged via the mobile application overwhelmingly assigned higher points the subject insurance company, averaging a 84% point gain as compared to the control group. The results displayed a significant point drop for all competing insurance companies. 

The study concluded that engaging customers via the mobile application increased the likelihood of brand consideration by 60% more than the passive TV and print advertisements. The mobile application was more effective at making customers feel that the subject Insurance Company worked hard to meet their changing needs, was worthy of recommendation to friends, and would secure customers against all kinds of risks. The mobile application was not only more effective than television advertisements in increasing points allocation, it was also able to steal points in the competitive point allocations from Insurance Company's two main competitors where TV advertisements were not. 

New research by Plastic Mobile, in partnership with Luxury Institute, has shown that mobile apps can make consumers more loyal to a brand – specifically, 71% of people who have downloaded a sponsored app for their tablet or smartphone said that the app made them feel “better connected” to that app’s brand sponsor.

In addition, the study also showed that 64% of the app-using population took a more favorable view of brands that have mobile apps, regardless of whether or not that brand sold its merchandise through e-commerce sites, mobile commerce sites, or exclusively offline, in brick-and-mortar stores.

The majority of the app users indicated that their purpose for using the apps they downloaded was to find information – features and specifications, prices, and specials deals – on the products and services available for that specific brand. Nearly half of the users indicated that they expected their downloaded app to give product previews and present loyalty programs.

Interestingly, the studies also found that the app users considered their apps to be more of an enhancement, not a replacement, for the live retail experience. In fact, 45% of the respondents said they liked having salespeople assist them with their purchase.

In other words, the main purpose of these apps, apparently (as far as the buyers were concerned), was not to push or close online sales but to highlight the personal service that a brand is willing to provide to its customers, whether in an online boutique or a physical store. This display of commitment towards quality customer service naturally results in buyers more willing to stand by their chosen brands.

Yash Talreja

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