Mobile Advertising in the Form of SMS – Status and Potentials in Bangladesh

MOBILE ADVERTISING IN THE FORM OF SMS – STATUS AND POTEN- TIALS IN BANGLADESH Farooq Hossan* Mahmuda Akter** Laboni Ferdous*** ABSTRACT

Mobile ad is a marketing technique in which marketers try to encourage customers to buy products and services through generating and launching advertisement with the help of mobile phone. Among various types of mobile ad SMS ad is relatively low cost and cost effective. The study aims at measuring the potentials of SMS ad in Bangladesh. To finalize the paper both primary and secondary data are collected and used. The study reveals that responses to SMS ad contain any product or services are very much positive. Mobile phone users give importance to SMS advertising. Most of the mobile phone users have willingness to pay attention to SMS ad specially if the ad is related to profession or need. Mobile phone users also provide their affirmative position in the question of information passing to others and registration option offered by the mobile phone operator for receiving a category SMS ad. All these indicate a prospective future of SMS ad in Bangladesh. This paper presents the status and potentials of SMS advertising in Bangladesh. The paper is exploratory in nature.

Key Words: Advertising, Mobile advertising, SMS advertising, campaign, two-way communication, Media.

1. INTRODUCTION

A mobile ad is a type of campaign that uses mobile phones to generate ad. Through sending ad to the users of mobile phones, a company can reach millions of people effectively. Advertising through mobile phone is a rapidly growing sector providing brands, agencies and marketers the opportunities to connect the consumers beyond traditional and digital media directly on their mobile phone. SMS advertising is one of the different methods of mobile advertising. SMS advertising campaigns are relatively cheap and cost-effective.1, 2 SMS advertising is growing globally, and the indications are that the trend will continue well in the future. It presents actual and relevant content based on target profiles. The latest information is inserted in every delivery attempt in SMS advertising. Our research questions are about different methods of mobile advertising and the scope of mobile advertising.

*Assistant Professor, Department of Marketing, Hamdard University Bangladesh, Monshigonj and PhD student at the University of Dhaka. **Lecturer, Department of Finance, Hamdard University Bangladesh, Monshigonj. ***Assistant Professor, Department of Business Administration, World University of Bangladesh, Dhaka.

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In the context of Bangladesh, mobile advertising in the form of SMS is developing. It offers various opportunities for the marketer. In near future, it is expected to gain more acceptability and popularity. Already some leading companies have started using mobile advertising in Bangladesh. So, this is time to conduct the research on such issue to understand mobile advertising and to disseminate the knowledge gained from findings. This study is conducted to (i) investigate the methods of mobile advertising and (ii) find out the views of the mobile phone users toward mobile advertising.

2. IMPORTANCE OF THE STUDY

Mobile ad can provide assistance to consumers to assess swiftly regarding the information they need to make a decision and also make them determined to buy products and services. On the other hand, today advertisers have a window of opportunity to think about the contribution of mobile ad to their businesses. By taking help from mobile company, businesses can transform their relationships with their customers. At this time without question, mobile ad can play an essential role in driving significant and incremental revenue to businesses.

The explosive growth of wireless as a communication medium offering new advertising opportunities and the study of advertising through mobile phone and status and potentials in Bangladesh is interesting. It will help researchers to understand the contribution of a new information technology for doing business. In Bangladesh, SMS advertising is making the position in the market though it is in the initial stage.

Mobile operators are offering SMS advertising to business communities, professionals and government. This is the right time to know the status and measure the potentialities of SMS advertising in Bangladesh. This study will obvi- ously help the stakeholders, – mobile operators, advertisers and customers – of mobile advertising.

3. LITERATRURE REVIEW

Advertising is a form of communication which is used to encourage and persuade consumers to take an action. Philip Kotler [et.al (2010)] define advertising as any paid form of non-personal presentation and promotion of ideas, goods or services by any identified sponsor.3 Advertising can be used to build up a long-term image of a product or trigger quick sales. Advertising can efficiently reach to geographically dispersed buyers.4 The proliferation of smartphone devices and

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tablets are shifting the ways that marketers look at mobile advertising, making the channel more important to the multichannel strategy.5 Mobile advertising becomes an increasingly important element in the marketing mix. De Reyck and Degraeve (2003) define mobile advertising as, “targeting well-identified potential customers with text messages, thereby increasing the response-to-advertisement ratio”.6 Also, it can be defined as, “the business of encouraging people to buy products and services using the mobile channel as a medium to deliver the advertising message”.7 Mobile advertising can also be defined as any paid message communicated by mobile with the aim to influence the attitudes and behavior of those addressed by the commercial messages.

Mobile advertising has proven to be more efficient than internet advertising. Unlike personal computers (PCs), mobile devices typically are not shared among people, which allows for precise targeting of advertising to a single person.8 This unremarkable two-way communications caught the attention of business industry and advertisers as well as cell phone producers and telecom operators. Eventually SMS became a new medium – called the seventh mass media channel by several media and mobile experts, even more it is a two-way mobile media, as opposed to one-way immobile media like radio, newspapers and TV. Thus mobile advertising is much more interactive and personal than traditional advertising.9 Besides the immediacy of responsiveness in this two-way media is a new territory found for media industry and advertisers, who are eager to measure up market response immediately.

Using cell phone to spread advertisements to users is a crucial part of the marketing industry. With the introduction of the cell phone, marketers found that users could be reached quickly. Specifically, mobile ads are difficult for users to avoid and the users usually read many ads. Evelyne Beatrix Cleff (2007) explains that mobile advertising is inexpensive and novel, and can be highly targeted towards a certain individual.10

The potential of mobile devices as direct marketing tools has not gone unnoticed and advertisers have realized the opportunity to use the mobile channel to ‘text’ information to targeted consumers. Unlike traditional print, TV, or even email advertising, companies can now reach specific consumers groups or even individuals, virtually anywhere, anytime, and based on the physical location of the mobile users. Many companies rely now on mobile phone ad to spread the news about a product or service to the target market. The mobile phone is an extremely personal device. One mobile phone typically has one unique user. This makes the mobile phone a precisely targeted communication channel, where users are highly engaged with content. As a result, the mobile channel delivers excellent campaign effectiveness and response levels compared to other media.11 81 Page Green University Review of Social Sciences, Volume 02, Issue 01, June-2015

5. METHODOLOGY

5.1. Population, sample size and sampling technique The population of this research is comprised of the mobile phone users of various professionals. For this survey the researchers select 600 samples which are random- ly selected from the six different types of profession or user groups. Selected user groups are teachers (100 persons), engineers and architects (100 persons), pharma- cists and doctors (100 persons), advocates (100 persons), general service holders (100 persons) and students (100 persons). These groups are chosen based on their using rate of mobile phone and involvement of type of professions for more repre- sentation.

5.2. Data needed and sources of data Both primary and secondary data are collected for this study. To complete the research initially the researchers have started their investigation by examining secondary data to gain facts on mobile advertising. Secondary data are collected through the study of thesis and journals of mobile advertising, mobile phone user guide and Internet. Primary data are gathered through conducting formal interview from the targeted respondents.

5.3. Contact method From the different methods personal interview is employed for this study in which researchers face the interviewees in their residents, offices and also at mall-inter- cepts. Before taking final interview a number of filter questions are asked to identify the appropriate interviewees.

5.4. Designing research questionnaire To collect primary data a structured questionnaire is designed consisted of three parts. The first part is introduction and explanation of the purposes for the survey. In the second part, questions are designed to elicit the respondents’ demographic data, such as gender, education, job or profession, and income. The third part includes statements to collect data regarding consumer attitudes toward SMS advertising. Respondents are asked to indicate their degree of agreement with statements. The questionnaire is pretested on 10 individuals, and is revised on the basis of their feedback. Question selection is based on the present SMS advertisement status and potentials.

5.5. Data Analysis Data are analyzed by employing verbal analytical model to draw results of the study. In a verbal model, the variables and their relationships are stated in prose form.12 Also graphical model is used in the study. A graphical model is visual and is

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used to isolate variables and to suggest directions of relationship but is not designed to provide numerical results [12].

6. MOBILE ADVERTISING METHOD

There are three existing mobile advertising methods discussed below: 1. SMS: Mobile advertising began with SMS advertising.13 SMS typically contains one or more commercial offers or ads that invite users to subscribe or purchase products and services. It is one of most common way of mobile advertising. It often contains textual Ads to promote products and services. Receiving SMS is free for users. Mobile SMS, one of the world’s most popular message services, is so far the most common mobile advertising for enterprises. However, due to infrastructure limitations, it does not support customized mobile ads per individual. Thus, many users treat these SMS as spam. As indicated by Giuffrida et al. (2008), even though the mobile advertising makes a substantial improvement in overall business perfor- mance by targeting users with most relevant offers based on user purchase histories, the hard limit imposed by the carrier forces them to target clusters of consumers and send to all users in a cluster.14

2. Applets: Mobile ads embedded in applets are contextual ads that are set pop-up when users are using the applets.

3. Browser: The browser is a particular applet for retrieving, presenting, and traversing information resource on the World Wide Web (WWW). Mobile ads showed in browser are more similar contextual advertising on the web. Both applets and browsers require data transmission through the internet. This leads to addition- al payment of internet charges to users.

This paper intends to focus on SMS advertising. Through this study the researchers try to understand the present status and find the potentiality of SMS advertising in Bangladesh.

6.1 FEEDBACK FROM THE SURVEY

In a primary survey with a structured questionnaire, it is found that mobile phone users are very much willing to receive SMS in his or her mobile phone. Since all mobile phones can receive SMS and people hold their mobile devices whole the day, SMS advertising can reach them approximately anytime and anywhere.15 The survey questionnaire contains six questions for the mobile phone users to identify their response, willingness, attraction, attention and awareness for the SMS advertising. Findings of this survey are presented below:

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Responses to SMS Contain Advertising of Any Product or Service

Interactive communication and quick response to SMS ads is viable16 17 thus marketers can gather campaign results quickly.18

58.96 percent of the total surveyed mobile phone users answer “yes, regularly” about responses to SMS contains ad of any product or service. Most of them say that SMS (about different government information, some products like furniture, electronic items, some real estate products and some other mobile phone functional products like ring tone, games, wallpapers, caller tunes) is received by them. 36.21 percent receives that type of SMS but not regular. 4.83 percent is confused because they are not very attentive or interested about the advertisement through SMS. So, it is sure that already it is experienced about the SMS advertising but the SMS is not organized according to its potential clients.

Table 1: Distribution of responses by present SMS advertising receives status

Variable Number Percent Yes, regularly 342 58.96 Yes, not regularly 210 36.21 No, never 0 0 No, confused 28 4.83 Total 58 0 100

0%5%

36% Yes,regularly Yes, not regularly No, never 59% No, confused Figure 1: Receiving SMS ad

Willingness to Pay Attention to SMS Advertising

SMS advertising campaigns can achieve high level of attention, in that mobile users usually don’t delete short messages unless they open and read at least some parts of messages.19 71.70 percent of the surveyed mobile phone users answer positively about their willingness to pay attention to SMS advertising. Within this 29.10 percent is very attentive and 42.60 percent is attentive but not regularly. They do not feel this type of SMS is annoying. Mobile phone users are not very attentive to SMS

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ad when advertised products or services are not connected with their profession or does not fill their need. 27.70 percent mobile phone users feel this type of SMS is annoying for them. Therefore, if advertisers send SMS through the mobile phone with fulfilling the professional or regular needs, this is sure that the maximum (71.70 percent) will pay attention on the advertisement.

Table 2: Distribution of responses to pay attention to present SMS advertising

Variable Number Percent Yes, regularly 169 29.10 Yes, not regularly 247 42.60 No, never 161 27.70 No, confused 3 0.60 Total 5 8 0 100.00

0 .6 0 % 2 7.70 % 2 9 .10 %

Yes, regularly Yes,not regularly No,never No,confused

4 2 .6 0 % Figure: 2 (a)

50.00% 40.00% Yes, regularly 30.00% Yes, not regularly No, Never 20.00% No, confused 10.00% 0.00% Percentage Figure: 2 (b)

Figure 2 (a, b): Willingness to pay attention to present SMS advertising

Focusing Importance to SMS Advertising:

64.14 percent of the surveyed mobile phone users positively answer about their feelings of significance to present SMS advertisement. 22.07 percent mobile phone users give much importance and 42.07 percent give weight but not regularly to present advertisement. 27.93 percent mobile phone users feel this type of SMS is

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annoying for them and they never give significance to SMS.

Table 3: Distribution of responses by feeling importance of present SMS advertising Variable Number Percent Yes, regularly 128 22.07 Yes, not regularly 244 42.07 No, never 162 27.93 No, confused 46 7.93 Total 580 100.00

7.93% 22.07%

27.93% Yes, regularly 42.07% Yes,not regularly No,never No,confused

Figure 3: Importance of SMS ad to respondents

Receiving SMS Advertising Related to Profession or Need

81.56 percent of the surveyed mobile phone users are interested to receive any type of SMS advertising in their mobile phones which is related to their professions or need. They think it will be helpful for them and this SMS advertising will keep them update about the products. The professionals are very much interested about the products or service information which is related to their professions. For example, an architect is much interested about real estate products, building materials and technological items. General people are also interested about the products or services information which fulfills their daily need. A general employee is interested about home appliances like television, DVD player, refrigerator, digital camera, mobile phone, furniture etc. Among the surveyed conducted 17.06 percent are also interested about the option but they are not feeling safe about their privacy and are worried about it. Only 1.38 percent respondents are not interested in such SMS advertising.

Table 4: Receiving SMS advertising related with professional or regular need Variable Number Percent Yes, regularly 473 81.56 Yes, not regularly 99 17.06 No, never 8 1.38 No, confused 0 0 Total 580 100.00

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1.38% 0.00%

17.06%

Yes,regularly Yes, not regularly No,never 81.56% No,confused

Figure 4 (a)

500 400

300 Yes, regularly Yes, not regularly 200 No, Never No, confused 100 0 Number

Figure 4 (b) Figure 4 (a, b): Receiving SMS ad related with profession or need

Information Passing to Others

32.76 percent of the surveyed mobile phone users pass the received information if they feel it is lucrative. 20.69 percent replies “Yes, but not regularly” because they are not confirmed about this. 66.20 percent interviewees never pass information to others about the SMS advertising because they have no interest about this. Some people (1.04 percent) are confused on this issue.

Table 5: Passing information to others about the SMS advertising Variable Number Percent Yes, regularly 70 12.07 Yes, but not regularly 120 20.69 No, never 384 66.20 No, confused 6 1.04 Total 580 100.00

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1.0 4 %12 .0 7 %

Yes,regularly Yes,not regularly No,never No,confused 2 0 .6 9 % 6 6 .2 0 %

Figure 5: Passing information to others received by SMS ad

Registration Option Offered by the Mobile Phone Operator for Receiving a Cate- gory SMS Advertising:

37.07 percent of surveyed mobile phone users are willing to register to receive categorized SMS advertising and 37.93 percent. So, 75 percent of the surveyed mobile phone users are positive to be registered. 17.07 percent is not interested to register but most of them are interested to receive categorized SMS advertising. 7.93 percent is confused about this.

Table 6: Willingness of registration to receive advertising through SMS Variable Number Percent Yes, regularly 215 37.07 Yes, not regularly 220 37.93 No, never 99 17.07 No, confused 46 7.93 Total 580 100.00

8 % 17 % Yes,regularly 3 7 % Yes,not regularly 3 8 % No,never No,confused

Figure 6 (a)

250.00 215 220 200.00

150.00 99 P ercent% 100.00 46 Number 50.00 37.07 37.93 17.07 7.93 0.00 Yes, regularly Yes, not regularly No, never No, confused Figure 6 (b) Figure 6 (a, b): Willingness to register to receive category SMS ad

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7. CONCLUSION

After the survey, we have found that there are three types of mobile advertising namely SMS, Applets and Browser. Mobile is a medium for two-way communication which has excess advantages for the advertisers over other media to advertise products and services. Now SMS becomes a new medium of advertising for products of the business organization. SMS is called the seventh mass media channel by several media and mobile experts. SMS ad is very much cost-effective to the advertisers which attract the business people to advertise their brands and products by this device. Such ad allows the advertisers for precise targeting that leads more effective advertising.

Marketers can reach quickly to potential customers through SMS ad and it is challanging for the mobile phone users to avoid SMS ad. The study reveals that mobile phone users are responsive to SMS ad that conveys the information of any product or service related to their needs. SMS ad, which satisfies the professional needs that can draw the attention of mobile phone users. Users of mobile phone give the importance to the SMS ad. Some mobile phone users pass information to others that they get from SMS ad if it is lucrative. For receiving category SMS ad most of the mobile phone users are keen to register with operators.

Mobile advertising is based on new advanced mobile technology in which SMS is the cost-effective text message advertising. Because virtually all mobile phones can send and receive text messages, SMS advertising messages reach the widest possible audience. Advertisers can use SMS advertising services provided by a mobile advertising agency to communicate with their target audience at the right time and right place. They can reach a wide range of audience who are subscribers of different mobile network operators.20

In Bangladesh there are six mobile operators and a huge number of subscribers are using mobile phones. Bangladesh's mobile phone users reach 114.808 million at the end of January 2014.21 To reach these people swiftly marketing companies can take the opportunity of SMS advertising. Mobile operators also can promote their business through offering SMS advertising to the advertisers. This form of advertising creates a unique opportunity for both mobile operators and marketing companies.

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Endnotes

1. Kavassalis, P., Spyropoulou, N., Drossos, D., Mitrokostas, E., Gikas, G., & Hatzis- tamatiou, A. (2003). Mobile Permission Marketing: Framing the Market Inquiry. International Journal of Electronic Commerce, 8 (1), pp. 55–79. 2. Michael, A., & Salter, B. (2006). Mobile Marketing: Achieving Competitive Advantage through Wireless Technology (1st ed.). United Kingdom: Elsevier. 3. Kotler Philip, Keller Kevin Lane, Koshy Abraham and Jha Mithileshwar (2010). Marketing Management, ed. 13, pp. 459. 4. Vimal Agrawal (2014). The Role of Advertising in Marketing Communications, Retrieved on March 12, 2015 from http://mangalmay.org/blog/the-role-of-advertising-in-marketing-communications/ 5. CLASSIC GUIDE TO STATE OF MOBILE ADVERTISING (2011). Retrieved from Mobile Marketer, pp. 4. www.MobileMarketer.com 6. De Reyck, B., & Degraeve, Z. (2003). Broadcast scheduling for mobile advertising. Operations Research, 51(4), 509-517. 7. Leppaniemi M, Karjaluoto H, Salo J (2004). The success factors of mobile advertising value chain, The E- Business Review, no. 4, pp. 93-97. 8. Petty Ross, D. (2003). Wireless advertising messaging: Legal analysis and public policy issues, Journal of Public Policy & Marketing, 22(1), pp. 71-82. 9. Tähtinen Jaana (2005). Mobile Advertising or Mobile Marketing. A Need for a New Concept?, FRONTIERS OF E-BUSINESS RESEARCH 2005, pp. 153. 10. Cleff Evelyne Beatrix (2007), Privacy issues in mobile advertising, 2007 Annual Conference Hertfordshire 16-1, April, pp. 2. 11. Mobile Marketing Association Version 408, (2008). Mobile Advertising Over- view, pp. 1. http://robertoigarza.files.wordpress.com/2008/09/art-mobile-advertising-overview-mma- 2008.pdf 12. Malhotra, Naresh K., (2001). Marketing Research: An Applied Orientation, Printice-Hall International (UK) Limited, London, 3rd edition, pp.50. 13. Kim, M. J., & Jun, J. W. (2008). A case study of mobile advertising in South Korea: Personalisation and digital multimedia broadcasting (DMB). Journal of Target- ing, Measurement and Analysis for Marketing, 16 (2), pp. 129–138. 14. Giuffrida G., Sismeiro C.., Tribulato G. (2008). Automatic content targeting on mobile phones, EDBT’07. 15. Bulander, R., Decker, M., Schiefer, G., & Kölmel, B. (2005). Comparison of Differ- ent Approaches for Mobile Advertising. Proceedings of the Second IEEE International Workshop on Mobile Commerce and Services. 16. Nysveen, H., Pedersen, P. E., Thorbjørns, H., & Berthon, P. (2005). Mobilizing the

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Brand: The Effects of Mobile Services on Brand Relationships and Main Channel Use. Journal of Service Research, 7 (3), pp. 257-276. 17. Yaniv, G. (2008). SOLD ON MOBILE MARKETING: EFFECTIVE WIRELESS CARRIER MOBILE ADVERTISING AND HOW TO MAKE IT EVEN MORE SO, International al Journal of Mobile Marketing, 3 (2), pp. 86-91. 18. Leppäniemi, M., & Karjaluoto, H. (2008). MOBILE MARKETING: FROM MAR- KETING STRATEGY TO MOBILE MARKETING CAMPAIGN IMPLEMENTA- TION, International al Journal of Mobile Marketing, 3 (1), pp. 50-61. 19. MMA. (2009). Mobile Advertising Overview. 20. Gopal, R. D., & Tripathi, A. K. (2006). Advertising via wireless networks. Inter- national Journal of Mobile Communications, 4 (1), pp. 1-16. 21. BTRC (2014). http://www.btrc.gov.bd/content/mobile-phone-subscribers-bangladesh-january-2014

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