Mobile marketing: Mobile advertising achieves great reach

Around 80 percent of the Swiss population has a smartphone. This holds great potential for companies: They have the opportunity to interact with consumers at any time and from any location. Conversely, consumers are not tied to fixed opening hours when they want to contact companies and use their services.

How pronounced this digital connection between smartphone users and companies actually is was investigated by the Lucerne University of Applied Sciences and Arts and the University of St.Gallen (HSG) as part of the project "Mobile as an Innovator in Marketing and Sales" (see box). For this purpose, they surveyed 1,535 people of all ages in German- and French-speaking Switzerland and analyzed, among other things, which mobile touchpoints companies and smartphone users have, how intensively the device is used along the customer journey, and how much personal data consumers are willing to disclose.

Mobile Touchpoints: Advertising dominant, location-based interactions rare

The study shows: Half of those surveyed see advertising several times a month on websites, in apps and during searches with search engines on their smartphones. For around 40 percent, contact via mobile advertising takes place several times a week, for over 20 percent daily. Almost 40 percent of respondents also come into contact with advertising on social media several times a month via their smartphones. "From these results, we conclude that at least half of smartphone users in Switzerland can be reached regularly with mobile advertising on their smartphones. Companies should take this reach and frequency into account when allocating their advertising budgets to different channels," says mobile expert and co-project leader Thomas Wozniak from the Lucerne University of Applied Sciences and Arts.

Well over half of the respondents regularly use company websites and apps on their smartphones. In terms of frequency of use, websites are ahead of apps: Websites are accessed more quickly and do not have to be installed first; apps, however, have the potential for a richer user experience and more varied interactions.

Location-based offers, for example push notifications triggered by beacons, on the other hand, are used regularly by only a small proportion of respondents. Among other things, this is due to the fact that only a few companies provide them at all, as a company survey conducted by the Lucerne University of Applied Sciences and Arts and the University of St.Gallen in spring 2016 made clear (see italicized section at the very bottom). "But such offerings also have potential. For example, innovative consumers in particular show a significantly stronger affinity for location-based services," says behavioral psychologist and co-project leader Dorothea Schaffner of the Lucerne University of Applied Sciences and Arts.

Mobile customer journey: moderate use at the beginning, lots of potential in later phases

The study also shows that smartphones are used to varying degrees in the different phases of the customer journey. More than half of the respondents use the

smartphone regularly to find ideas or inspiration about products and services and to learn about products and services. "The smartphone is a very ubiquitous, immediate and spontaneous means of communication that is always available at hand when users need information about products," reasons Katarina Stanoevska-Slabeva, an expert in digital communication at the University of St. Gallen.

Slightly less than half regularly use their smartphone to compare prices. It is used much less frequently for transactions such as buying products or booking services. However, more than 15 percent of respondents make purchases on the Internet via smartphone several times a month. Only a very small proportion of respondents currently pay with mobile services such as Twint, Paymit or Apple Pay. Payments at the point of sale are even more widespread than peer-to-peer payments. "Regardless of the specific provider, the study provides evidence that 20 percent of smartphone users would pay with their device at the checkout," Wozniak says.

However, the smartphone still does not seem to be the communication tool of choice for many to share experiences with companies or to evaluate products or services. Nevertheless, 20 percent use it regularly to search the Internet for solutions to a problem with a product or for answers regarding a specific service. This means that there is still great potential at the back end of the customer journey, for example for service and customer support. "Chat-based messenger applications such as WhatsApp are now becoming increasingly important in this phase of the customer journey. They are particularly attractive because they enable a direct, bilateral relationship to be established with customers. This strengthens the bond between companies and customers," says Katarina Stanoevska-Slabeva.

Individualization versus privacy concerns

The company survey conducted in spring 2016 by the Lucerne University of Applied Sciences and Arts and the University of St.Gallen showed that companies still tailor their content and messages too little to individual customers. To do this, companies need more information about their clientele, recognizing that consumer concerns about data privacy are an obstacle to individualized mobile marketing.

The survey of smartphone users now confirms that they are predominantly reluctant to share personal data such as their current location with companies via smartphone. According to the survey, 81 percent of respondents are concerned that their data and thus their privacy are not sufficiently protected. Nevertheless, just under 20 percent would provide sociodemographic information so that companies can tailor information, offers or discounts more individually. 17 percent would also release their current location for a more targeted offer. Less popular is the tracking of usage behavior in apps and on websites as well as the current location in the background.

So is individualized mobile marketing hardly possible because of the great reluctance of respondents to disclose personal data? "Yes, it is, because research shows that despite their concerns about data privacy, many users will share personal information if they receive added value in return. Attitudes and concrete actions drift apart," says Wozniak. According to the research team, companies are nevertheless well advised to take these concerns seriously, for example by communicating clearly and transparently what data is needed for what purpose and what the added value of data sharing is for users.

Mobile as a driver of innovation

The study on the digital relationships of smartphone users and companies is part of the project "Mobile as an Innovator in Marketing and Sales". The aim of the Lucerne University of Applied Sciences and Arts (Institute for Communication and Marketing IKM as well as Institute for Tourism Economics ITW) and the University of St.Gallen (Institute for Media and Communication Management) is to develop a toolbox that supports companies and agencies in effectively using the mobile channel in marketing and sales. To this end, the two institutions first investigated the importance of mobile marketing among Swiss companies. One finding from this is that they still rely too little on individualized content. The project is supported by various partners (digital agency Aperto Switzerland, Swisscom, Magazine zum Globus, Swiss Post and Raiffeisen Switzerland) and funded by the Federal Commission for Technology and Innovation CTI. Further information: Hslu.ch/project-mobile-marketing.