The Importance Of Mobile Advertising To Banks

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A study from professors at INSEAD and the University of Pittsburgh found that:

“Low-fidelity mobile advertising campaigns are effective when they are for products that trigger further thought and consideration, which includes campaigns for high (versus low) involvement products, and for products that are seen as more utilitarian (versus more hedonic).”

Don’t be thrown off by the “low-fidelity” reference. In the professors’ typology, low-fidelity mobile ads are those that carry relatively little information, and are low-quality, from a visual perspective. The authors argue that, as a matter of fact, the majority of mobile ads are low-fidelity, versus high-fidelity.

According to the study:

“Low-fi mobile ads that, as a consequence of their design and technology restrictions, contain relatively small amounts of information are effective when used in situations where consumers have both the ability and motivation to process and elaborate on the information in a deliberate fashion.

Interestingly, the study found that when consumers rely on gut instinct, low-fi mobile ads are ineffective because consumers are less likely to process the information.

My take: The study has implications for banks and credit unions and raises a whole host of questions regarding FIs’ advertising strategies.

Banking products are, for the most part, high consideration/utilitarian products (unless you get your hedonistic jollies from a checking account, in which case, feel free to argue with me, but just don’t touch me). Which makes them great candidates for mobile ads.

But there are some questions that need to be answered here:

1. In what context will these mobile ads be effective? That is, if the ads are shown during mobile banking sessions, will they be as likely to be viewed and processed as ads shown in other contexts?

2. What kind of information regarding high consideration/utilitarian products is most effective? In a banking context, is it rate and fee info, or is it something else?

3. Are banks and credit unions equipped to handle the “next step”? The study cited above indicated that low-fi mobile ads were effective in getting consumers to take another step in the process. Many FIs will assume that next step is purchase. Wrong! Who and where should mobile ad-viewing consumers turn to? Betcha your ad agency doesn’t know the answer to that question.

4. Are the findings from this study extensible to a broad set of consumers? Any study done on the effectiveness of mobile advertising likely involved the “early adopter” – who may not be representative of the overall population. Correction: IS not representative.

5. Why is low-fi mobile advertising effective with high consideration/utilitarian products? The study went to great lengths to statistically prove the connection, but failed to explain WHY the connection exists.

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