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Regular version of the site

How effective is the advertisement in mobile applications?

Within the framework of a joint seminar of GAMES research group and research and training group “Empirical demand estimation” Maria Okuneva, the 4th year student of “Economics” educational programme, presented a study focused on the efficiency of individual targeting in mobile applications.

Maria started her speech from description of the object of her study and told about advantages and disadvantages of advertisements in mobile applications. “What is the specific of mobile applications? Not everybody is ready to download them, not everybody has a smartphone, so their audience is limited. But at the same time users who downloaded applications are already loyal to a product or a brand. In this case the efficiency of advertisement can be higher” – noted Maria. The author of the study also underlined that despite the specificity of this media the number of users of mobile applications all over the world grows very fast.

“91% of brands in the USA have their own mobile applications. It is a very widespread type of advertisement. There is no such statistics in Russia yet. But one can assume that such method of advertisement will gain momentum and become more popular, because it requires less expenses” – the student said. It is considered though that if an application is downloaded by less than 1000 users, it is unprofitable.

Maria also told that her study was carried out together with retail food chain “Family” on the basis of their mobile application. To date 13 thousand users are registered in it. Useful options are foreseen in the application: notification about special offers and new products, the possibility to make shopping list etc.

But how to make advertisement in a mobile application more personalized? Which characteristics of users and a product will make this advertisement more efficient? “The main goal of the study is to create rules for individual targeting, that means, to understand, what will be the basis for selecting users to which we will send advertisement, and what characteristics of their former purchase behaviour can influence the success of an advertising campaign” – the author explained. Besides, it is planned to explore the effect of repeated advertising (in what number of messages the advertisement loses its effect).

Maria presented the design of her work. Within the framework of the study a randomized experiment will be carried out: users of the mobile application will be divided into 11 groups, and mailing of push-messages will be the treatment. One of the groups will be control, it will not receive messages with advertisements. 8 groups will receive advertisement messages about some product from a food category. The last 2 groups will be used for tracing of effects from repeated advertisements: users of one group will receive one and the same advertisement message 2 straight times, and in another group – 2 different advertisement messages.

“We imply that a brand of a product can be important for users, and this effect will also be considered. But not all food categories have strongly marked brands. For example, sugar is a unified product, for which the brand is not important. We also plan to explore goods with strongly marked brands, for example, “Activia” yoghurt. We think that for such goods the efficiency of advertising will be different” – Maria explained.

The participants of the seminar asked clarification questions on the design of the study and also on randomizing of mobile application users and on taking into account other economic effects which can influence the results.