Mobile Advertising: An Empirical Study of Advertising Response and Search Behavior

Although businesses are increasing their mobile advertising budgets, its strategic value and effectiveness have not been investigated in depth. Using data from an automobile advertisement campaign, we focus on investigating the efficacy of mobile advertising in terms of consumers’ response to sign up for a car test drive in relation to their search behavior. We propose and estimate an empirical model of advertising response and search behaviors based on a panel-level random-effects specification of simultaneous binary logit and Poisson count models. We find that users’ reactions to the advertiser’s target response are related to a) the depth and breadth of information search, b) contents viewed in each session, c) the number of return session visits and session durations. The sensitivities of advertising response to the numbers of informative and persuasive ad views, the numbers of images and characters viewed are higher during the campaign’s focal event of a car show.