9.5 Mobile and Smartphone
(Rangone and Renga 2006) offers a framework in the domain mobile advertising
(Boyd, Kannan, and Slotegraaf 2019) Influence of Branded Mobile Apps on Firm Value
Context:
Increasing trend of firms launching branded mobile apps.
Limited knowledge on how these apps influence firm value.
Research Method:
Used stock market returns to measure firm value.
Assessed the impact of announcements related to branded mobile app launches on firm value.
Research Focus:
Investigate the influence of mobile app design on firm value, considering the various touchpoints apps introduce in the customer journey.
Examined app features emphasizing:
Peer-to-peer interactions regarding the brand.
Personal-oriented interactions between the customer and the brand.
The purchase phase.
Key Findings:
Announcing the launch of a mobile app positively impacts firm value.
The features highlighted in the app design significantly influence this value creation.
(J. Cao, Chintagunta, and Li 2023) Monetizing Free Mobile Apps
Objective:
Address the challenges faced by non-advertising-based mobile apps when attempting to monetize free services.
Investigate the effectiveness of different pricing strategies and aspects of product design.
Strategies Evaluated:
Pricing Strategies:
Hard Landing: A “pay or churn” approach where users face a paywall.
Soft Landing: Users continue to access limited free services even after monetization.
Product Design:
- Decision to provide exclusive secondary offerings to those users who subscribe.
Methodology:
A large-scale randomized field experiment with a mobile app firm.
Assessments of user behavior in response to implemented strategies.
Customer survey and a separate experiment on the Prolific platform to validate the mechanisms at play.
A follow-up field experiment to test generalizability.
Key Findings:
Soft Landing: This approach reduced the willingness of existing users to subscribe.
Exclusive Secondary Offerings: Offering exclusive benefits to paying users also decreased the willingness to subscribe.
Positive Interaction: There’s a beneficial interaction between the soft landing approach and exclusive secondary offerings, which positively influences subscriptions.
Generalizability: The results from the second field experiment were consistent with the primary experiment.
Theoretical Mechanisms:
The findings suggest that users might perceive soft landing strategies as a less aggressive monetization method, which might reduce the immediate perceived need to subscribe.
Exclusive offerings, while appealing, might create a sense of divide among users. However, when paired with the soft landing strategy, users might view it as a fair trade-off, leading to increased subscriptions.
Managerial Implications:
While both soft landing and exclusive secondary offerings individually deter subscriptions, their combined application may be beneficial.
Firms should consider the interplay between pricing strategies and product design features when planning monetization.
Melumad and Pham (2020) found that consumers derive not only function benefits, but also emotional benefits from their smartphones. Under stress, consumers want their smartphones, because smartphones give users greater stress relief. Moreover, this pacifying effect is greater for one’s own smartphone than other’s smartphones.