WATCH OUT FOR THE 4
TH
SCREEN:
EXPLORING USER ATTITUDES
TOWARDS LOCATION-BASED
ADVERTISEMENTS ON
SMARTWACTHES
By
Kitti Alexandra Fabian
Media Technology: Strategic Media Development Advanced level (ME620A), 1-year master
Master thesis, 15 credits Malmö University
Supervisor: Sara Leckner Examiner: Sven Packmohr Date of submission: 22 June 2020
1
Abstract
Smartwatches are becoming more and more independent from smartphones, with thousands of applications available to smartwatch users. Some businesses already included smartwatches in their marketing initiatives, and it is only a matter of time until advertisers expand to the smartwatch users´ screens. Smartwatches have been called the most personal devices ever and therefore consumer attitudes are a crucial aspect in the adoption of location-based advertisements. This study investigated smartwatch users´ attitudes towards location-based advertising on smartwatches along with the factors that influence these attitudes by employing a research through design approach. Through semi-structured interviews, focus groups and prototypes of pull and push location-based advertisements on smartwatches, it was possible to discover how smartwatch users perceive location-based advertisements on smartwatches. The result of this study is that smartwatch users are open to receive location-based advertisements on their smartwatches, however their attitudes will be affected by the following factors: relevancy, personalization, informativeness, privacy concerns, context (location, frequency, timing), perceived ease of use and attitude towards advertising in general. Factors such as timing and frequency do not apply to pull location-based advertisements. Relevance is the most important factor and includes the element of control, meaning that smartwatch users can provide feedback on the specific advertisement on their smartwatch. The prototypes that were developed based on smartwatch users´ input provide four ready concepts of how location-based advertisements on smartwatches could look like.
Keywords: smartwatch, smartwatch location-based advertising, push location-based advertising, pull location-based advertising, attitudes, factors, relevance, privacy concerns
2 Table of Contents 1. Introduction ... 4 1.1 Research Aim ... 6 1.2 Research Questions ... 7 1.3 Thesis Overview ... 7 2. Literature review ... 8 2.1 Smartwatch Universe ... 9
2.1.1 Smartwatch usage: the role of notifications and applications ... 10
2.1.2 Attitudes towards smartwatches ... 11
2.1.3 Smartwatch as a medium for marketers ... 12
2.1.4 The possibility of using biometric data and the IoT network for advertising on smartwatches ... 13
2.2 Consumer Attitudes ... 15
2.3 Attitudes toward advertising ... 16
2.3.1 Attitudes towards advertising in general and digital advertising on different devices ... 16
2.3.2 Personalized advertising and the importance of relevance ... 18
2.3.3 Location-Based Advertising ... 19
2.3.4 Contextual factors ... 21
2.3.5 The aspect of privacy ... 23
3. Methodology ... 25
3.1 Qualitative Research ... 25
3.2 Research through Design ... 25
3.3 Data collection overview ... 26
3.4 Inspiration: Semi-structured interviews ... 27
3.4.1 Data analysis ... 29
3.4.2 Participants ... 30
3.5 Ideation: Prototype ... 30
3.6 Implementation: Focus Group ... 31
3.6.1 Data analysis ... 32
3.6.2 Participants ... 32
3.7 Ethical Considerations ... 33
3.8 Reliability and validity ... 34
4. Findings ... 36
4.1 Inspiration: Semi-structured Interviews ... 36
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4.3 Implementation: Focus Groups ... 47
5. Discussion ... 53
5.1 Attitudes toward location-based advertisements on smartwatches ... 53
5.2 Relevance: Context, Informativeness and Personalization ... 56
5.3 Personalization versus Privacy concerns ... 59
5.4 Attitudes towards advertising in general ... 61
5.5 Prototypes: Perceived ease of use ... 62
6. Conclusion ... 63
6.1 Practical implications ... 64
6.2 Suggestions for further studies ... 64
6.3 Limitations ... 65
7. Bibliography ... 67
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1. Introduction
Advertising has a long history that can be traced back to ancient civilizations. Advertising platforms started out a long time ago as rocks, papyruses, and signs for business. The appearance of the printing press and movable type provided further platforms for advertisers and by the 20th century, advertising platforms evolved with technology, appearing on radio, television, internet, and finally mobile devices such as smartphones (Tungate, 2007). Online or Internet advertising has become one of the most profitable and successful business models of the web throughout the past 20 years (Aksu et al., 2018). Worldwide spending on advertisements is forecasted to reach 615 billion dollars in 2020, of which online advertisements amount to 276 billion, almost half of the total spend (Hill, 2020). The advancements in technology brought new tools for advertisers to explore, enabling advertisers to create targeted ads, trying to reach people on an individual level (Bauer & Strauss, 2016). Advertisers now tailor advertisements to individuals based on their interests, online search history, previous online activity, location and more (Zimmermann et al., 2005).
Location-based advertising has gained popularity with the rise of mobile devices like smartphones, as these devices are equipped with GPS, which enables advertisers to reach their consumers and provide location specific advertisements to them (Bruner & Kumar, 2007). Location data has helped improve the way we navigate, shop and search and it has helped companies target their consumers on an even deeper personal level (Banerjee, 2019). On the other hand, the usage of location data can cause privacy concerns to users (Limpf & Voorveld, 2015) and if combined with further data such as health, privacy concerns may increase. Still, as much as 25% of marketing budgets, 50% of brands (Kaplan, 2017) and $95.4 billion in advertising revenues (Nakashima, 2018) employ location-based marketing to get to their consumers.
Smart wearable devices like Google glasses, virtual reality (VR) headsets and smartwatches are some of the latest advancements of consumer technology. The number of wearable devices is expected to reach 1.1 billion in 2022 (Holst, 2019). Furthermore, smartwatches are one of the most popular devices in the wearable market right now (Statista, 2020c). Some call smartwatches the fourth screen, after television, computers, and smartphones (Wasserman, 2014). As of now, very few brands have employed advertisements on smartwatches, possibly
5 due to the size of the smartwatch or since the earlier versions of smartwatches were not as advanced as the current models. Furthermore, Paluch and Tuzovic (2019) point out, that the decision to adopt practices to new technologies like smartwatches depend on financial aspects (e.g., costs, return on investment) and the attitudes consumers maintain toward the usage of their device. Nonetheless, wearables such as smart watches are a new platform for advertisers to explore.
Smartwatches have gone through a great development since the appearance of the first model of one of the most popular smartwatches, the Apple Watch. From having to rely on a connected device, smaller screen, less functions, no GPS and limited apps available to a more independent, stand alone and multifunctional device that can function on its own and perform a lot of the tasks that the owner´s smartphone can (Thompson, 2018). Since the latest generation of smartwatches is able to operate without the proximity of a smartphone (McGarry, 2018), it is now possible to examine smartwatches as a stand-alone device. Smartwatches can collect data such as the user’s location, health, and behavioral data which together with the user's data from other connected devices accumulates. Location from the advertising perspective may be one of the most important aspects for providing advertisements on smartwatches as the smartwatch is “always” on the user. In addition, to provide better advertisements on smartwatches, advertisers need to understand the way users use their smartwatch. Smartwatches are part of a smart ecosystem (Internet of Things), such as smart homes, smart phones, computers, and other technologies. Pitstick (2020, para. 1) sees them as “extensions of your smartphone and other digital devices that provide connected experiences where your other devices can’t go”. Being able to go anywhere with the user is one of the advantages of smartwatches. Smartwatches are extensions of smartphones similarly to how smartphones are extensions of desktops. Each device is connected to the user and prolongs the user´s activity, yet the devices themselves are stand-alone.
Smartwatches were called "the most personal device ever" (Apple, 2014) and they pose different challenges to advertisers compared to already platforms and formats of advertising. One of the biggest challenges could be how users perceive these advertisements, in other words their attitude towards these. Due to the personal nature of these devices along with every alert posing physical interruption with a vibration, advertisers will need to provide value for each interruption they cause. Furthermore, understanding what factors affect consumer´s attitudes might help advertisers design smartwatch advertisements for a better experience to their users.
6 As stated, the number of smartwatch users are growing, and smartwatches are becoming more and more advanced. Therefore, it might be only a matter of time until advertising budgets and strategies start including smartwatches as a platform to advertise on. Some companies already started embracing smartwatches as part of their marketing strategy, such as retailers developing smartwatch applications to provide personalized offers (e.g., sales offers, coupons) to their consumers (Adewusi, 2018). Furthermore, numerous news providers reported that advertisements will be coming to smartwatches (Kendrick, 2015). Due to this shift, it is important that advertisers consider the user´s perspective before taking over the smartwatch users´ screens. As Paluch and Tuzovic (2019) found, by analyzing consumers´ attitudes, together with the barriers and facilitators of acceptance, companies can develop better services for wearables, such as advertisements on smartwatches.
1.1 Research Aim
Since smartwatches pose as a new market for advertisers to explore, it is necessary to examine user's acceptance and attitudes towards advertising on these devices. According to the literature research done, there has not been any studies about the users´ attitudes towards advertisements on smartwatches. Therefore, this study aims to explore smartwatch users’ attitudes and acceptance along with the factors that affect their attitudes towards advertisements on these devices. To understand user attitudes towards advertisements on smartwatches, this study will examine how users use their smartwatches and how they perceive advertisements in general along with location-based advertisements on mobile devices. Furthermore, this study will explore different ways of advertisement personalization to identify contextual scenarios that will be discussed through scenarios and prototypes with the study´s participants. The aim of the prototypes is to realize the experience of receiving advertisements on smartwatches, explore the factors that affect user´s attitudes further and to gain a holistic understanding of how users perceive the overall phenomenon. By employing semi-structured interviews and focus groups, this research aims to provide a starting point in research about attitudes towards location-based advertisements on smartwatches while delivering practical implications to advertisers and marketers alike.
7 1.2 Research Questions
To cover the aim, the following research question and sub-question have been formulated:
RQ: What attitudes do smartwatch users have toward location-based advertising on
smartwatches?
SQ: What factors affect smartwatch users´ attitudes towards location-based advertisements
on smartwatches?
1.3 Thesis Overview
The structure will be the following: the first chapter of the paper is Introduction, which contains the choice of the topic and motivation, the aim of the study and the research questions. The second chapter consists of the literature review, where the main terms and concepts are presented along with the theories relating to this study. In the third chapter, the research approach, and the chosen methods to carry the study out are described along with the procedures of analysis, sampling, and ethical considerations. Chapter four contains the findings of the study. Chapter five is the discussion section, where the findings will be compared to the literature and discussed. Chapter six contains the conclusion which provides the answers to the research questions, concludes the project, presents the suggestions for further research, and includes the limitations and delimitations of this study. In addition, practical implications will be included toward marketers.
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2. Literature review
In this phase of the study, academic articles from secondary sources have been accounted for. Related course material, online search in Malmo University library database as well as in EBSCOhost research database obtained the research papers that were used to build the theoretical background of this study. More specifically, the reviewed literature circles around the following main topics: smartwatches, attitude towards advertising and location-based advertising (see Table 1). Within the smartwatch section, the researcher examined the current literature around how consumers use smartwatches, the motivation behind smartwatch adoption and explored smartwatches as a medium for marketers. Moreover, the connection between smartwatches, mobile devices and home appliances was examined through the lenses of IoT. Within the chapter on attitudes, the aim was to understand what attitude is, what influences it and what components of attitude apply to this study. Furthermore, attitudes towards different types advertising and location-based advertising were examined, with a focus on what are the factors that influence these phenomena. At last, SMS advertising has been included since it is an adjacent field to advertising on smartwatches due to their similarities (e.g., both types of advertising could be disruptive to the user and limited space for advertisements).
Main topic Term Number of search results
Smartwatch Universe
smartwatches and wearable technology 1,222
smartwatch adoption 141
smartwatch usage 214
smartwatches and IoT 212
attitudes towards smartwatches 17
advertising on smartwatches 36
Attitude towards advertising
attitude towards advertising 9,184
attitude towards advertising on smartwatches 1 attitude towards advertising on mobile devices 97 attitude towards location based advertising 95 attitude towards personalized advertising 98
attitude towards SMS advertising 82
Location
based advertising
location based advertising 2,381
9 location based advertising on mobile devices 302
location based advertising factors 271
location based advertising privacy 197
location based advertising context 239
Table 1: Main search terms used for literature review
2.1 Smartwatch Universe
The technology behind wearable devices has been characterized as one of the most dynamic technologies in IoT (Charlton & Poslad, 2016; Khakurel et al., 2018). More and more academics have shown interest in examining the challenges and opportunities associated with such technologies (Pitt et al., 2017), in areas like health and fitness (Pantelopoulos & Bourbakis, 2010), quality of life (Lee et al., 2016), and education (Demir et al., 2016). Wearable devices enable user interaction through hands-free operation (Sesay & Steffen, 2020) in contrast with smartphones where user action is required for interaction. For example, in the case of smartwatches, the user just needs to raise a hand to view the device, and access information effortlessly through a faster and more ubiquitous way (Pizza et al., 2016). In comparison to smart wristbands (e.g., Nike Fuelband or Fitbit Surge), smartwatches have a larger display and the opportunity to install diverse applications. Furthermore, smart wristbands are mainly used for tracking a person´s physical functions such as pulse which can later be examined on another device (e.g., laptop or smartphone) (Chuah et al., 2016). Smartwatches use different operating systems, such as WatchOS, Android Wear OS, Tizen OS or other operating systems (Dehghani & Kim, 2019). As of 2019, Apple Inc. held 47.9 percent of the global smartwatch shipment shares, which resulted in Apple Inc. dominating the smartwatch market (Statista, 2019). Chuah et al. (2016, p. 277) defines smartwatches as “‘a mini device that is worn like a traditional watch and allows for the installation and use of applications” while Dehghani et al. (2018, p. 481) defines them as “a multifunctional wrist-worn device that provides fast, convenient access to information and applications via a wireless/Bluetooth connection”. Some call smartwatches the “fourth screen”, after television, computers, and smartphones, while others argue that it is an extension of one´s smartphone (Pitstick, 2020). However, the newest generation of smartwatches are indeed able to function without a smartphone (McGarry, 2018), which shows that smartwatches are developing fast and could possibly become the fourth screen in the very near future.
10 With the rise of mobile advertising, the line between consumer´s devices and body is turning blurry and advertisements may be recognized as more intrusive compared to receiving advertisements on one´s television (Wasserman, 2014). Smartwatches may blur this line even further, which makes it harder for marketers to receive acceptance from their consumers to market on their smartwatches (Wasserman, 2014). To understand the consumers´ motivation to own smartwatches and the way they use them, the next section will examine the literature around the current way smartwatches are being used and the adoption intention of these devices. Understanding the way consumers use their smartwatch may help advertisers to identify opportunities when advertisements on smartwatches are most appropriate, in regard to context, type of ads or the placement of the advertisement. Furthermore, the insights from the literature on smartwatch usage provides useful information that will be used during the interviews, focus groups and the development of the prototype. Lastly, smartwatches as an advertising medium were examined.
2.1.1 Smartwatch usage: the role of notifications and applications
Smartwatches are used for many tasks beyond showing time. Some of the most popular functions include: receiving notifications, texts, activity tracking, news updates, phone calls, alarm clock, checking emails, viewing photos/videos, GPS/navigation, remote control for music or home automation (Richter, 2017). Based on a survey of over 5000 consumers from the United States, the top three functions used are receiving notification, activity tracking and news updates (Richter, 2017). However, the functions of a smartwatch aren´t limited to the above; with over 10.000 apps available for Apple Watch and more than 4.000 apps for Android Wear, the list of what one can do with their smartwatch feels rather long (Curry, 2015). Smartwatches could also be seen as a miniature version of a smartphone.
Notifications are one of the main functions of mobile devices; consumers receive notifications often simultaneously on all of their smart devices such as PCs, smartphones, smartwatches, smart TVs and so on (Shirazi & Henze, 2015). In the case of smartwatches, notifications can be regarded as one of the central activities of the device, providing updates on a variety events like social networking site updates, text messages or the arrival of emails (Shirazi & Henze, 2015) to mention a few. Studies have demonstrated that notifications are valuable to users, but at the same time are distractive and disruptive (Iqbal & Horvitz, 2010; Mark et al., 2012). This could be an indication that advertisers need to deliver value connected to the wants and needs
11 of a user. Notifications are used to capture the user´s attention and deliver information by receiving a visual cue, audible signal and/or haptic alert (e.g., motion, vibration) (Iqbal & Horvitz, 2010). In a study of notification on smartphones, Fischer et al. (2010) found that interest, entertainment, relevance and actionability are important factors of SMS notification content and can increases the subjective importance of the delivered message. Furthermore, users find notifications that aren´t useful to them as annoying (Felt et al., 2012).
In addition, as stated earlier activity tracking is one of the most popular use cases of smartwatches (Richter, 2017). Smartwatches can supply highly precise health-related data, which allows consumers to actively participate in monitoring their health and well-being (Canhoto & Arp, 2017). The smartwatch motivates users to exercise more through gathering data such as burned calories, heart rate, step counter and more, which enables users to see their smartwatch as way to monitor their health (Dehghani et al., 2018). This type of tracking is also known as self-tracking, life-logging or the quantified self and is now an important trend in personal optimization and lifestyle (Hoy, 2016; Lupton, 2016).
Smartwatches and wearables are more than just another device; similarly to traditional watches they can be viewed as fashion items and perceived as “fashnology” (fashion and/or technology) (Chuah et al., 2016). With technology and fashion blending together, smartwatches develop to being “a part of a user´s self” (Chuah et al., 2016, p. 1). Based on a study of smart glasses, there is a distinction in adoption between those who see wearable devices from a purely technological perspective and those who see them from the fashion perspective (Rauschnabel et al., 2016). Users who see wearable devices from the technological perspective tended to focus on the practical and functional benefits, while users identifying with the fashion perspective highlighted the social benefits, ease of use and the perceived risk of endangering other´s privacy among their adoption decisions (Rauschnabel et al., 2016). However, Cho et al. (2019) in a quantitative survey (n=198) found that both fashion-related and technological characteristics of a smartwatch have an effect on product attachment. Product attachment here means the satisfaction and pleasure users gain by using their smartwatch. The considered fashion attributes were visual aesthetics and self-expression, while the technological attributes were interactivity and autonomy (Cho et al., 2019).
2.1.2 Attitudes towards smartwatches
In a qualitative study, Adapa et al. (2018) examined the factors that influence smartwatch adoption and identified that the availability of fitness apps, aspects connected to one´s personal
12 image and personal value were the most influential factors. One of the main obstacles for smartwatch adoption is the perceived usefulness versus the price consumers pay for their product (Moore, 2016), which is aligned with the information systems success model (Delone & McLean, 2003). The model proposes that through six dimensions (information, system and service quality, intention to use, user satisfaction, and net benefits), one can achieve an understanding of the “success” of the investigated information system. Whether the appearance of advertisements on smartwatches would make smartwatches more useful or whether advertisements would have an impact on product abandonment could depend on many aspects. For example, some of these aspects could be understood through the six dimensions of the Information Systems Success Model. Alternatively, the technology acceptance model (Davis, 1989; Davis et al., 1989) also features perceived usefulness as one of its components for understanding how and why users accept a certain technology. When talking about how technology could evolve, Kohl (2015, para. 1) imagines a future where “technology enhances our life experiences by providing a needed boost at just the right time”. Wasserman (2014) states that advertising on smartwatches would require advanced hypertargeting that is received at an appropriate time, place and location and that only a limited amount of advertisements should arrive to the consumers´ wrists.
2.1.3 Smartwatch as a medium for marketers
Wearables have not only been discovered by consumers, but businesses started looking at them as a medium to leverage in their various market strategies as well. From the perspective of marketers, smartwatches could be a medium on their own or an extension of mobile advertising (Pitstick, 2020; Wasserman, 2014). Through wearables, marketers can collect real-time, relevant information of their consumers which can help improve business decisions (Hersh, 2018). Life and health insurance companies, airlines, medical and health workers, supermarkets and other workplaces have started to include self-tracking initiatives in their health, fitness and employee productivity programs (Lupton, 2016; Simonds, 2016; Tuzovic & Mathews, 2017). Furthermore, retailers such as JC Penney are developing smartwatch applications to provide personalized offers (e.g., sales offers, coupons) to their consumers (Adewusi, 2018).
Advertising on smartwatches will require sophisticated measures. Advertisements may have a negative effect on the medium itself, in this case on smartwatches. Research has shown that negativity towards advertisements can have a spreading effect on the media vehicle itself
13 (Thota et al., 2012). For instance, advertisements on a website are seen as part of the website and therefore irritating advertisements have a negative impact on consumer´s attitude towards the website (Thota et al., 2012).
In the case of SMS advertising, Bakr et al. (2019) found that since consumers perceive SMS a personal communication channel, advertisements can be perceived as more intrusive. In addition, users first need to accept SMS as a channel for advertising to accept SMS advertisements (Bakr et al., 2019). Speck and Elliot (1997) found that in the case of television and print media, irritation caused by advertising is due to the interruption of content consumption. This has not been proven for advertisements on smartwatches, but it may be an indicator for the number of advertisements arriving on the smartwatch, to avoid distracting content consumption. In addition, smartphone users glance at their device for minutes at a time, while smartwatch users only look at their smartwatch for a few seconds (Kendrick, 2015), which is another aspect to take into consideration when creating advertisements for smartwatches. This could be a weakness if the aim of advertisers is to provide content that needs to be consumed for a longer time, such as videos. However, this might just be an indication that smartwatches as of now, are not meant for a long interactions and advertisers should aim to provide content that can be consumed rapidly, such as notifications, text messages or small in-application advertisements. Overall, smartwatch as a channel or medium for advertising needs to be examined and it is considered an important keyword in this thesis. In this thesis, channel and medium are used interchangeably to describe the place or platform where advertising occurs.
2.1.4 The possibility of using biometric data and the IoT network for advertising on smartwatches
For the purpose of the study a brief introduction of the Internet of Things concept and evolution is stated. The term Internet of Things was pioneered by MIT Auto-ID Center in 1999 (Auto-ID
Labs, n.d.). Kevin Ashton, one of Auto-ID center cofounder, used this term to get attention
around the idea of applying RFID (Radio-frequency identification) technology in the supply chain domain (Ashton, 2009). Since then many researchers and practitioners started to use the term (IoT) to describe the combination of the physical world with the digital world, through automatic identification technologies, real-time locating systems, sensors and actuators (Uckelmann et al., 2011). IoT is a concept that surrounds many technologies and research areas with a purpose to extend the existing Internet to physical objects (Uckelmann et al., 2011). It
14 “links the objects of the real world with the virtual world, thus enabling anytime, anyplace connectivity for anything and not only for anyone. It refers to a world where physical objects and beings, as well as virtual data and environments, all interact with each other in the same space and time” (Santucci, 2010, p. 4). According to Evans (2011), the birth of IoT took place sometime between 2008 and 2009, when more “things or objects” were connected to the Internet than people. The number of tablets, smartphones and other internet-connected devices was brought to 12.5 billion in 2010 making the number of connected devices per person 1.84 (higher than 1 for the first time in history). Since then, the number of IoT connected devices has continued to grow reaching 26.66 billion devices in 2019 with an estimation of 75.44 billion devices in 2025 (IoT, n.d.). Because of the large number of devices included, IoT is a good platform to take advantage of for creating new applications, services or expanding existing ones (Aksu et al., 2018).
The appearance of mobile devices further developed the way online advertising is being conducted (Qin et al., 2014). Traditional online advertising would include display advertisements like banners on desktop computers, while for mobile devices (e.g., smartphones) new formats such as native advertisements emerged within the content stream of an application (Lalmas et al., 2015). Furthermore, it is expected that online advertising will ultimately expand to the world of IoT and leverage the interconnected smart devices of the user (Aksu et al., 2018). Advertisers can leverage the following IoT features: device diversity, high connectivity, and scalability (Chen et al., 2016). Through device diversity, advertisers will be able to create more complex strategies that are context aware, while connectivity and scalability will let advertising be carried out in a dynamic environment, where the user´s smart devices continually leave and join the network (Aksu et al., 2018). Currently, online advertising is based on the user´s activity on the web (e.g., browsing history), while IoT advertising could potentially be able to track the user´s daily activities through the user´s connected devices. As users already have privacy concerns over online personalization, the amount and type of data IoT devices would collect could possibly deepen the user´s privacy concerns even more.
Biometric features such as heart-rate variability could determine emotions which could help advertisers personalize advertisements even more (Orazi & Nyilasy, 2019). Orazi & Nyilasy (2019, p. 1) suggest that marketers could create advertisements based on “biometric data that signals a person’s changing mental state in real time”, which is especially relevant for smartwatches. The current ways to assess the consumers emotional state such as automated profiling approaches, based on text-mining and image-recognition are limited as they rely on
15 the consumers supply of content to operate. However, even with the right amount of content supplied, the ambiguous nature of these images and posts could end up suggesting the incorrect emotional state of the consumers (Orazi & Nyilasy, 2019). People´s moods change throughout the day based on external stressors (Gardner, 1985). If persuasion is at its best when the emotional content of the advertisement correlates to the consumer´s emotional state, then real time data is necessary for delivering effective messages (Puccinelli et al., 2015).
However, real-time, health-related and sensitive information collected by wearables could pose further privacy concerns especially when combined with further information such as physical location (Orazi & Nyilasy, 2019). These concerns could be data breaches and the personalization-privacy paradox. Personalization-privacy paradox refers to consumers wanting to receive personalized and relevant content that requires their information, but at the same time they are resistant to be profiled online and provide their information (Awad & Krishnan, 2006). Even though GDPR in the European Union demands “unambiguous” consent to collecting data from their consumers (Orazi & Nyilasy, 2019), such details could be buried in the terms and conditions which consumers need to agree to if they wish to use a service.
2.2 Consumer Attitudes
Attitude often refers to a set of emotions, beliefs, and behaviors toward a specific object, person, thing, or event (Cherry, 2020). Others define attitudes as evaluations of “something”, where this certain “something” is known as the attitude object (Stangor et al., 2014). In this thesis, the attitude objects are advertisements, more specifically the examples of location-based advertisements on smartwatches that the data collection method participants will be introduced to. Attitude is made up of three components, often referred to as the ABC model of attitudes (Zanna & Rempel, 1988) (Figure 1). Letter A
stands for the affective component, that shows the emotional side of how a certain event or issue and how it makes a person feel. Then the behavioral component suggests how attitudes affects the individual’s behavior. Lastly, the cognitive component which represent the individual´s thoughts and beliefs of a subject (Haddock & Maio, 2004). Furthermore, attitudes are known to
be an important part of the self-concept. The self-concept is defined as “a knowledge
Attitude Affective
component Behavioural component component Cognitive
16 representation that contains knowledge about us, including our beliefs about our personality traits, physical characteristics, abilities, values, goals, and roles, as well as the knowledge that we exist as individuals” (Stangor et al., 2014, p. 109). The self-concept of each individual has a great effect on a person´s thoughts, feelings and behavior (Stangor et al., 2014), therefore it is important to understand the person´s basic characteristics before talking to them about specific topics such as advertising. There are many theories that try to explain people´s attitudes or draw connection between attitudes and behaviors, often to predict behavior.
2.3 Attitudes toward advertising
Now that attitudes in general have been discussed, this chapter will provide a deep dive into studies of attitudes toward advertising. From a broader perspective such as attitudes toward digital advertising and advertising in general to more specific perspectives such as personalized and location-based advertising along with the factors these studies took into consideration and found to influence consumer attitudes.
2.3.1 Attitudes towards advertising in general and digital advertising on different devices
Tan and Chia (2007) established that consumers´ attitudes toward advertising in general have a corresponding influence on attitudes towards advertising on television. In addition, Beneke et al. (2010) found that a positive attitude towards advertising in general suggests a positive attitude towards mobile advertising as well. Moreover, Yang (2003) proposes that consumer´s attitudes and beliefs regarding online advertising are similar towards traditional advertising. The theory of cognitive dissonance is in line with the above findings, meaning that individuals require keeping their cognitive system harmonized by “integrating a single attitude into an individual’s attitudinal system” (Bauer et al., 2005, p. 184). Therefore, in this thesis it is considered that the individuals´ relationship towards advertising in general may influence their attitude towards advertising on smartwatches.
Advertising value is another aspect that may influence consumers´ attitude and behavior towards advertisements. Previous studies have confirmed a positive effect between the value gained from advertising and the consumer´s attitude and behavior (Ha et al., 2014; Taylor et al., 2011). Ducoffe (1995, p. 1) in his model of attitude towards web advertising defines advertising value as the “subjective evaluation of the relative worth or utility of advertising to consumers”. Furthermore, Ducoffe (1995) proposes that advertising can offer information and
17 entertainment value, which together with the level of irritation occurred account for the overall construct of advertisement value. Brackett and Carr (2001) extended upon various attitude models of Internet advertising (MacKenzie & Lutz, 1989; Ducoffe, 1996; Shavitt et al., 1998). The final model (see Figure 2) consists of informativeness, entertainment, irritation, and credibility as factors effecting the advertising value, which together with demographic variables results in the attitude toward advertising. Advertising has traditionally been mainly used to inform consumers about a specific product, company or sale (Lavidge & Steiner, 1961), which makes the component “informativeness” correspond strongly with the overall value of the advertisement (Ducoffe, 1996). What informativeness in the advertising value means has been identified through over 14 different cues, for example having a price, offer or sale in the messaging or advertising products that the specific consumer is interested in can be perceived as informative (Ha & McCann, 2008). Entertainment refers to the degree to which the individual finds the advertisement enjoyable or pleasing (Ducoffe, 1996). This could mean a variety of elements, for example creativity within the advertisement such as humorous or dramatic story telling. Irritation is considered another factor that effects the value of an advertisements (Ducoffe, 1996). Irritation can occur in several ways, such as due to content disruption or because the specific advertisement is confusing. Credibility refers to the trust toward the advertised product, service or company (Brackett & Carr, 2001). On the other hand, this model does not take factors such as the sender of the advertisement or the medium itself into consideration, which in the case of advertising on smartwatches might have an effect on the user´s attitude. Still, entertainment, informativeness, irritation and credibility are considered important factors and will be among the keywords that the interview guide will be based on for this research.
18 Attitudes towards advertising have also been explored through the technology acceptance model (TAM). The model consists of the following elements: perceived usefulness, perceived ease of use, attitude, intention, and use (Davis, 1989; Davis et al., 1989). This model was originally used for studying how people use technology and what makes them accept it. However, it has also been employed to study acceptance towards SMS advertising. TAM undertakes SMS advertising primarily as a technology with the focus being on the service´s perceived usefulness and ease of use (Bakr et al., 2019). SMS advertising could be similar to advertising on a smartwatch, since the space for imagery or text is limited on both. Therefore, the perceived usefulness and ease of use could be important aspects of advertisements on smartwatches and will be among the keywords that the interview guide is based on. However, further components affecting attitude could include the credibility of advertiser, online personalization or enhancing one´s social image (Wiese et al., 2020).
2.3.2 Personalized advertising and the importance of relevance
The goal of advertisers has always been to target their consumers in the most effective way; by providing advertisements that are in the right context, relevant and might be of interest to the chosen audience. From advertising to the masses and to target groups, marketers are now able to tailor their messages directly to the individuals due to the rise of mobile devices (Banerjee & Dholakia, 2008). On the other hand, the large amount of advertisements can be overwhelming, which can make it challenging for further advertisements to get across to the consumer (Ha & McCann, 2008). Personalization, profiling, individualization, segmentation and behavioral targeting are some of the tools advertisers use to reach their consumers on a deeper level (Bauer & Strauss, 2016). Personalization refers to adapting advertisements to the needs, interests, knowledge of the consumers among other consumer attributes (Zimmermann et al., 2005). Segmentation, on the other hand means to split the mass market into different segments, which helps advertisers tailor their messaging to the specific identified groups. The occasion of an individual being approached with tailored content is known as individualization (Reutterer et al., 2006). In profiling (Bilenko & Richardson, 2011) the content of the advertisement is shaped by further information on the given consumers that includes search and browsing history, purchase patterns or attributes from the consumers’ profiles. Behavioral targeting (Yan et al., 2009) concentrates specifically at serving advertisements based on current or past behavior of a consumer. Context adaptation (Bauer & Spiekermann, 2011) in addition to consumer attributes, also takes into consideration consumers’ context such as the physical
19 environment in a certain situation. Vesanen (2007) proposes a framework that includes these overlapping terms and concepts called “the many faces of personalization”. On the other hand, these terms can be differentiated based on whether they are person-centric or situation-centric but as discussed, some of the concepts combine both approaches (Bauer & Lasinger, 2014). Furthermore, smartwatches may provide new opportunities for marketers to tailor their advertisements, such as the usage biometric data and data from connected devices (IoT network) as described in the last section of the Smartwatch Universe section of the literature review.
One could argue, that the more personalized the advertisement content is, the more relevant it is for the consumer. Schapsis and Chiagouris (2019) proposed that all other factors (e.g., technological, contextual factors) that could affect the consumer´s attitude toward mobile advertising are unimportant compared to the relevancy factor. They suggest that relevancy is a mediating factor, which can be considered to include certain factors that may describe the consumers´ actions regarding redeeming an offer on a mobile device. Relevance in that study means geographical context which includes time, place and activity and benefit which relates to a direct utility (e.g., discount) to the consumer. Relevance to the consumer has also been referred to as personal relevance, which is defined as the degree that the consumer understands the advertisement to be self-related or in some way helps them reach their personal goals and values (Celsi & Olson, 1988). In addition, Campbell and Wright (2008) has found that relevance has a bigger effect in online interactions compared to other types of media like radio or television.
2.3.3 Location-Based Advertising
One way to break through the advertisement clutter is via location-based advertising, where the content of the advertisement is tailored to the place, where the consumer receives the advertisement (Banerjee & Dholakia, 2008). In other words, location-based advertising is a type of direct marketing that identifies a consumer's location and provides location-specific ads to them (Bauer & Strauss, 2016). Some of the first location-based advertisements were billboards by roadsides, with specific messages based on location (e.g., ‘Turn right to McDonald’s’) (Bauer & Strauss, 2016). However, with the rise of mobile devices, location-based advertising can now be used to target consumers individually in real time at their current location. Also, due to the technological advancements such as mobile and wearable devices
20 being equipped with GPS or other location-identifying signals, for example from on-device IDs to Wi-Fi, cell towers, beacons - consumers can be reached rather easily (Molitor et al., 2016). Furthermore, as mobile devices are carried with the individual most times if not always, they can act as distribution channel for advertisers (Bauer & Strauss, 2016). As Bruner and Kumar (2007, p. 4) suggests, “we are so dependent on the devices that we may feel we cannot function well without them”. Furthermore, Park (2005) writes that these devices are “addictive” to several people. As technology develops and new gadgets, wearables like smartwatches, smart devices appear, these concepts by Park (2005) and Bruner and Kumar (2007) are possibly only getting more relevant as time passes. Location on wearable devices like smartwatches is highly proximate as the user carries the device with them, which provides numerous opportunities for marketers. As consumers move, the closeness to possibly relevant stores shifts, which marketers may use to adapt advertisements in real-time (Bauer & Strauss, 2016). Therefore, relevant location information is not only of the consumers’ but also of other elements in the area that are relevant to the service (Paay & Kjeldskov, 2008).
Location-based advertising can be classified into two categories; the push or pull approaches (Limpf & Voorveld, 2015). During the push approach, advertisers use carriers and delivery networks to provide advertising messages without the consumer asking for the information. The push concept allows the consumers to opt-out or opt-in for the service (Bruner & Kumar, 2007). The opt-out version indicates that advertisers send ads to anyone, until the individual decides that they do not want to receive further ads. However, the opt-out method has not been legal in Europe. Marketers are required to obtain permission from their consumers before sending them advertisements (Bruner & Kumar, 2007). The opt-in version would require the consumer to enable advertisements to be sent to them. On the contrary, during the pull approach consumers actively search for certain information or use a dedicated service and as a result receive an advertising message. As the consumer decides the time and place to acquire the information in the pull approach, only the opt-in version is present (Bruner & Kumar, 2007).
There are a few studies about user acceptance of location-based advertising on mobile phones such as Kini and Suomi (2018) and Bruner and Kumar (2007) or how user acceptance is influenced by privacy concerns, such as the study of Limpf and Voorveld (2015). The mentioned studies used online quantitative/qualitative surveys and experiments to investigate the acceptance and privacy concerns of users. Bruner and Kumar (2007) establishes that the basic key attitudes relevant to advertising need to be used in research when exploring the advertising effects on behavior: toward-advertising-in-general (Aadv),
attitude-21 toward-the-medium (Am), and attitude-toward-the-ad (Aad). Based on this, this study could explore the Aadv, then the medium (smartwatches) and Aad could represent the push and pull approaches of location-based advertising. Lutz (1985) identified that Aadv is one of the primary determinants of Aad. Still, attitude-toward-the-medium has been proposed to have a stronger and more immediate effect on attitude-toward-the-ad (Stewart & Ward 1994). Therefore, smartwatches as mediums are an interesting contrast to test the acceptance of location-based advertising on. Bruner and Kumar (2007, p. 5) proposes a more specific scale to study attitudes and acceptance towards location-based advertising, the Alba scale that stands for “a person’s general predisposition toward commercial messages that are received on a personal mobile communication device and customized for one’s geographic position”. The ten items (see Appendix A) in the survey specific to measuring Alba will be taken into consideration when the interview questions are formulated for this study. Kini and Suomi (2018) investigated university students of Finland and USA, Bruner & Kumar (2007) investigated undergraduate students, while Limpf and Voorveld (2015) surveyed participants between 18 to 63 years. In addition, findings from the mentioned papers included that depending on the type (push- pull) of location-based advertising, users acceptance varied but the acceptance also was dependent on their privacy concerns (Limpf & Voorveld, 2015). Limpf and Voorveld (2015) found out that information privacy concerns have a negative effect on acceptance of location-based advertising. However, this effect was mostly visible in the event of push advertisements. Furthermore, the study revealed that “consumers' attitude toward mobile location-based advertising is directly and positively related to their intention to accept mobile location-based advertising” (Limpf & Voorveld, 2015, p. 119). This finding is in line with the theory of reasoned action (Ajzen & Fishbein, 1980) together with the technology acceptance model (Davis, 1989) applied in the study. Information privacy concerns were measured based on the following categories: collection, control, and awareness. At last, Bruner and Kumar (2007) point out that even relevant and right in context location-based advertising messages could be regarded as spam. Therefore, it is necessary to further investigate user acceptance and perception of location-based advertising.
2.3.4 Contextual factors
Context could be an important factor when studying advertisements on smartwatches since the device is on the user´s body at most times during the day. Previous literature defines context as “Any information that can be used to characterize the situation of an entity. An entity is a
22 person, place, or object that is considered relevant to the interaction between a user and an application, including the user and applications themselves” (Dey & Abowd, 2000, p. 3). Context has been found to positively enhance the predictions to how user´s will respond to location-based advertisements on mobile platforms (Molitor et al., 2016). Molitor et al. (2016) examined four different types of context: distance to location, time, weather, and the number of co-located users. Based on 61,690 observations, it was concluded that: (1) consumers have various time-specific preferences, (2) distance negatively effects consumer choices, (3) the number of co-located users are negatively influencing the choices the consumer might make and lastly, (4) temperature is also negatively effecting the consumer’s choices. Orazi & Nyilasi (2019, p. 2) talk about challenges for advertisers to test what advertisements are more effective and call out “profiling the target audience in a reliable and time-efficient manner” and “delivering the tailored message at the right time”. Location data can help advertisers for example to determine the daily routine of individuals and it is dynamic, therefore it may help attacking these issues. Lee (2010) studied the factors that affect consumer attitudes towards location-based advertising and whether situational contexts together with advertising style have an influence on these factors. The factors explored in the study (see Figure 3) are entertainment, informativeness, irritation, personalization and privacy concerns (Lee, 2010). Li et al. (2002) studied situational contexts and established that when consumers reported themselves to be busy, they experienced a higher level of disturbance caused by the advertisement, while they had more positive attitudes when they were unoccupied. Lee´s (2010) findings expanded upon this and found that when consumers regard themselves busy, location-based advertising content needs to be interesting and personalized to reach the best result, while a non-busy state of mind requires a fun and informative content. In addition, the study concluded that entertainment, personalization and privacy concerns have direct influence on consumer attitudes (Lee, 2010).
Figure 3: Findings (Lee, 2010) Figure 5: Findings (Lee, 2010)
23 At last, several studies (e.g., Bruner & Kumar, 2007) suggest that further research needs to be carried out on other types of devices such as wearables computing devices (e.g., smart watches).
2.3.5 The aspect of privacy
Zuboff (2019, p. 16) among others writes about surveillance capitalism and suggests that “surveillance capitalists know everything about us, whereas their operations are designed to be unknowable to us”. Furthermore, she compares the industrial civilization´s damage to nature, to what surveillance capitalism could do to mankind: the cost of our humanity. Location data, together with health and behavioral data could pose privacy concerns for smartwatch users. As discussed above, Limpf and Voorveld (2015) found that user´s information privacy concerns have a negative effect on acceptance of location-based advertising, more specifically in the case of push advertisements. In addition, Schade et al. (2016) has come to a similar conclusion, that privacy concerns are an important factor to consider and that it has a negative effect on the user´s intention to use location-based advertising. Privacy concerns in the study of Schade et al. (2016) included brand trust and self-efficiency, with brand trust having a bigger effect. In the previous research about advertising and privacy concerns, the personalization-privacy paradox is an important theory. Awad and Krishnan (2006) explains it as the desire to receive personalized content while being resistant to sharing one´s information online. On the other hand, the privacy calculus theory suggests, that individuals consider the perceived benefits against the perceived risks and based on this determine whether they share their personal data (Laufer & Wolfe, 1977).
Previous research showed a negative connection between privacy disclosure and age. As age increases, so does privacy concerns and sharing sensitive information is less common (Li et al., 2015; Litt, 2013). In addition, consumers might have more privacy concerns when they feel that an advertisement is intrusive (Bauer et al., 2005). One of the reasons for this intrusiveness may be control; control over receiving advertisements and sharing personal information (Wiese et al., 2020). Control over receiving advertisements is normally understood as “opting-out” or “opting-in”. Providing consumers with control over the utilization and handling of their information can influence the consumers´ trust in online brands (Culnan, 2000). Trust is perceived as a crucial element in the relationship of consumers and brands (Morgan & Hunt, 1994). Overall, privacy is an aspect that should be included in this study for several reasons, such as smartwatches are connected device and they accumulate data from the user´s connected
24 devices and that a huge number of previous research has included the privacy aspect in their studies and found to have impact on user´s attitudes.
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3. Methodology
This section describes the methods and procedures that were applied on the thesis, to address the research question and sub-question set in the problem formulation section of the Introduction chapter along with the explanation of why these procedures were found suitable to reach the aim of the study.
3.1 Qualitative Research
The study is a qualitative research, seeking to explore smartwatch users´ attitudes towards location-based advertising on smartwatches and the factors that influence these attitudes. Furthermore, the study aims to discover the general perception regarding location-based advertising on smartwatches. As qualitative studies focus on meaning and words, it is appropriate to be employed when the researcher aims to explore or understand the attributes of individuals towards a certain problem or phenomena (Creswell & Creswell, 2018). By selecting a qualitative research methodology, the researcher aims to gain a deep and holistic overview of the topic and “focus on individual meaning, and the importance of reporting the complexity of a situation” (Creswell & Creswell, 2018, p. 43). Due to the lack of previous research in the topic and as currently there is only a few examples of smartwatches being used for marketing/advertising purposes, the topic needs to be investigated in depth which a qualitative approach is most suitable for. Furthermore, during this research an abductive approach has been employed. Instead of progressing from data to theory or theory to data, the abductive approach moves back and forth and combines these two different processes (Saunders et al., 2012). While there is a vast amount of information about attitudes towards location-based advertising on mobile devices, there is no sufficient information in the context of smartwatches. Saunders et al. (2012) suggests following an abductive approach in such cases.
3.2 Research through Design
The research through design approach often involves the use of prototypes as a research tool “to produce a contribution of knowledge” (Zimmerman et al., 2007, p. 494). In this study, employing a certain prototype is necessary since the investigated phenomenon has not been experienced to a high degree by smartwatch users. Throughout this research, the 3I model (Brown & Wyatt, 2010) has been applied. The three 3I model stands for: Inspiration, Ideation,
26 and Implementation. Within Inspiration, the goal was to understand user´s needs, how they perceive advertisements on smartwatches and what could affect their attitudes. In the Ideation phase, the aim was to extend the findings of the Inspiration phase and build the prototypes based on the knowledge gained. Finally, in the Implementation phase the prototypes were used to test the factors already established from the interviews, explore additional factors, to discuss and test the experience of receiving location-based advertisements on smartwatches. As part of the model, there are certain trigger questions and perspectives to consider. The aim of these is to help in the progress of the given project. The 3I model is a tool within Design Thinking. As Sims (2013, p.12) explains: “Design thinking provides a set of creative methodologies for solving problems and generating ideas that is based on building up solutions, rather than starting with the answer.” Furthermore, design thinking is a mindset where the researcher emphasizes with the target group (smartwatch users) while designing for and with them (Sanders & Stappers, 2014).
3.3 Data collection overview
The planned data collection method consisted of three parts; first semi-structured interviews were conducted, then prototypes were created and at last focus group sessions were organized (see Figure 4). Semi-structured interviews allow the researcher to pose open-ended questions with the possibility of follow-up queries (Adams, 2015). Furthermore, during semi-structured
Figure 4: Methodology process
interviews the researcher is open to discover unforeseen issues or themes, which is especially useful when a topic such as advertisements on smartwatches has not been established (Adams,
27 2015). Based on the interview results, which offered an insight of what is important to smartwatch users when receiving advertisements on their devices, the prototypes were defined and developed using design thinking and one of its most popular models, the 3Is as explained above. The aim of the prototypes was for the participants to experience and interact with location-based advertisements on smartwatches. The next step in the research was conducting focus groups. During the focus groups, smartwatch users tested, discussed, and provided feedback on the prototypes. Focus groups offer an opportunity to listen and learn from people (Morgan, 1998) which is valuable when the goal is to study discussions, thoughts, perceptions and attitudes among multiple participants. Furthermore, they provide the opportunity to gather information from multiple individuals at the same time, which was useful for further discussing the research topic and develop the prototypes. After each focus group session, the prototypes have been refined and further developed. The final version of the prototypes may inspire and offer marketers four concepts of how advertising on smartwatches could look like, which were iterated with the valuable insights and opinions of smartwatch users. Therefore, the prototypes serve not only as research instruments, but as the final proposed concepts for marketers and advertisers alike.
3.4 Inspiration: Semi-structured interviews
The first phase Inspiration for this thesis meant the exploration of the current literature belonging to the topic and the interviews with smartwatch users, which together provided the starting point. This phase is for establishing and exploring the design problem or opportunity (Tschimmel, 2012). In this case, the opportunity was the possibility of having advertisements on smartwatches while the design problem represented the smartwatch users’ perspective. In this stage, the way smartwatch users use their smartwatch, their relationship to their device, what they think of the idea of advertisements on their smartwatches and what the barriers are or causes of irritation were explored through the use of scenarios. The aim of the interviews was to provide an outlook on the user's attitude of location-based advertisements on smartwatches and explore what affects their attitudes. As Kvale (1996, p. 6) explains, the purpose of semi-structured interviews is to “obtain descriptions of the life world of the interview with respect to interpreting the meaning of the described phenomena”. During the semi-structured interviews, the main concepts and findings from the literature review were discussed. More specifically, the following keywords have been employed in the making of the interview guide:
28 attitude toward smartwatch, smartwatch usage, personalization, privacy, credibility,
irritation, entertainment, informativeness, context, attitude towards advertising in general, channel acceptance, perceived ease of use and perceived usefulness
The interview guide can be viewed under Appendix B. First, the interviews started with information about the demographics of the participants such as age, occupation, and education. After that, the conversation moved on to the smartwatch users´ relationship with their smartwatches, such as how they use it, what type of smartwatch they have, how they move between their smartwatch and smartphone. Then, different location-based advertisements were discussed such as push and pull types of ads through four different scenarios (See Table 2). The scenarios were based around the information gathered from the literature review and the keywords that the interview guide was based on. Within each scenario, different elements were used to trigger a variety of responses such as forms of personalization (location, health, and data from connected devices), information (discount or advertisement value), credibility (known or unknown brand) and privacy concerns. Furthermore, the scenarios served as testing ground for the prototypes. Through the scenarios, receiving advertisements on a smartwatch could be discussed, leaving the prototyping phase more open to be based on what was discovered during the interviews. The usage of scenarios is beneficial when the person has not experienced the situation that is being studied. As the interviews were semi-structured, the interview guide was not followed strictly, but throughout the sessions all keywords were covered.
Scenario 1 It is Saturday afternoon; you have just finished your workout at your local gym. You start walking out of the gym, when you receive a notification from your favorite food delivery app on your smartwatch, offering you a 10% discount for a nearby take away restaurant you have previously visited and enjoyed.
Scenario 2 It is one of those days, when you wake up and everything just goes wrong. The morning traffic was annoying, the coffee machine does not work at work and you just are not feeling it. Your smartwatch has been detecting your mood throughout the day by analyzing your heartbeat and biometric data and knows that this is not your day. At 5pm you are off work and you receive a text on your smartwatch with the following message from the Tea house you do not know near your work: Come by Tante Tea to wind down; we will treat you with a free sweet for any coffee or tea orders. Scan the barcode at the cashier. BARCODE
Scenario 3 It is Sunday morning and you are having a picnic brunch with your friends. Meanwhile, one of your smart light bulbs need changing, but you forgot to buy a new one for a couple of days.
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During the picnic, you receive a text from a nearby popular electronic store on your smartwatch: Smart lights, smart locks, smart anything come by our store and explore our range of powerful tech.
Scenario 4 You are in the city center with your family, wondering around, shopping and having fun. You start to get hungry and you ask the voice assistant on your smartwatch to search for Thai restaurants nearby. The first 5 restaurants are shown, all within 500m of walking distance. Next to the names of the restaurants you a see a disclosure saying “Ad”. You select one of the restaurants and a map is provided as well as an offer of a free appetizer, good for the next hour.
Table 2: Scenarios used during the interviews
The interviews were audio recorded. A total of 10 interviews were conducted, each ranging between 30-60 minutes. The interviews were conducted online, eight of them through Skype and two of them through Microsoft Teams due to a global pandemic (COVID-19) that did not allow for physical meeting. The interview participants were asked whether they wish to participate in the focus group sessions. At last, before the first interview a pilot interview was scheduled with an additional smartwatch user to test the interview guide.
3.4.1 Data analysis
The data analysis took place through transcribing the interviews and using a data analysis tool called NVivo1. NVivo was created to analyze qualitative and mixed methods research data. The transcripts were imported into NVivo for further analysis and creation of categories, themes and identifying patterns. The coding procedure happened through using a combination of emerging and a set of predetermined codes (keywords identified from the literature review). Creswell and Creswell (2018) suggest to use predetermined codes when the researcher has certain distinct theories to examine in regards to the researched phenomenon. The vast amount of research and theories within the field of advertising and location-based advertising provide valuable base information for this research. Since smartwatches have not been examined as a medium for advertising, it could be beneficial to test against the chosen keywords while being open to any emerging categories. The findings of the interviews provided the base information for the prototypes. The prototype development greatly benefitted from the understanding of how users feel and what the most important aspects are when they receive advertisements on their smartwatches.
30 3.4.2 Participants
The participants were recruited from the research´s social network with the criteria of owning a smartwatch. Therefore, the main sampling methods were purposive and convenience sampling. Some participants took part in both data collection methods, the overview can be seen on Table 3, lower below. The researcher aimed to interview between 5-10 people, based on when themes and categories are saturated. Saturation is the point in the research when gathering fresh data does not provide any additional insights or uncovers new properties (Creswell & Creswell, 2018). Saturation was reached after the 10th interview. The sample of the interviews includes 5 men and 5 women. The participants were between the age of 27 to 44.
3.5 Ideation: Prototype
Based on the insights developed from the data analysis of the interviews, the next phase of the research process was about Ideation. This space is for exploring solutions or opportunities for change (Tschimmel, 2012). As the main and most important factor that came up throughout the interviews was relevancy and being able to provide feedback on the advertisement, it was necessary to focus on this during the prototyping process.
The starting method to come up with different solutions was through laying out all the collected information and through brainstorming. The brainstorming was done by the researcher, focusing on the most important themes and information that emerged from the interviews. During the brainstorming phase, different ideas came up such as developing an application where smartwatch users set up their own advertising profile to receive tailored advertisement or to have the option to provide feedback directly on the advertisement. The selected idea was the possibility of giving feedback directly on the advertisement. However, as advertisements could be in the forms of notifications-text messages, inside an application or through search results on the smartwatch, it was critical to develop multiple prototypes that take these different formats into consideration as they most likely require different approaches. Furthermore, based on the information collected, most participants used their smartwatch for activity tracking, reading news, receiving notifications from various applications coming from their smartphone or smartwatch and voice searches. Therefore, the advertisements were decided to take place in these actions. Also, as not all participants were comfortable with the usage of health and data
