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Attitudes toward mobile search ads: a study among Mexican millennials

Article in Journal of Research in Interactive Marketing · January 2017

DOI: 10.1108/JRIM-06-2016-0061

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 Attitudes toward mobile search ads: a study among Mexican Millennials

Author Accepted Manuscript (Post-print)

Enrique Murillo

Department of Business Administration

ITAM - Instituto Tecnológico Autónomo de México
Río Hondo No. 1
Mexico City, 01080, Mexico

The support of Asociación Mexicana de Cultura, A.C. is gratefully acknowledged, as is the

invaluable support of research assistants María Fernanda and María José Ocampo.

Suggested Citation:

Murillo, Enrique. "Attitudes toward mobile search ads: a study among Mexican millennials."
Journal of Research in Interactive Marketing 11, no. 1 (2017): 91-108.

1
 Attitudes toward mobile search ads: a study among Mexican Millennials

Abstract

Purpose

This study conducted a survey of Mexican Millennials to measure the extent of negative bias and
perceived advertising value they experienced towards the ads they encountered while performing
search for local products and services from their smartphones.

Design/methodology/approach

Using a paper survey with a scenario question, responses were collected from 1215 Millennial
smartphone owners about the strategies they used for scanning mobile search organic and
sponsored results and quickly reaching the information they needed when performing mobile
search. The 315 participants who reported clicking on ads were further surveyed on their
perceptions of ad informativeness, entertainment, irritation and credibility. These constructs were
used as predictors of advertising value in a structural equations model which was estimated with
Partial Least Squares.

Findings

A substantial bias against sponsored results was found, with two-thirds of respondents skipping the
ads when performing mobile search from their smartphones. However, 28.2% reported clicking on
the most relevant result without regard to it being organic or sponsored, and an additional 5.6%
reported clicking on an ad as their first strategy. In the structural model, all four hypothesized
antecedents of advertising value were significant and some gender differences were detected.

Practical implications

With the increasing penetration of smartphones, and rapid growth of mobile search, these results are
particularly relevant for local merchants, who can use mobile search ads to leverage their location
and communicate with searching consumers at the precise moment when they are most receptive to
timely and relevant advertising.

Originality/value

This study is the first to measure the extent of consumer bias against sponsored results in mobile
search, and the first empirical estimation of the advertising value of mobile sponsored results.

Keywords: search marketing, mobile advertising, Millennials

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Introduction

The use of search engines from mobile devices, or mobile search, has been growing rapidly in
recent years closely tracking the rising penetration of Internet-enabled smartphones around the
world. A recent study estimated total worldwide count of smartphone users will exceed 2 billion in
2016 (Emarketer, 2014). In the USA, four out of five mobile phone users will access the internet
regularly during 2016 using a mobile phone (Emarketer, 2016).

Internet-enabled mobile devices represent a paradigm shift in e-commerce, blurring the lines
between online and offline commerce, because consumers are increasingly checking online reviews,
prices, promotions and availability while in-store (Chung and Holdsworth, 2012; Brynjolfsson et
al., 2013; Emarketer, 2015). The ability to perform mobile search is the key enabler of this
heightened consumer sophistication, which is most prevalent among young adult, or Millennial
consumers (Razorfish, 2015). Furthermore, the growing habit of consumers to search for local
products or services while “out and about”, creates new opportunities, especially for small
merchants, who can leverage their location using mobile search ads to reach geographically
proximate consumers searching for their products or services.

Search engine companies like Google and Bing generate revenue by displaying keyword-targeted
advertising in the search engine results page (SERP), and charging advertisers when the user clicks
on these ads which are called “sponsored results”. On a desktop or laptop screen, the SERP is
typically divided into top, left and right sections, with top and right containing sponsored results,
and the left containing unpaid organic results, which are the results from the search engine’s
proprietary algorithm. In the smaller phone screen, there is only room for a top and bottom section,
with the top containing 2-3 sponsored results, and the bottom containing just 1-3 organic results.

Because consumers have reason to view paid advertising as biased, the US Federal Trade
Commission has publicly warned search engine companies to clearly differentiate sponsored from
organic results in the visual design of their SERP’s (FTC, 2013). However, since search engines
only earn money from clicks on sponsored results, compliance to these voluntary guidelines has
been lukewarm, and studies show that many search engine users click on paid ads mistaking them
for organic results (Ofcom, 2016).

User attitudes toward sponsored results in desktop-sized SERP’s have been studied before (Jansen
et al., 2007; Lin and Hung, 2009), but are largely unexplored for mobile search, which already has
surpassed desktop search volume (MacMillan, 2015). Accordingly, this study set out to measure the
extent of bias and perceived advertising value in mobile sponsored results among Millennials
performing e-commerce searches from their smartphones.

Organic versus Sponsored Search Engines Results

People increasingly rely on Internet search engines to find the products and services they need
(Rangaswamy et al., 2009). Millennials are more likely to find the information they need by
searching on the Internet (Veloutsu and McAlonan, 2012), and they trust search engines in general,
and Google in particular, to provide them with relevant and unbiased results (Veloutsu and
McAlonan, 2012; Pan et al., 2007; Fallows, 2005).

Even though Internet search engines create enormous economic value (Bughin et al. 2011), they
have not always been successful in generating revenues from their service. Google, the market
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leader, began selling text ads in 2000 through its AdWords platform (Google, 2000). These ads
would appear as sponsored results on the right side of the SERP. However, as with banners and
pop-ups, users soon learned to recognize entries on the right column as paid ads, and therefore to
ignore them or to examine them with distrust and/or defensive processing (Darke and Ritchie,
2007).

Still, a 2005 survey by Pew Research concluded that many American users were naïve about search
engine results, and 62% were unaware of the distinction between organic and sponsored results
(Fallows, 2005). A more recent nationwide study by Ofcom, the communications regulator in the
UK, found that 51% of search engine users aged 16+ “were unable to correctly identify adverts or
sponsored links in a results page of a search engine” (Ofcom, 2016, p. 8).

The key difference between organic and sponsored results is that search engines will not accept
payment from websites to achieve a better position in the organic results (Google, 2016). Their
brand promise to users is that they will return the most relevant Internet results to the typed query,
and results will not be biased by payments from website owners. By contrast, all entries in the
sponsored results section are displayed because advertisers have offered to pay the search engine
for every user that clicks on their sponsored result. In other words, they are paid ads, which is why
users perceive them as less trustworthy than organic results.

User bias against sponsored results has been documented in several studies. Jansen et al. (2007)
used an experimental design to control for the quality of organic versus sponsored results, and for
the quality of the landing page they linked to. They then measured the clicking behaviors of 56
college students as they performed several e-commerce searches. Results showed that Millennials
examine organic results ahead of sponsored results 82% of the time, thereby revealing a bias against
the latter. However, 73% of participants looked at both organic and sponsored results, and a major
reason they gave when they did click on a sponsored result was that it seemed relevant for a
purchase they wanted to make.

Owens et al. (2011) performed an eye-tracking study of 25 college students performing an

informational task on a desktop search engine. They found that users tended to ignore sponsored
results displayed on the right side of the page and also, though less so, on the top of the page. The
study concludes search ads are subject to the same "blindness" effects as banner ads.

Kobylanski (2012) examined attitudes toward organic and sponsored results using two consecutive
online surveys with 71 undergraduate business students. Although sample size is a concern, the
study found that Millennials are either unaware of (8.8%), or indifferent to (57.4%), the difference
between organic and sponsored results, with the majority not biased against the latter. However,
when actually asked to compare organic versus sponsored results, respondents rated the latter as
having lower informativeness and credibility than the former.

These studies focused on desktop search, but eye-tracking research has shown that the small screen
size of mobile phones changes the way users interact with mobile search results. Kim et al. (2012)
used an experimental design with four groups of eight users each who performed 20 search tasks,
half of them on a desktop and half on a mobile screen. The users’ scanning behavior of the SERP’s
was measured using eye-tracking. This showed that users spent more time on the first three results
of the SERP when using the mobile screen than the same results on the desktop screen (76% versus
67%). Moreover, users rarely scrolled on the small screen, hence results below the first three

4
received very little attention, even though users spent more time on the mobile SERP than the
desktop.

Djamasbi et al. (2013) performed eye-tracking on a 16-user sample of Millennials performing two
smartphone search tasks, one searching for free software, the other for a local place to eat. These
searches resulted in SERPs with 2, 1 or 0 ads. When ads were absent, the first result was viewed by
100% of users, the second by 86% and the third and last by 14%. When ads were present, 82% of
users paid attention to them, suggesting users do not turn a blind eye to search ads (Owens et al.,
2011). However, when more than one ad was present, most users skipped the second ad to look at
the organic result below.

All these studies examined user reactions toward sponsored results when explicitly compared to
organic results. Regarding attitudes toward the sponsored result itself, Lin and Hung (2009)
measured the perceived advertising value of desktop sponsored results using a survey of 711
Internet users from Taiwan (66% were students). Results showed that the perceived credibility of
the sponsored result was the factor that most influenced users’ assessment of advertising value,
ahead of informativeness and entertainment.

In sum, previous studies of desktop search show that Millennials performing e-commerce queries
have a negative bias against sponsored results, but still examine all available results, and are
receptive to ads they perceive as relevant to the query. Furthermore, when assessing the ad itself,
they give the greatest weight to the credibility dimension, which is consistent with consumers’
general distrust of advertising identified as such (Darke and Ritchie, 2007).

Mobile search has not been similarly studied, despite sizable differences in desktop versus mobile
SERP’s, and the explosive growth of smartphones and mobile search (Emarketer, 2014; MacMillan,
2015). Therefore, this research will attempt to measure both the extent of negative bias toward
mobile sponsored results, and their perceived advertising value, in the context of mobile e-
commerce searches performed by Millennials.

Theoretical Model and Hypotheses

Consistent with extant literature of advertising in digital platforms, our study uses the model of
advertising value proposed by Ducoffe (1996). Advertising value is defined as “a subjective
evaluation of the relative worth or utility of advertising to consumers” (Ducoffe, 1995, p. 1). In
developing the construct’s antecedents, Ducoffe drew on media uses and gratifications theory
(McQuail, 1983), which argues that media users expose themselves selectively to media based on
their needs and gratification-seeking motives, thereby satisfying their utilitarian and/or hedonic
needs. Modern consumers are flooded with advertisements and must evaluate which ads are worth
their scarce attention. Ducoffe (1996) proposed perceived informativeness, entertainment and
irritation as antecedents of advertising value, which in turn had a positive association with attitudes
toward web advertising. Brackett and Carr (2001) proposed credibility as a fourth predictor of
Internet advertising value, and found direct effects between three of the antecedents and attitude
toward web advertising. We use this formulation as our base model, as displayed in Figure 1. The
various constructs, and the hypotheses we tested are described next.

(( Figure 1 ))

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Informativeness. Previous studies indicate the primary function of advertising is to convey
information about products and services to allow consumers to make the best possible purchase
decisions (Schlosser et al. 1999). To the extent that consumers perceive an ad to provide useful and
relevant information they are more likely to perceive the ad as valuable (Ducoffe, 1996). Indeed, it
is likely that this effect will be more pronounced in mobile search when searching for local products
or services, because the user is often pressed for time and requires a solution to a specific need.
Hence, our first hypothesis:

H1: The perceived informativeness of the mobile search ad is positively associated with its
perceived advertising value.

Entertainment. Since advertising represents a substantial proportion of all media content,

consumers are more likely to positively evaluate an ad when they perceive it to be entertaining
(Ducoffe, 1995). Research based on the uses and gratifications framework indicates that the
entertainment value of advertising content lies in its ability to fulfill consumer needs for escapism,
diversion, aesthetic enjoyment or emotional release (McQuail, 1983). Therefore, we propose:

H2: The perceived entertainment of the mobile search ad is positively associated with its
perceived advertising value.

Irritation. Consumers are sometimes irritated by advertising tactics they find annoying, offensive or
overly manipulative (Ducoffe, 1996). Furthermore, the amount of advertising Internet users are
exposed to nowadays can also result in irritation (Kim and Sundar, 2010; Tassi, 2013). In the
mobile search context, sponsored results can sometimes crowd organic results out of the first visible
screen (Sullivan, 2013). In other words, due to the small screen size, ads can amount to a larger
percentage of displayed returns in a phone screen as compared to the desktop (Kim et al., 2012),
and therefore can be more irritating for users. This leads to our third hypothesis:

H3: The perceived irritation of the mobile search ad is negatively associated with its
perceived advertising value.

Credibility. Brackett and Carr (2001) proposed credibility as a fourth antecedent of advertising
citing its prevalence in other models (Eighmey, 1997; MacKenzie and Lutz, 1989). In their study of
web advertising value among college students (n = 421) they found credibility did increase the
predictive power of the Ducoffe model. Other studies have also found credibility to be significant
(Lin and Hung, 2009; Liu et al., 2012). Hence, we postulate:

H4. The perceived Credibility of the mobile search ad is positively associated with its
perceived Advertising value.

In Ducoffe’s (1996) original formulation, the value of advertising positively influenced attitudes
toward general Internet advertising. Therefore, we posit:

H5. The perceived value of the mobile search ad is positively associated with the attitude
toward mobile search ads.

Moreover, Ducoffe (1996) proposed that entertainment had a direct and positive effect on attitude
toward web advertising because “both these constructs possess affective dimensions that are not
captured by advertising value” (Ducoffe, 1996, p. 30), which is conceived as mainly a cognitive
6
construct. Brackett and Carr (2001) confirmed this direct effect, and found similar direct links for
informativeness and credibility. Hence, we propose:

H6a. The perceived informativeness of the mobile search ad is positively associated with the
attitude toward mobile search ads.

H6b. The perceived entertainment of the mobile search ad is positively associated with the
attitude toward mobile search ads.

H6c. The perceived credibility of the mobile search ad is positively associated with the
attitude toward mobile search ads.

The advertising value model has been applied to measure user attitudes toward advertising on
various Internet platforms including banners (Ducoffe, 1996; Brackett and Carr, 2001; Sun et al.,
2010), sponsored results in desktop search engine results (Lin and Hung, 2009), Facebook ads
(Logan et al., 2012; Van-Tien Dao et al., 2014); and online TV ads (Logan, 2013). In the mobile
realm, advertising value has been measured in SMS and MMS ads (Haghirian et al., 2008; Xu et
al., 2009; Liu et al., 2012). To the best of our knowledge, this study will provide the first
measurement of advertising value in mobile search ads.

Instrument Development, Data Collection and Descriptive Statistics

Scales for informativeness, entertainment, irritation and advertising value were adapted from
Ducoffe (1996) for use with mobile sponsored results. Following Bracket and Carr (2001), we
based our scale for credibility on the items proposed by MacKenzie and Lutz (1989). The scale for
attitude toward mobile search ads was adapted from a scale on attitudes toward TV advertising by
Alwitt and Prabhaker (1994). English scales were translated to Spanish by two native English
speakers and differences were reconciled. Spanish scales were then translated back to English by a
third English speaker.

The survey was applied to a large sample of undergraduate students in the business division of a
top-ranked private university in Mexico City. The use of a student sample is appropriate because
Millennials are a key target demographic for marketers (Smith, 2011; Moore, 2012), and in this
upscale sample smartphone penetration is very high. Also, there are no previous studies about
Millennial attitudes toward mobile search ads, even though they are the heaviest users of mobile
search (Razorfish, 2015).

The instrument was piloted in a 35-student section. Students were invited both to answer survey
questions and to ask or comment about questions that seemed unclear or ambiguous. From this
feedback and from later analysis of the results the instrument was shortened and some items were
simplified. After a second satisfactory pilot on a different section with 32 students the refined
survey was deemed ready and was fielded to 59 additional sections in the business division with the
valuable help of division instructors. Survey collection took place in October and November of
2013. In each section the instructor gave out and collected the paper surveys, which took 10-15
minutes to answer. Students who had already taken the survey in a different section were told not to
repeat. To narrow the range of possible answers, participants were asked specifically about Google
mobile search, which in Mexico had a 96.6% market share in the fourth quarter of 2013 when the

7
survey was fielded (StatCounter, 2014). A total of 1240 surveys were collected and 1215 were later
deemed usable.

Sample characteristics are displayed in Table 1. The prevalence of male respondents is

representative for the business division which has 64.5% male population. The relatively large
number of students who are 23 or older is due to the popularity of dual-major programs at this
university (the table shows students’ first major). As expected, smartphone ownership in the sample
was very high, at 98.7%. The dominant operating system was iOS, with 61.2% of respondents
owning an iPhone. Android was second place with 30.5% of respondents. Only three (0.3%)
reported not owning a mobile phone.

((Table 1 ))

Out of 1212 phone owners, 1163 (96%) acknowledged doing searches from their mobile phone
using Google (some feature phones, which would not be considered smartphone, also allow Google
mobile search), indicating both a high prevalence of mobile search and a strong preference for the
Google search engine which has numerous mobile versions: the Google search app (available in all
mobile OS), the Safari browser search bar, the Chrome browser, etc. Respondents were then asked
how often they search for local products or services, response frequencies are shown in Table 2.
With respect to search for local products or services, 19% of respondents reported doing them daily
or almost daily, while 48.5% do them weekly. A chi-square test, run with SPSS version 21, did not
find any significant differences due to gender (2-sided p-value, 0.265).

((Table 2 ))

To further examine user reactions when confronted with mobile ads, the next question described a
scenario where users were out and about, and searching for a local product or service using their
phone. The question encouraged respondents to take out their phone and make an example search
(“condesa Chinese food”) which would return both sponsored and organic results (“condesa” is a
popular Mexico City neighborhood). Users were asked to describe their strategies for examining the
SERP, with its mix of sponsored and organic results, and quickly get to the information they
needed. The formatting and wording of the scenario question (the original was in Spanish) is shown
in Figure 2.

(( Figure 2 ))

We had previously experimented with the suggested mobile search (“Condesa” is a popular Mexico
City neighborhood) and determined that the first page of the SERP would contain two sponsored
results at the top followed by one organic result, which is a typical mix of results in mobile search.
The response frequencies are presented in Table 3.

((Table 3 ))

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Results show that Millennials who search from their phones for a local product or service use a
variety of strategies to scan the SERP and quickly get to the information they need. It is clear from
the results that a substantial majority (63.8%) follow the strategy of scrolling first, to skip the ads
and get to the organic results. The small screen of a cell phone does not allow the side-by-side
comparison of organic and sponsored results that is normal in desktop search. Therefore, when
respondents choose the two scrolling strategies, they are clearly rejecting the sponsored results and
favoring the organic results. Thus, almost two-thirds of Mexican Millennials display a negative bias
against mobile sponsored results, even in what could be considered the best-case scenario of a
mobile search for geographically proximate products and services.

The second most popular strategy after skipping the ads was to “click on the best result” regardless
of whether it was organic or sponsored, selected by 19.8% of respondents. When combined with the
8.4% who chose to click on the first result on the page, again regardless of the organic/sponsored
distinction, it yields a substantial 28.2% of respondents who compare ads and organic results
without prejudice and solely on a relevance basis. This is a substantial percentage and confirms
Jansen et al.’s (2007) findings about Millennial user openness to relevant ads when performing e-
commerce searches.

Lastly, the survey revealed that 5.6% of respondents are actually well disposed toward ads, and
would click on an ad as their first strategy, probably judging ads to be a quick way to find a local
product or service.

Only 2.5% of respondents chose the option “Other strategies” which indicates the first six options
capture most users’ SERP scanning strategies. The most common “Other strategies” were using
Google Maps, with 13 mentions, Waze with five, Foursquare with two, and various Mexico City
restaurant guides with four mentions. The rationale for expressly excluding maps from the scenario
question was to set up a direct comparison between organic and sponsored results when performing
e-commerce searches.

The survey thus provides an estimate of Millennial smartphone users who do not exhibit a negative
bias against local mobile search ads. Combining the results from users who indistinctly click on
organic/sponsored results with those who actively click on ads yields a total of 33.8% of
respondents who are not averse to clicking on a mobile search ad if it leads them to the information
they are seeking. Although in the minority, the size of this group is still substantial and encouraging
for advertisers.

Another relevant finding is that there are no gender-based differences in SERP scanning strategies,
as shown in the column percentages of Table 3. The chi-square test found no significant differences
due to gender (2-sided p-value, 0.317). The suggested example for local search in the scenario
question was gender-neutral (Chinese food).

The next question in the survey, still in the context of searches for local products and services,
directly asked users how frequently they clicked on mobile sponsored results. Again, this is a
context where users can be expected to be most receptive to mobile advertising. The response
frequencies are shown in Table 4.

((Table 4 ))

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Respondents’ self described reaction to ads is thus quite negative, with 72.2% stating they never or
almost never click on mobile search ads even in the best-case scenario of searching for a local
product and seeing an ad for it in the SERP. As before, the reaction is substantially the same in both
genders, the chi-square test is non significant (2-sided p-value, 0.208). The responses to this
question confirm the negative bias against sponsored results already evidenced in the scenario
question, although when participants were asked to actually describe their mobile SERP scanning
strategies, a slightly higher 33.8% reported not being against clicking on an ad

At this point, the survey instructed users who had never clicked on an ad to turn in the questionnaire
as they had finished. Users who reported having clicked at some point on mobile search ads were
asked to complete the back of the survey where they would use the items adapted from Ducoffe
(1996) to report their perceptions of advertising value regarding those ads in the context of mobile
local search. Our rationale for excluding users who reported never clicking on ads was that since
they never visited an advertiser’s landing page their assessment of ad value and usefulness was less
informed than that of clicking respondents. In all, we received 315 valid responses to the
advertising value section of the survey, 213 male and 102 female.

Structural Model Estimation

The model was tested using the Partial Least Squares (PLS) method of structural equation
modeling. Estimation was carried out using SmartPLS version 2.0 (Ringle et al., 2005). We first
evaluated the measurement model, which involves examining indicator reliability, internal
consistency reliability, convergent validity and discriminant validity (Hair et al., 2012). For the full
sample, Table 5 shows the psychometric properties of the measurement model. Item irr1 was
discarded because its loading was well below the 0.70 threshold suggested by Hulland (1999). All
other items had acceptable loadings (the numbers shown reflect model after dropping irr1). In
addition, composite reliabilities for all scales are well above the suggested threshold of 0.70
(Bagozzi and Yi, 1988), indicating good internal consistency.

((Table 5 ))

Table 6 shows the average variance extracted (AVE), square root of the AVE (in bold on the main
diagonal) and inter-construct correlations. All AVE values are well above 0.50 which indicates
good convergent validity (Bagozzi and Yi, 1988). Furthermore, complying with the Fornell-Larcker
criterion, each of the elements on the main diagonal is greater than the respective row and column
off-diagonal elements, which indicates adequate discriminant validity at the construct level
(Hulland, 1999; Henseler et al., 2009). In sum, the measurement model displays adequate indicator
and internal consistency reliability, as well as convergent and discriminant validity.

((Table 6 ))

The structural model was first estimated for the full 315 respondent sample, results are displayed in
Table 7 as Model 1 and shown in Figure 3. Model fit is excellent, with all path coefficients having
the hypothesized signs. The t-values for path coefficients are calculated through a bootstrapping

10
procedure (Hair et al., 2012); for Model 1 all are significant at the 5% level (critical value for two-
tailed tests is 1.96) except for the hypothesized direct path between credibility and attitude.

((Table 7 ))

((Figure 3 ))

A more nuanced picture is revealed when the sample is split into male and female respondents
(Models 2 and 3 in Table 7). For both subsamples, the paths from irritation and credibility to
AdValue become non-significant. When the model is run without the path from credibility to
AdValue (Models 4 and 5), important gender effects are revealed. For female respondents, irritation
becomes non-significant and so does the direct effect between credibility and attitude. The
remaining path coefficients are all significant and with the expected signs. For the male subsample,
irritation remains significant, but the direct effect between entertainment and attitude becomes non
significant. We based the forthcoming analyses on Models 1, 4 and 5 as the ones displaying the best
fit.

In all models, informativeness has a large and positive effect on perceived advertising value for
both male and female respondents, hence H1 is supported. In addition, informativeness has a
positive direct effect on general attitude toward mobile search ads, again in both subsamples,
thereby supporting H6a.

Entertainment also has a positive effect on advertising value among both males and females, which
gives support to H2. In addition, the female subsample displayed a significant direct effect of
entertainment on attitude, which on the male subsample was not significant. Hence, H6b is only
supported among women.

The inverse gender effect occurred for credibility: for the male subsample, credibility had a
significant direct effect on attitude, whereas for females this path was not significant. Therefore, H4
receives only partial support from the full sample, and H6c is supported only among men.

Lastly, irritation had a significant path coefficient on AdValue for the full sample and for the male
subsample. Hence, H3 received partial support among men, but not among women. A summary of
research hypotheses is provided in Table 8.

Discussion and implications

Using a large sample of upscale Millennials, this study extends to the mobile screen previous
research on user attitudes toward sponsored versus organic search results (Jansen et al., 2007;
Kobylanski, 2012). The survey shows that when performing mobile searches for local products or
services, 63.8% of users skip the ads and choose among the organic results, thereby displaying a
negative bias toward this mode of advertising. The good news for advertisers is that 33.8% of
respondents, both male and female, reported they were not against clicking on a mobile sponsored
result if they perceived it would provide them with the information they needed. Although in the
minority, the size of this group, coupled with the growth in mobile search volume, represents a
substantial marketing opportunity.

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The study also surveyed users who in the past had clicked on mobile search ads to determine how
they formed their assessments of the advertising value of these ads, as well as their general attitude
toward this mode of advertising. We found a strong significant effect of informativeness on
perceived advertising value for both men and women. We conclude that smartphone users searching
the Internet for local products and services are interested above all in the informative quality of the
ads they see next to organic results. Moreover, informativeness had a strong direct effect on general
attitude toward mobile search ads. The practical implication for advertisers is that providing
relevant and timely product/service information in mobile ad copy leads to a higher advertising
value assessment from users and a more positive general attitude toward this type of ads.

Entertainment also had a strong effect on Millennials’ assessment of advertising value, both male
and female. This reflects smartphone users’ cognitive assessment of mobile ads’ entertainment
quality, which is an interesting result considering the ads themselves are plain-text and fairly
concise. As regards the hypothesized direct effect between entertainment and attitude, the link was
substantial and statistically significant among female respondents, but not among males. The
implication for advertisers is that despite the plain-text design of mobile search ads, both men and
women can and do evaluate them as entertaining and contributing to the ad’s perceived value.
Therefore writing witty or humorous ad copy will positively impact advertising value for all users,
as well as women’s attitude toward this mode of advertising.

Irritation had a significant negative effect on perceived advertising value among male respondents,
but no effect among females. The implication is that advertisers catering to men should try to avoid
tactics that users find annoying, such as incongruencies between an ad’s copy and the information
on the landing page.

Compared to informativeness and entertainment, credibility had a weak impact on user assessments
of advertising value in the full sample, and the effect vanishes altogether when separately
considering female and male respondents. On the male subsample, there remained a significant
direct effect on attitude, although smaller than the direct effect of informativeness. These findings
contrast with previous research on desktop sponsored results, where credibility had the largest
impact on advertising value (Lin and Hung, 2009). The sample we surveyed for advertising value is
probably less sensitive to the credibility of the ads, because we excluded respondents who reported
never clicking on search ads, presumably due to credibility concerns. The practical implication for
advertisers, is that writing copy that enhances the credibility of the ad (e.g. mentioning a money-
back guarantee) will at least impact male users’ general attitude toward mobile search ads.

The findings of this study come at a very good time. Recent industry reports indicate that mobile
search volume has exceeded desktop search worldwide (MacMillan, 2015), and smartphone
penetration is also growing rapidly (Emarketer, 2014). This means advertisers, especially local
merchants, will have plentiful opportunities to connect with potential customers, who are
increasingly searching while “out and about”, seeking nearby solutions to their needs. A recent
industry report in the USA noted that 78% of local smartphone searches ended in a purchase
(Sterling, 2014).

Paid search platforms, such as Google AdWords or Bing Ads, give the advertiser a number of
personalization options that can enhance the basic search ad for a particular user. Because these
companies constantly monitor their search across devices –PC, tablet and smartphone–, a
smartphone user reveals more than just his or her search keywords when performing a mobile
search. Geographical location, gender, approximate age and broad interests are usually revealed as
12
well. Hence, advertisers can craft a highly personalized ad copy to be displayed to users that trigger
any of these characteristics. For instance, a local merchant can create an ad with a special
promotion to be displayed only to users doing mobile search about his product or service within a
three mile radius of his store. This enables small businesses to leverage their location, using a
sophisticated and cost-efficient advertising medium with a high probability of success.

To summarize, the following actionable recommendations for advertisers are warranted by study
results:

• If not already doing so, start using mobile search advertising.

• Leverage store location by using personalized ad copy to connect with consumers nearby.
• Fine-tune mobile ad copy with respect to informativeness, entertainment, irritation and
credibility, using the suggestions given before.

Limitations and Future Research

This research relied on a student sample, specifically upscale Mexican Millennials, where we
expected high smartphone penetration. This sample is not different in substantive ways from
international samples of Millennial smartphone owners. Various authors have pointed to a global
convergence of attitudes and behavior within the Millennial age group because of the internet and
the globalization of communication it made possible (Meredith et al. 2002; Moore, 2012; Razorfish,
2015). Furthermore, we would argue that upscale Mexican Millennials tend to mimic their
American counterparts, particularly in status consumption (Eastman et al. 1997; Roberts and
Martinez, 1997; Vaezi, 2005).

To simplify the survey we only asked respondents about their experience searching with Google,
which at the time had a near monopoly (96.6%) on the local mobile search market. However, we
should point out that the Bing Ads platform offers similar mobile ad targeting capabilities
(Microsoft, 2016). The guidelines we gave before are also valid for Bing mobile search ads, and if
marketing budget is available, we would recommend local merchants to advertise in both platforms
to extend their reach.

Another limitation is using a self-report survey, which relies on participants’ recall regarding their
behavior in local search tasks, and their attitude toward mobile search ads. We tried to get a realistic
response from participants through the scenario question, and the encouragement to perform an
example search while answering the survey. However, an experimental design (e.g. Jansen et al.,
2007), using controlled e-commerce mobile search tasks and mobile ads, and actual observed
behaviors among participants would offer greater internal validity. This is a priority for future
research, given the growing importance of mobile search.

Expanding the sample beyond the young adult demographic is another important direction for
future studies. Although Millennials are generally regarded as more techno-savvy than their parents,
smartphone penetration is rapidly growing among elderly people. A recent study showed that 69%
of US senior citizens use their smartphone at least sometimes when shopping in-store (Norton,
2014).

In sum, the results from a survey of Millennial smartphone owners suggest local businesses,
particularly those catering to this demographic, should embrace mobile search advertising, because
13
these consumers are highly reliant on mobile search to find local products and services.
Furthermore, when doing e-commerce searches, as many as a third of them are not averse to
clicking on timely and relevant ads. When coupled with the growth of mobile search volume, and
the increasing penetration of smartphones among all mobile phone users, the marketing
opportunities for the foreseeable future are substantial indeed.

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 FIGURES AND TABLES

FIGURE 1 - Advertising value model

18
8. Strategies for using Google Search. Let’s assume you’re on the street in a neighborhood you’re not
familiar with. You search in you cell phone using Google because you need a local product or service.
Google displays the usual search engine results (or organic results) and advertisements (or sponsored ads).
Let’s assume that on this search Google does not display any map. What strategy do you usually follow to
quickly find the information you need?

If you want, you can take out your phone and do a search to remember what you usually do. For
example you could search for “condesa chinese food”, o something like that …

Choose a single strategy (if you use more than one strategy, choose the one you usually use first)

I usually clic on one of the sponsored ads, the one I think is the best
I usually clic on the first of the sponsored ads
I usually clic on the topmost result, regardless whether it is advertisement or organic result
I usually clic on the result I think is the best, regardless whether it is advertisement or organic result
I usually scroll the page to skip the ads and clic on the first organic result
I usually scroll the page to see several organic results and clic on the one I think is the best

Other strategy (please specify) ___________________________________________

FIGURE 2 - Scenario question for local mobile search strategies

19
FIGURE 3 - Estimated path coefficients (Model 1)

20
Table 1: Sample characteristics
Number Percentage
Male 766 63.0%
Gender Female 444 36.5%
n.a. 5 0.4%
17-18 167 13.8%
19-20 414 34.1%
Age 21-22 354 29.2%
23-24 220 18.1%
25 or more 59 4.9%
Business Administration 412 33.9%
Financial Management 328 27.0%
Business Engineering 124 10.2%
Undergraduate Major Accounting 107 8.8%
Economics 72 5.9%
Industrial Engineering 46 3.8%
Other majors 126 10.4%
iOS (iPhone) 735 60.5%
Android 365 30.0%
Blackberry 52 4.3%
Mobile phone Windows 36 3.0%
Operating System 2 phones (iOS + Android) 6 0.5%
2 phones (iOS + Blackbberry) 2 0.2%
2 phones (Android + Blackberry) 3 0.2%
Other (feature phones) 11 1.0%
Total smartphone owners 1201 98.7%
Smartphone
Total non-smartphone owners 11 1.0%
ownership
Do not own a mobile phone 3 0.25%

Table 2: How often do you search with Google from your cell phone to find local products or services
(that is, in places or stores geographically close to where you are)?
Female Male Total
68 94 162
Never or almost never
(15.9%) (12.9%) (14.0%)
79 134 213
Monthly
(18.4%) (18.4%) (18.4%)
194 367 561
Weekly
(45.2%) (50.5%) (48.5%)
88 132 220
Daily or almost daily
(20.5%) (18.2%) (19.0%)
429 727 1156
Total
(100.0%) (100.0%) (100.0%)

21
Table 3: Strategy on the mobile SERP when looking for a local product or service
Female Male Total
14 16 30
Click on best sponsored ad
(3.3%) (2.3%) (2.7%)
12 21 33
Click on first sponsored ad
(2.9%) (3.0%) (2.9%)
31 63 94
Click on first result, whether ad or organic
(7.4%) (9.0%) (8.4%)
70 152 222
Click on best result, whether ad or organic
(16.6%) (21.7%) (19.8%)
115 182 297
Scroll the page and click on first organic result
(27.3%) (26.0%) (26.5%)
169 249 418
Scroll the page and click on best organic result
(40.1%) (35.5%) (37.3%)
10 18 28
Other strategies (please specify)
(2.4%) (2.6%) (2.5%)
421 701 1122
Total
(100.0%) (100.0%) (100.0%)

Table 4: When you use Google in your cell phone to search for local products or services,
do you ever click on the ads?
Female Male Total
324 511 835
Never or almost never
(75.5%) (70.3%) (72.2%)
93 192 285
With low frequency
(21.7%) (26.4%) (24.7%)
11 19 30
Very frequently
(2.6%) (2.6%) (2.6%)
1 5 6
Nearly every time
(0.2%) (0.7%) (0.5%)
429 727 1156
Total
(100.0%) (100.0%) (100.0%)

22
Table 5: Psychometric properties of the measurement model
Indicator Cronbach Composite
loading alpha reliability
Informativeness 0.6961 0.8296
inf1 0.8054
inf2 0.7503
inf3 0.8034
Entertainment 0.7321 0.8407
ent1 0.7015
ent2 0.8012
ent3 0.8860
Irritation 0.7159 0.8739
irr1* 0.4202*
irr2 0.9121
irr3 0.8488
Credibility 0.7410 0.8475
cred1 0.7627
cred2 0.7929
cred3 0.8599
Advertising value 0.7117 0.8361
adval1 0.8082
adval2 0.7492
adval3 0.8219
Attitude toward 0.6981 0.8321
mobile search ads
atoa1 0.7933
atoa2 0.7726
atoa3 0.8019
* item irr1 was discarded, loading < 0.70 (Hulland, 1999)

Table 6: Average variance extracted and inter-construct correlations

Construct AVE INFORM ENTERT IRRIT CREDIB ADVALUE ATOAD
INFORM 0.6190 0.7868
ENTERT 0.6397 0.4617 0.7998
IRRIT 0.7762 -0.2112 -0.2503 0.8810
CREDIB 0.6499 0.5725 0.5804 -0.2814 0.8062
ADVALUE 0.6300 0.6365 0.5237 -0.2946 0.5283 0.7937
ATOAD 0.6231 0.5911 0.4940 -0.2904 0.4977 0.5978 0.7894

23
 Table 7: Model estimation for full sample, female and male subsamples
Model 1 Model 2 Model 3 Model 4 Model 5
Full sample Female Male Female Male
n = 315 n = 102 n = 213 n = 102 n = 213
0.445 0.384 0.478 0.423 0.515
INFORM → ADVAL
(8.842) (3.916) (7.580) (4.434) (10.010)
0.226 0.282 0.211 0.336 0.243
ENTERT → ADVAL
(4.479) (2.863) (3.362) (3.973) (4.512)
-0.113 -0.132 -0.098 -0.143 -0.107
IRRIT → ADVAL
(2.411) (1.507) (1.869) (1.583) (2.044)
0.111 0.128 0.088
CREDIB → ADVAL -- --
(2.068) (1.539) (1.407)
R2 (ADVAL) 0.493 0.518 0.490 0.509 0.486
0.283 0.217 0.317 0.212 0.317
INFORM → ATOAD
(4.621) (2.187) (3.928) (2.121) (4.058)
0.161 0.340 0.095 0.335 0.095
ENTERT → ATOAD
(2.809) (3.336) (1.581) (3.320) (1.600)
0.092 -0.077 0.152 -0.063 0.153
CREDIB → ATOAD
(1.583) (1.018) (2.016) (0.921) (2.090)
0.285 0.296 0.271 0.294 0.271
ADVAL → ATOAD
(5.133) (2.865) (4.219) (2.789) (4.294)
R2 (ATOAD) 0.463 0.448 0.492 0.447 0.492
Note: Non-significant t-values are shown in italics

Table 8: Summary of research hypotheses

Hypothesis Model conclusion
H1 - Informativeness on AdValue (+) Supported
H2 - Entertainment on AdValue (+) Supported
H3 - Irritation on AdValue (-) Supported in full sample and male subsample

H4 - Credibility on AdValue (+) Supported only in full sample, not in subsamples

H5 - AdValue on Attitude (+) Supported

H6a - Informativeness on Attitude (+) Supported

H6b - Entertainnment on Attitude (+) Supported in full sample and female subsample
H6c - Credibility on Attitude (+) Supported in full sample and male subsample

24

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