Personalisation in Location-based Advertising: The Moderating Effect of Brand Familiarity

The increasing adoption of location-based services and smart devices have propelled optimistic forecasts for location-based advertising as a unique and effective tool to improve consumers’ attitude and purchase intention towards goods and services. While so, concerns regarding over the use of personalisation in a LBA context is prevalent. Given so, this study examines the influence of personalisation tactics on attitudes and purchase intention towards a focal product, with brand familiarity as a moderating factor, in the context of location-based advertising. It is hypothesized that high personalisation improves attitude towards a focal product and secondly, that high brand familiarity aids the resulting outcome of personalisation. Finally, it is hypothesized that attitude is positively related to purchase intention. As a central part of the study, an experiment involving 100 participants was conducted. The experiment’s stimuli involved the presence and absence of personalisation and brand familiarity respectively, forming a total of four equal participant groups. It was found that personalisation positively affects the effects of location-based advertising; while brand familiarity indeed moderates the effects of personalisation on attitudes. Specifically, high brand familiarity allows for heightened effects of personalisation on attitudes, while in low brand familiarity situations, the effects of personalisation in a location-based ad is negligible. Since so, brand familiarity is an evidenced boundary condition for the effective application of location-based advertising. The study supports past research in establishing that brand familiarity lowers perceived risks and increases trust for location-based advertising, and that personalisation allows for more effective marketing messages. From a practical perspective, marketers of well-known brands should look to personalisation in location-based marketing opportunities to exploit their inherent brand value. On the other hand, less-known brands should look to improve their brand familiarity before applying personalisation in locationbased ads