SMS Advertising and Consumer Privacy: Analysis of Factors Affecting Consumer Willingness to send and Receive Information in Permission and Data based SMS advertising

Abstract

The increasing penetration rate of mobile phone, with specific characteristics of this medium, such as almost everywhere with the audience, has attracted companies' attention to it as an advertising channel. Mobile devices facilitate highly customized marketing communication in terms of person, time location and context so numbers of companies that use this medium for communicating with their customers are increasing. This fact that mobile is personal device and this is user rights to decide how to use it, on the one hand, and growing number of SMS advertising intrude consumers' mobile devices, on the other, has attracted consumers' rights advocators and public policy makers' attention to violation of consumer privacy by unwanted and unrelated SMS advertising that sent randomly to consumers' mobile numbers. So many countries have enacted laws that enforce companies to gain permission from users before sending SMS advertising. Recently in Iran, too, Communication Regulatory Authority has announced mobile operators must gain their subscriber's permission for sending SMS advertising. On the other hand, studies showed when SMS ads that sent to mobile devices are relevant, even if were sent without permission, would be less annoyance. Personalized advertising messages using a custom database are possible and common in some countries. But issue of collecting and maintenance of personal information without permission of consumers, through technologies such as GPS, Cookies, Scanner data…or through buying from companies that have such data, again raises the issue of privacy violations. Information gathered with subscribers' permission and satisfaction is a solution for this issue. Hence the present paper with review of studies in traditional business environments and e-Business environment, also performing four focus group interview designs a model for determining factors affecting consumers' willingness to receive information via SMS ads, and consumer willingness to provide information to receive personalized SMS advertising and based on proposed model testable hypotheses are proposed. Our hypothetical model propose that consumer trust to his/ her mobile operator and trust to legal and executive infrastructures that safeguard from consumers against probable misuses is the first prerequisite for implementing permission-based and data-based mobile advertising.