Perceived Intrusiveness of E-Mail Advertising and Its Impact on Brand Trust

Table of Contents

Abstract

1. Introduction

2. Literature review and hypothesized effects

3. Methodology

4. Findings

5. Conclusion and Managerial implications

6. Limitations and future research

7. References

8. Appendix

Appendix I: Development of the significance of e-mail marketing for industrial firms in the next years in Germany 2009 (Source: Artegic AG 2009)

Appendix II: Total expenditure for e-mail marketing in Germany from 2008 until 2012 in bn € (sources: TNS Infratest, Deutsche Post, Market Research Service Center)

Appendix III: Discussion guide of the focus group

Appendix IV: Brainstorming / Whiteboard

Appendix V: Transcript of the focus group

List of Tables

Table 1: Products and Brands

Table 2: Aspects of Brand Trust

Table 3: Dimensions of Intrusiveness

Table 4: Feelings and emotions with regards to intrusiveness

Table 5: Hypotheses: Confirmation / Disconfirmation

List of Figures

Figure 1: Dimensions of Intrusive Behavior and their Effect on Brand Trust

Abstract

E-mail advertising has become increasingly important as marketing tool for companies as it reaches a large number of customers at relatively low costs. However, there also exist certain drawbacks of this marketing tool, notably the perceived intrusiveness by the customers linked to the e-mail advertising behavior of firms. A high degree of perceived intrusiveness risks causing negative customer responses that, in the long term, may have a negative impact on brand trust. As there is barely any research on the topic of intrusive brands, this qualitative study examines the concept of intrusiveness in case of e-mail advertising for the German market more in detail. The findings explain what kind of behavior customers perceive as intrusive; hence it helps firms to understand the problem and to adapt their e-mail advertising strategies.

1. Introduction

E-Mail advertising has gained a great importance as marketing tool for firms in Germany to diffuse information about the company, their products and other matters of importance.¹ Even if the expenditures for e-mail marketing decreased slightly by 0.2 billion euros in 2012, the amount remains significantly high with 1.7 billion euros in total.² However, the number of German internet users who reduce the quantity of subscribed newsletters is on the rise.³ Discussions about privacy concerns with regard to personal information, the reception of unsolicited e-mails as well as the high frequency of received e-mails raise the question whether customers increasingly perceive e-mail advertising as too intrusive and therefore develop certain defense mechanisms towards this communication channel.

Even if the intrusiveness of e-mail advertising is frequently and publicly discussed, there only exists little empirical work on this topic. A major part of past studies has rather focused on the perceived intrusiveness of offline or other online marketing tools.⁴ One attempt to investigate the perceived intrusiveness of e-mail advertising among other digital advertising forms has been conducted by Truong and Simmons (2010).⁵ Nevertheless, their study did not completely focus on the intrusiveness of e-mail advertising and rather condensed the findings on digital advertising in general, leaving out specific and profound insights on the intrusiveness of e-mail advertising.

Thus, the present study aims to examine in greater detail the perceived intrusiveness of e-mail advertising. The objective is to provide a better understanding of the nature of perceived intrusiveness by the customers with regard to e-mail advertising by determining constitutive dimensions for this kind of intrusive behavior. Moreover, it shall be investigated whether there is a reciprocal relationship between perceived intrusiveness of e-mail advertising and brand trust. Building brand trust is one of the key objectives in marketing as it is empirically shown that it positively influences the purchase behavior of the customer.⁶ Matzler et al. (2006) proved that a customer with high brand trust actually reveals a higher attitudinal and purchase loyalty, which in turn is an important source to provide significant competitive and economic benefits to a company.⁷ Hence, understanding the relationship between the perceived intrusiveness of e-mail advertising and brand trust is crucial for the economic success of a company.

2. Literature review and hypothesized effects

As our study focuses on both the dimensions of perceived intrusiveness as well as the relationship between brand trust and perceived intrusiveness, we decided to use existing studies and models as a theoretical foundation and inspiration for our research. We did not specifically examine already existing models, but used them as an input for developing our hypotheses (sub-research questions), own theoretical model and interview guide.

Chang and Morimoto (2011) define perceived ad intrusiveness “as the extent to which unwanted and unwelcome marketing communication interferes with an individual’s cognitive process and tasks.”⁸ Via the following literature review, hypotheses with regard to perceived intrusiveness of e-mail advertising have been derived.

The fact that collected information about online consumers is normally processed without their knowledge and approval, consumers feel uneasy about having this information shared with marketers⁹. Meanwhile, this kind of information is of great importance to marketers as consumers are more likely to accept a particular message when the content is relevant to them.¹⁰ However, this implies a certain degree of personalization of the message. This could potentially be perceived as intrusive if the consumer gets the feeling of being spied on. Hence, we derive the following assumption:

H1: A high degree of personalization in e-mail advertising can trigger a feeling of intrusion by the recipient.

Li et al. (2002) have shown in their study that ads being perceived as intrusive cause a higher likelihood for avoidance behavior by the consumers.¹¹ Chang and Morimoto (2011) found out that consumers became more sensible about perceiving spam e-mails over time, even though the number of spam e-mails decreased.¹² Therefore, one may assume that advertising e-mails of one brand or in general, once perceived as being intrusive, will be equally ignored in the future as the perceived intrusiveness endures.

H2: Personal past experiences with intrusive behavior of a company affect the perception of intrusiveness in the present.

Micheaux (2011) studied the perceived e-mail advertising pressure focusing on the frequency of sent e-mails by a firm as well as the relevance of the information to the customer. Perceived e-mail advertising pressure from the consumer perspective implies “a state of irritation provoked by the impression of receiving too many e-mail advertisements from a commercial source”.¹³ This state of irritation could be eventually linked to a feeling of intrusiveness.¹⁴ Her findings suggest that perceived pressure can increase and cause damage among people, who open the e-mail if the relevancy of the information is missing for them. Moreover, the frequency of sent e-mails by one firm does not necessarily have a negative impact on the perceived pressure of the recipients. Micheaux (2011) rather supposes that the overall volume of received e-mails by different firms has this kind of negative influence.¹⁵ Hence, we derive the following hypothesis for our research:

H3: Perceived intrusiveness of received e-mail advertising increases with higher frequency of received information as a whole (e-mails from different companies).

H4: The lower the relevance of received information, the higher the degree of perceived intrusiveness of the e-mail advertising.

Moreover, we aim to find out if a strong or low consumer’s brand trust has a simple moderating effect on perceived intrusiveness of e-mail advertising. A study on consumer’ response to privacy concerns of online advertising by Sheehan and Hoy (1999) showed that consumers are more likely to judge an ad to be intrusive in case they are unfamiliar with the advertiser.¹⁶ In a further step, this may be linked to brand trust considering that brand familiarity has been proved by past research to be one important antecedent of brand trust.¹⁷ Other research has shown that brand trust influences the consumers’ value perceptions¹⁸ as well as the perceived persuasion of a message.¹⁹ Based on this research literature, one can question if trust also affects the degree of perceived intrusiveness. We hence propose the following assumption:

H5: Intrusive behavior in e-mail advertising influences brand trust and vice versa.

Figure 1 shows the model related to the hypotheses derived from literature.

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Figure 1: Dimensions of Intrusive Behavior and their Effect on Brand Trust

3. Methodology

Taking into consideration that there is only little research for the context of intrusive brands and their relationship to brand trust, explanatory research is required. As a consequence, a qualitative methodology seems to be the most adequate way to deal with the complexity of the research topic. Furthermore, an interpretative approach is chosen in order to understand the variables of intrusiveness and their link to brand trust.

For this research, a focus group has been conducted. A focus group can be described as a 1-3 hour discourse for small groups (around 5-10 participants), who are animated by a presenter to discuss a certain topic stimulated by an informational input.²⁰ The target group should be homogenous according to certain characteristics, such as age, sex, lifestyle or job. To improve the output quality, Schulz (2012) recommends that the participants do not know each other beforehand.²¹ As Zwick et al. (2012) point out, a focus group can be carried out within a reasonable timeframe and low costs, although recruiting suitable participants might be complicated. Moreover, the method is very flexible towards new ideas, which have not been taken into consideration by the researchers before, and that can be involved into the discussion spontaneously.²²

The focus group of this study contained five German speaking participants. Following Zwick et al. (2012), the setting included a big round table for everyone to take seat. Good room acoustics guaranteed high quality audio taping. An additional stimulus was provided by the use of a flipchart to collect the participant’s ideas of a brainstorm.²³ For the realization of the focus group, a discussion guide (see Appendix I) with the most important questions, topics and concepts regarding the topic has been prepared, as Mack et al. (2012) suggest.²⁴ Benighaus et al. (2012) characterize the role of the presenter of the focus group, who helped the participants understand the questions without influencing them, summarized the results and asked for additional details if necessary. Furthermore, he animated the silent participants to speak and kept focused on the main topic if the participants opened discussions that were unrelated to the topic of intrusive brands.²⁵

Besides the audio tape, the main ideas and results of the session have been transcribed and translated afterwards (cf. Appendix IV), as Ruddat (2012) recommends. Suitable quotations of the participants will be used later on in order to emphasize core findings of the research.²⁶

4. Findings

In the beginning of the focus group, the first question dealt with brands, which are perceived as good, bad or indifferent to the participants. They should give spontaneous examples and reasons. The brands mentioned by the verbatim were Apple, Nike, Tesla Motors, Bosch, Facebook, Abercrombie & Fitch, Liebherr and Redbull. The positive aspects can be summarized in two categories: innovation, e.g. innovative ideas or state-of-the-art technology, and employer branding, as a part of the company’s philosophy to integrate and train employees or provide them with further education. The aspect of employer branding has not been considered by the researchers before but could be an interesting topic for future research.

The negative aspects didn’t have much to do with our possible perception of intrusiveness. Only Facebook was named to harm privacy by analyzing and selling data to third parties. Other negative reasons for the participants were tax evasion (Apple), discrimination of certain target groups (Abercrombie) or the focus on a false brand image (Redbull). Table 1 summarizes the brands mentioned for the first question by the verbatim.

As a next step, the focus group was asked to explain how they get and receive information about a brand. Respondents brought up the traditional channels TV, radio, newspapers and magazines like STERN or SPIEGEL, posters as well as billboards, so that brands could create awareness.

The Internet was mentioned explicitly as a channel for active research. The participants named internet forums, company websites to download annual reports, or Wikipedia. The channel for emails, including newsletters, was not mentioned without support of the presenter.

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Table 1: Products and Brands

Only some of the members of the group have subscribed for a newsletter so far, sometimes related to brand information, sometimes related to the actual news. The general opinion on newsletters differed: Some considered them as useful, some as annoying:

“The company “Canyon” for example sends me a newsletter about their new products and models and I think that this is quite interesting. nd it’s kind of an automatic source of information of something that I’m explicitly interested in.”

- Marek, 22, employee

“You are always “flooded” with information. If I really want to know something, I will look for it myself. I will find it out myself. I don’t need a newsletter for this.” - Ines, 28, student

To get closer to the topic of intrusive brands, the next question asked for necessary characteristics of a brand in order to trust it. Respondents commented mainly on good relationship marketing, including an understanding and professional customer service in case of complaints and need for information, as well as a fixed person to contact in order to establish a stable relationship. Furthermore, past positive or negative experiences and recommendation via word-of-mouth communication, affected future buying habits and trust perception of the brand. Another aspect is the way information is transferred, if it is direct, personal and transparent way of communication by the firm. Moreover, the participants tend to trust more in independent sources than the company’s publicity. Table 2 summarizes the obtained results.

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Table 2: Aspects of Brand Trust

Coming closer to the core of the research, the next question focuses on experiences the verbatim have had with a brand that has been disturbing, annoying or intrusive via their communication. In this context, especially telecommunication providers, insurance companies and internet services have been criticized, either due to their aggressive call centers or personal contact, but as well because of e-mails and newsletters being sent in high frequencies. Smartphone applications, which diffuse information via their push function, may be perceived as intrusive, too. Therefore, H3 can be confirmed. Additionally, the results of this brainstorming session are listed in the appendix V.

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Table 3: Dimensions of Intrusiveness

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¹ cf. Appendix I (Development of the significance of e-mail marketing for industrial firms in the next 3 years in Germany 2009)

² cf. Appendix II (Total expenditure for e-mail marketing in Germany from 2008 until 2012 in bn €)

³ cf. Internet World Business (2010)

⁴ cf. “Measuring the Intrusiveness of Advertisements: Scale Development and Validation” (Li et al. 2002);

“Forced Exposure and Psychological Reactance: Antecedents and Consequences of the Perceived Intrusiveness of Pop-Up Ads (Edwards et al. 2002); “High-Cost Banner Blindness: Ads Increase Perceived Workload, Hinder Visual Search, and Are Forgotten” (Burke et al. 2005); “ re Unclicked ds Wasted? Enduring Effects of Banner and Pop-Up Ad Exposures on Brand Memory and ttitudes.” (Chatterjee 2008)

⁵ cf. Truong and Simmons (2010)

⁶ cf. l’étude de Matzler et al. (2006)

⁷ cf. Srivastava et al. (1998)

⁸ cf. Chang and Morimoto (2011), p. 364

⁹ cf. Richards (1997), p. 320

¹⁰ cf. Caroll et al. (2007)

¹¹ cf. Li et al. (2002), p. 45 and 46

¹² cf. Chang and Morimoto (2011), p. 372

¹³ cf. Micheaux (2011), page 46

¹⁴ cf. Li (2002), page 44

¹⁵ cf. Micheaux (2011), page 59

¹⁶ cf. Sheehan and Hoy (1999)

¹⁷ cf. Chaudhurry and Holbrook (2001)

¹⁸ cf Sirdeshmukh et al. (2002)

¹⁹ cf. Eagley et al. (1978); Hovland et al. (1953); Priester et al. (1995)

²⁰ cf. Schulz (2012), page 9

²¹ cf. ibid., page 14-15

²² cf. Zwick et al. (2012), page 25

²³ cf. ibid., page 32-33

²⁴ cf. Mack et al. (2012), page 66-68

²⁵ cf. Benighaus et al. (2012), page 111-112

²⁶ cf. Ruddat (2012), page 195-196