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This essay is excerpted from the book “Tap: Unlocking the Mobile Economy.”
When I think of crowdedness in any given context, it immediately conjures a lot of negative perceptions in my mind. I imagine people in airports, train stations, shopping malls, stadiums and subway trains jostling, elbow to elbow, for an extra inch of space.
How do people respond when they are in these unpleasant crowds, the ones we don’t want to join? Our reaction in shopping malls and similar environments is clear. Crowds have been shown to make us want to escape. In retail settings it can provoke negative attitudes toward the store. Hence, historically crowdedness has been undesirable, at least for firms trying to sell.
But is it possible that there can be a silver lining in this dark crowd? Can firms use crowdedness to create a new kind of force? If so, what can be the key ingredient behind this crowdedness force?
In a study we published in 2016, my colleagues and I cooperated with one of the world’s largest telecom providers to test this idea in a major subway system. The underground subway in that city (it was in China) is equipped with mobile signal receivers and allows a passenger to use his or her mobile device throughout the course of a commute.
Our goal was to test how crowdedness affects a consumer’s responsiveness to mobile advertisements. We defined crowdedness as the number of people per square meter. If you don’t ride a subway but you have tiled floor nearby, you can get a sense for this by standing at the center of a three-foot-by-three-foot section of typical vinyl or linoleum tiles and imagining yourself surrounded by more and more people.
For each day of our study, we sent advertisements for various services at five different times, each corresponding roughly to a typical phase in a day’s cycle. Within each time cycle, the provider sent text messages to two or three trains, for a total of 14 trains a day. Because the average subway commute is 30 minutes, the reply time was restricted to 20 minutes to ensure that most commuters would respond to the text message while still in transit
The Wi-Fi sensors in the city’s subway system would enable passengers to have Internet access and allow us to test their responsiveness to mobile offers as the number of people per square meter increased. In theory, there may be an upper bound. If you invite a half dozen of your colleagues to stand on that three-by-three section of tile with you, you may not be able to retrieve your phone from your pocket, let alone use it for any advanced function. In Tokyo, the cramming can reach 11 passengers per square meter. In Hong Kong, authorities are considering removing seats from subway trains to give commuters “more room to interact with their devices.” In the city of our study, however, the highest level of crowding we observe is five passengers per square meter, so that would be the upper limit.
The results suggest that, counterintuitively, commuters in crowded subway trains are about twice as likely to respond to a mobile offer by making a purchase vis-à-vis those in non-crowded trains. The response rate across the entire sample was five times higher than the average response rate of mobile coupons and twice the response rate for location-based mobile coupons.
On average, across all the trains, the purchase rates went up 45 percent when we went from two people per square meter to five people per square meter. These results apply after we controlled for peak and off-peak times, weekdays and weekends, mobile phone usage behaviors, and randomly sending mobile ads to users.
Because crowding is often associated with negative emotions such as anxiety and risk-avoidance, the findings reveal a positive aspect of crowding: Mobile ads can be a welcome relief in a crowded subway environment. The next challenge is to explain what causes this higher responsive rate. With its customer service call center, the wireless provider could survey passengers. So we subsequently surveyed some of those passengers who purchased the promotion. The surveys can help identify possible reasons that crowdedness affects purchase likelihood, after matching the purchase records and measured crowdedness from the field data.
The answer appears to be two words: Mobile immersion.
As more commuters occupy the train, individuals’ personal and physical spaces are invaded. This spatial limitation poses a behavioral constraint that leads to a reduction in the outside options of things to do. Behavioral constraint theory suggests that as more and more people invade one’s personal physical space, people adaptively turn inwards to filter out inputs from social and physical surroundings. To cope psychologically with this spatial loss and avoid accidentally staring at each other, people escape into their personal mobile phone space. As our experiment showed, they also become more susceptible and more welcoming to mobile ads. They spend more time browsing more intensively on their smartphones in an effort to retreat to a comfort zone and avoid eye contact or other interaction with the strangers surrounding them.
Turning inward via the smartphone allows us to tune out the outside noise and ignore or suppress our discomfort. This in turn amplifies our alertness toward what appears on our screens, especially if the advertisement is well-curated and fits a need.
In essence, the combination of smartphone and crowdedness creates an entirely new buying occasion. This occasion, as I pointed out with the data on subway rides, is a common and frequent experience worldwide. Even if we conservatively estimate a commute or travel time of 30 minutes, and assume that half of all rides are taken alone, the Top 10 subway systems provide marketers with 5.68 billion hours of consumer downtime every year to tap into.
The author of “Tap: Unlocking the Mobile Economy,” Anindya Ghose is a professor of information, operations and management sciences and a professor of marketing at New York University's Leonard N. Stern School of Business. He is also the director of the Center for Business Analytics at NYU Stern, and an NEC faculty fellow at NYU Stern. In 2014, Ghose was named by Poets & Quants as one of the "Top 40 Professors Under 40 Worldwide” and is the youngest receipient of the prestigious INFORMS ISS Distinguished Fellow Award. Reach him @aghose.
This article originally appeared on Recode.net.
