Reducing Customer Churn on Digital Advertising Platforms

Peter Juul Lund Andersen & Daniel Bendix Christensen

Student thesis: Master thesis

Abstract

This thesis aims to examine the drivers for customer churn within digital advertising and develop strategic recommendations on how digital advertising platforms can prevent churn. The research question chosen is “how can providers of digital advertising platforms reduce churn?” Literature within digital marketing has to this day focused almost exclusively on the prevention of churn by assessing only the advertiser-consumer relationship, presenting a gap in literature. We therefore develop a model from knowledge established through digital advertising ecosystem insights, consumer behavior, churn management theory and stakeholder analysis. This resolves in the development of the Digital Advertising Platform Churn Reduction Model. An abductive research approach was utilized. By critically reviewing existing literature on marketing and consumer behavior, we were able to form a knowledge basis to suggest new research. To narrow the field of research the thesis was limited to the SMB digital advertising industry in Scandinavia. Primary empirical quantitative data in the form of a survey on online consumer behavior, enabled us to establish present and future trends towards mobile devices as the primary driver for online behavior. Critically mapping the digital advertising ecosystem for the three key product areas, search, display and video, enabled an analysis on the supply and demand side stakeholders in the highly complex ecosystem. The identification of these stakeholders, allowed for additional research to identify which are key to diminish churn, namely the advertisers, agencies and publishers. Through three expert interviews with managers from online agencies, we found the reasons for churn of customers are their “inability to appropriately measure and understand return on investment”, a lack of “understanding the mobile implication on shift in consumer behavior and the importance of optimizing their mobile assets for better performance”, and lastly “a lack of knowledge about digital advertising in general”. By applying this to a case study on the largest platform provider, Google, we formulated strategic recommendations for digital advertising platforms to reduce churn. Focus should be on educating the three identified key stakeholders on the aforementioned reasons for churn.

EducationsMSc in Business Administration and Organizational Communication, (Graduate Programme) Final ThesisMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2016
Number of pages188
SupervisorsTorben Juul Andersen