From Free to Fee: Psychological Ownership and Advertising Appeals in Freemium Conversion

This study investigates how users’ psychological ownership of digital services influences their responses to different advertising appeals in freemium business models. Through a 2×2 factorial experiment using a cloud-based note-taking service, we examined how the interaction between psychological ownership (high vs. low) and advertising appeal types (attribute-based vs. benefit-based) influences advertising attitudes, which in turn can lead to premium subscription intentions. Results reveal a significant interaction effect: users with high psychological ownership respond more positively to attribute-based advertising, which details specific features and functionalities. Conversely, users with low psychological ownership are more effectively persuaded by benefit-based advertising, which emphasizes experiential advantages. These findings expand psychological ownership theory into digital contexts and provide practical insights for freemium services seeking to optimize conversion rates. By tailoring advertising strategies to users’ psychological ownership levels, digital platforms can more effectively encourage free users to upgrade to premium services, ultimately enhancing their business performance in competitive digital markets.