Download Abstract - California State University, Fullerton

Huei-hua Yang (Rachael)
Comm. 509
October 31, 2005
The Effectiveness of Internet Advertisements
Online users’ reaction is crucial to the viability of Internet advertising. Thus, this study
focused on consumers’ attitudes toward online advertisements and examined what elements
affect their online behaviors and purchasing intentions. Influential factors such as various
types of online advertisements and personal cognitive process are introduced, and a
two-phase mix research method will be conducted to better understand the effectiveness of
Internet advertising from online audiences’ perspectives. This study will help to better
understand Web users’ behaviors and preferences, and advertisers can find out how online
audiences view the advertisement.
Introduction
The Internet is a powerful and boundless tool that reaches numerous numbers of
audiences all over the world every day, and many people cannot even live without it.
According to statistics, the United States is the No. 1 country in the world with the highest
number of Internet users as many as 200,933,147 people (Internet resource, May 18, 2005).
Indeed, the Internet changes people’s lifestyles and stimulates the development of business.
For advertisers and marketers, this is especially a great medium to place advertisements and
reach customers because of its innovative characteristics. The Internet has distinctive
elements that combine with other media and much more. For example, online banners, one
of the most common types of Internet advertisements, contain not only graphics and text but
also streaming audio and video (Stafford & Farber, 2005). Such a highly dynamic and
interactive type of medium is so different from traditional media, and this enables its users
not only view the messages but also interact with the advertisements actively through
various forms, such as clicking the banners to obtain more product information or
participating the company’s on-line game. Internet provides a means of identifying
customers, differentiating them, interacting with them, and then customizing purchasing and
post purchase service (Schumann& Thorson, 1999). These actions increase the potential for
satisfied and loyal customers for companies. All of these advantages explain why online
advertising can attract so many advertisers and grow quickly.
According to a report by the Interactive Advertising Bureau in New York, the total
Internet advertising revenue in the United States in 2004 was $9.6 billion, a 33% of increase
than it in 2003 (Internet resource, May 18, 2005). Moreover, the Internet now represents 11%
of media consumption, a significant percentage compared to newspaper (5%) and magazines
(3%) (Tomei, 2003). This shows that Internet advertising has gradually become an important
part for many companies. Internet advertising is clearly a mainstream medium and one that
can no longer be ignored as a critical piece of any marketing mix (Schumann & Thorson,
1999). However, as the expenditure of Internet advertising grows rapidly like this, the
effectiveness of Internet advertising is still not clear enough. Measuring the effect of
advertisements is a hard thing in practice because there are too many uncontrollable factors
like audience’ personal viewing habits, preferences, environment, and many other influential
elements. In traditional media, researchers and professionals developed methods such as
reach, frequency, and gross rating points to measure the effectiveness of their advertisements.
However, because the cyberspace is a different media environment than TV or magazine,
online viewers’ reactions and ideas toward advertisements on the Internet can be different
from traditional media audiences, so the measurements used in traditional media may not be
accurate in online advertising. If Internet advertising is a medium with great potential and
draws such a large amount of revenue every year, it is necessary to measure its effectiveness
and understand its audiences’ attitudes so as to prove and also promote the usefulness of
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online advertisements.
Purpose Statement
The purpose of this two-phase mixed methods study is to better understand the effect
of Internet advertisements on its viewers. How Internet users view those different kinds of
online advertisements and viewers’ reactions will be the focus in this paper. The effects of
various types of online advertisements will be discussed as well. First, quantitative method of
online questionnaires for Internet users will be used to find out users’ favorite types of online
advertisements. Then, based on participants’ answers, the interviews of online users will be
conducted to have an in-depth understanding of online users’ behaviors and preferences.
Interview questions will cover why they prefer or not prefer certain types of Internet
advertisements, and how they are persuaded (or not) by the advertisements. Some important
factors that influence users’ purchasing intentions, such as the design of advertisements and
viewers’ personal involvements will also be examined.
Literature Review
Measuring Online Advertisements
Improvements in technology have led to advances in monitoring a host of consumer
Web site-related activities to assess the effectiveness of Internet advertising. However,
advertisers still have trouble understanding how to determine the success or failure of an
online advertising program and what they can do to improve it. Much of this is because of the
multiplicity of measurement tools and the lack of the Web measurement standardization.
There is no one best way to measure Web effectiveness (Stafford & Farber, 2005). An
advertiser would be advised not to rely on any single metric but to use multiple ones so as to
obtain more insight. For a branding campaign, ad impression is probably a better
measurement than clicks because it measures the overall visibility of the ad. For product
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information advertisements, clicks would be more relevant to provide a chance to take users
to a website or a new window that contain more product information (Stafford& Farber,
2005).
Some of current metrics for evaluating the popularity of online advertising include:
Clicks: a click is an interaction with an advertisement (Stafford& Farber, 2005). When an
advertisement is clicked, it means that the user want to learn more about the product or the
promotion advertised, though many times users click by accident. Clicks are still one of the
most useful measurements of the popularity of an online advertisement.
Page impressions (page request or page view): an estimate of total number of pages served in
a given period and thus a good indicator of a website’s popularity or audience exposure.
While this seems like a simple metric, it can be very complicated to measure because of
confounds in counting caused by pop-up ads (an ad that appears in a new browser window).
Unique visitors: the number of individuals with one or more visits to a website. The number
of unique visitors indicates the number of people the advertisement is reaching. Yet this
measurement also causes confusion such as multiple registrations from a single user because
he/she forget the ID and passwords, or multi-user IP address that can deflate the actual
number of unique visitors(Stafford & Farber, 2005).
AD impressions: a measurement of the response of an ad delivery system to an ad request
from a user’s browser. It is a broad indicator of the overall exposure of an advertisement on
the Internet. It gives advertisers a sense of the ad’s success in reaching an audience, where
success is conceived as brand recognition and lead to purchasing intentions. However, it is
not a good indicator of user involvement because it does not track whether users interacted
with the ad (Stafford & Farber, 2005).
The above measurements can help advertisers know the exposures of their online
advertisements, but are those ads really effective and viewers’ preferences remain unclear.
Therefore, this study will examine the effect of different types of online advertisements and
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people’s reactions to them.
Types of Internet Advertisements
With the audio, video, and interactive capabilities, the Internet is considered as a
creative medium that has tremendous opportunities. Graphic designers have developed
various forms to present online advertisements, including banners, buttons, text links,
sponsorships, advertorials, push technology, and interstitials. The following is an introduction
on each category.
Banners:
This is the earliest and the most popular type of online advertising. Banners come in a
range of sizes, but usually around 7 inches wide by 1 inch deep (Zeff & Aronson, 1999).
Although advertisers and publishers often say that Internet advertising have to go beyond the
banners, this format currently still receives the majority of Web ad spending and will continue
to be a Web advertising staple in the future. Zeff and Aronson’s research indicates that there
are three categories of banners: static, animated, and interactive. Static banners are fixed
images on a site and were the very first type of banner used in the early tears of online
advertising. The advantages of a static banner are its ease of production and its universal
acceptance by all sites, though it looks stale and boring. Static banners generate less user
response than animated and interactive banners. Animated banners are those move or spin or
have some form of action. They are extremely popular, and they often pull higher
click-throughs than static banners (Zeff & Aronson, 1999). Moreover, animated banners have
multiple frames, so they can deliver more information and graphical impact. As for
interactive banners, they are the ads that require direct interaction rather than a mere click.
This type includes playing a game, inserting information, answering a question, pulling down
a menu, filling out a form, or making a purchase.
Buttons:
Buttons are small banner-type advertisements that can be placed anywhere on a page
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and are linked to the button sponsor (Zeff & Aronson, 1999). Buttons often led to free
downloadable software, with words like “CD Now,” and this is how they attract users’
attention. They are commonly used as a way to have a constant presence on specific
homepages without paying the high fee of banner advertisements. Buttons’ low prices can
help build awareness for the advertisers by appearing on each page of the website, and they
can generate high response rate if properly offered (Zeff & Aronson, 1999).
Text links:
Text links are some of the least intrusive advertisements. It is a simple and least
bandwidth-intensive type of advertisement. Usually text links look like a search engine, with
a blank column and a search button. Some advertisers even have the text link change to
match whatever search the user performs. The power of these text ads is that they can be
tailored to any search the user performs, and this would be impossible through a banner
campaign (Zeff & Aronson, 1999).
Sponsorships:
Sponsoring a website can take many forms, and they allow an advertiser to have a
successful ad campaign without necessarily having to drive traffic to its website (Zeff &
Aronson, 1999). Sponsorship ads are usually integrated with the advertiser’s messages and
the information from the website. Consumers trust the brands they visit repeatedly to get
information, so putting messages on such trusted brands can often make a message more
powerful.
Advertorial:
An advertorial is a sponsorship ad that looks more like an editorial than like an
advertisement. It provides information in the form of an advertisement. In print publications,
advertisements that resemble editorials have a clear label of “special advertising section.” On
the Internet, there is usually no clear indication that these advertorials are not editorials. It
causes confusion on users and usually stimulates curiosity and catches viewers’ attention.
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This is a persuasive type of advertisement because people trust editorials, but advertisers have
to be careful not to create a negative brand impression by causing users to feel deceived.
Push technology:
Advertisements delivered through push technology are sent directly to a user rather than
waiting for a user to appear and click the ad. Push technology includes e-mail and an
advertisement that enables Internet users to sign up to receive updated information. When
users register, they choose what types of information are of interest to them. Then, when a
user’s computer is idle, the advertising screensaver appears, continuing the information the
user requested, and along with advertisements. Push technology works best when the
computer is always connected to the Internet so that the ads can appear very often (Zeff &
Aronson, 1999).
Interstitials:
Interstitials are advertisements that pop onto the screen and interrupt users. It sometimes
called “pop-ups” or “intermercials.” This ad model can be seen very often and is obtrusive.
Interstitials have different sizes and different levels of interactivity, from static to fully
animated ones (Zeff & Aronson, 1999). The advantage of an interstitial is that it increases the
chance to be seen by intrude into users’ screens. Users can dismiss the interstitials by clicking
out of it, but they will not know when the ads will appear or reappear, which are common
situations and can be annoying.
Product Involvement
Understanding different types of Internet advertisements helps to know how these ads
impact online users and what are people’s reactions to them. Yet online advertising contains
not only the design of advertising formats but also the users’ interactive levels. To better
recognize the relationship between the advertisements and users, it is important to understand
the users’ personal involvement factors, and product involvement is one of them.
Product involvement is an emotional state inside consumers that refers to the degree
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they feel a product category is interesting and exciting. Synonyms are interest, enthusiasm,
and excitement. Any product can stimulate these feeling in consumers to some degree, and
that is why involvement is an individual difference variable. For example, some people find
clothing and fashion more interesting and exciting than others do. Every product that is felt to
be involving is also felt to be important because we think that what we are interested in is
also important (Internet resource, May 15, 2005). Product involvement explains why different
people would generate different levels of purchasing intention to the same advertisement.
The effect of online advertisements on its audiences is also relevant to the Cognitive
Arousal Model. It can explain how websites, ad, and consumer characteristics affect viewer
processing of advertisements. Lord & Putrevu’s research indicate that ad response is modeled
as a function of the amount and type of thoughts generated upon exposure to the message.
The viewer’s cognitive state, ranging from passivity to arousal to distraction, is “affected by
the interaction of the consumer’s pre-existing level of involvement in the topic of the ad,
program involvement at the time the commercial appears, involvement in the ad per se, and
whether the source of the ad involvement is relevant or irrelevant to the message’s central
arguments” (Lord & Putrevu, 1999). Many advertisements are easy to understand, conveying
only one or two significant points of information. Simple brand recognition, rather than
extensive learning, may be a sufficient outcome for such ads. In such a scenario, the viewer’s
elaborative thoughts may be of greater value than extensive central recall. If initial product
involvement is low, high website involvement may serve to induce the desired state of
cognitive activity. It is better to avoid the combination of multiple antecedents of cognitive
arousal, since they may interact to distract viewers from commercial-relevant thought (Lord
& Putrevu, 1999).
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Research Questions
The focus of this study is to find out whether Internet advertising is effective or not in
strengthening consumers’ purchasing intentions, so the research question is:
RQ1: What is the relationship between different types of online advertisements and online
users’ buying intention?
The independent variable is the type of online advertisement, and the dependent variable is
users’ purchasing intention. This question is used to find out which type of online
advertisement can enhance users’ buying intention most effectively.
RQ2: What is the relationship between personal involvement and online users’ purchasing
intention?
This question is used to understand how and to what degree the personal involvements will
affect users’ purchasing intention.
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