Internet Marketing

Internet and Advertising

The Internet is used as a tool by many companies to advertise, market, and interact with consumers.  Advertising expenditures in 2010 were reported to be $26 billion for Internet advertising, $22.8 billion for newspapers, $22.5 billion for cable television, $17.6 for broadcast television, and $15.3 for radio (Worden, 2011).  Internet advertising dollars are often aimed at getting the consumer to visit a company’s website.

One way to get more website visits is to increase the ranking of a company in search engines.  To get a company higher on the list of search results, a company will use search engine optimization.  Search engine optimization is the process where a company modifies or designs a website so that search engines can easily find and index a given website; this can improve its rank order on the search engine (Visser & Weideman, 2011; Wilson & Pettijohn, 2006).

Paid placement on search engines is also available.  Using the previous example, a company could purchase the keywords “gourmet coffee” from one of the search engines.  When a consumer enters those keywords into that search engine, the company will appear at the top of the list of results.  Consumers are first exposed to the paid listings at the top of the search results, before the unpaid search results.  This is keyword advertising and just one form of Internet advertising and marketing.

Users and Beliefs

Korgaonkar and Wolin (2002) explored the differences between heavy, medium, and light Internet users in terms of their beliefs towards Internet advertising, purchasing patterns, and demographics.  Heavy users were found to find Internet advertising honest, believable, entertaining, enjoyable, informative, and helpful (Korganonkar & Wolin, 2002).  The heavy users also had the most positive attitudes toward Internet advertising (Korganonkar & Wolin, 2002).  It is suggested that web advertisements for all users may not be the most effective way to reach an audience (Korganonkar & Wolin, 2002).  For heavy users, marketers might use livelier, less standard designs and clearly state ethical practices.  For light users care should be taken to design honest, clear, enjoyable, and informative ads.

In the study by Yoon and Kim (2001), four products were tested including (a) automobiles with high involvement and rational, (b) luxury watches with high involvement and affective, (c) fast food with low involvement and affective, and (d) shampoo with low involvement.  With automobiles, the Internet affected purchase decisions more than other mediums for highly involved consumers (Yoon & Kim, 2001).  Magazines and the Internet were reported as fast information sources for new automobile information (Yoon & Kim, 2001).

A study by Ozdemir and Kilic (2011) looked at website visualization and gender differences in young Turkish consumers.  There was a significant difference in Internet usage and gender.  Young Turkish males used the Internet more for searching and entertainment and young females used the Internet more for communication (Ozdemir & Kilic, 2011).  Males were reported to prefer online shopping over females (Ozdemir & Kilic, 2011).  It was also found that neither males nor females liked derogatory information about competition (Ozdemir & Kilic, 2011).

Attitudes toward advertising can affect recall and the level that consumers are persuaded by advertising.  Respondents with more favorable attitudes toward adverting had a higher recall of advertisements the day after exposure (Mehta, 2000).  Respondents with more favorable attitudes toward advertising were more persuaded by the advertising as well (Mehta, 2000).

Jayawardhena, Wright, and Dennis (2007) examined purchase intentions of online retail consumers segmented by purchase orientation in the United Kingdom.  Consumer purchase orientation was found not to have a significant effect on purchase intention (Jayawardhena, Wright, & Dennis, 2007).  Prior online purchase experience and gender were found to have significant effects on purchase intention (Jayawardhena, Wright, & Dennis, 2007).  Gender can also affect what information consumers are looking for.  One study on purchase intention on the Internet found that United States males find price most important and French males are more affected by uncertainty avoidance (Brettel & Spilker-Attig, 2010).

Benefits of Internet Advertising

There are several advantages for consumers to using the Internet for product and service information, including the speed and efficiency where large amounts of information are easily accessible (Hawkins & Mothersbaugh, 2010).  The Internet is a medium with many benefits including (a) constant message delivery, (b) audience selectivity, (c) multimedia capacity, (d) measurable effects, (e) global reach, (f) audience controlled advertising exposure, and (g) interactivity that makes it an advertising medium as well as a customer service communications forum and channel of distribution (Korgaonkar & Wolin, 2002).  Other benefits identified by Hawkins and Mothersbaugh (2010) include:

• 24-hour access by consumers.

• Targeting specific customers through customized promotions, even individual promotions.

• Easy updating – website design is relatively inexpensive and fast when compared to changing traditional advertising, signage, billboards, or even a Yellow Pages advertisement.

• Features can be customized for user benefit and interactivity.

The Internet also allows multiple communication modes compared with other mediums that only allow one type (Gurau & Duquesnois, 2011).  Television, radio, magazines, newspapers, and billboards are examples of one-to-many communications mediums and mail could be considered one-to-one communication.  One-to-many communication on the Internet can occur through website text, images, and sound on a website.  One-to-one customized communication can occur via email or newsletters sent through the Internet.  Many-to-many communication can occur with the use of forums and blogs.

Internet Marketing Strategies

There are a variety of strategies for companies to implement on the Internet.   When creating strategy for the Internet, it is important to keep the focus on the customers’ point of view of the website and functionality (Yannopoulos, 2011).  Pricing strategies are important to consider because consumers can easily compare prices between multiple websites to determine the lowest cost (Alijani, Mancuso, Kwun, & Omar, 2010; Yannopoulos, 2011; Collins & Winrow, 2010).  To have a competitive advantage, integrative strategies that combine pricing strategies with other marketing strategies might be needed (Collins & Winrow, 2010).

Differentiation is a possible strategy to match with pricing.  Differentiation is where non-price attributes such as delivery speed or service after the sale are promoted in marketing (Collins & Winrow, 2010).  Differentiation strategies can help buyers better identify the benefits of purchasing through one website over the other when prices are similar (Collins & Winrow, 2010).  Some other marketing strategies revolve around content and interaction with customers.  Some recent research has indicated that embedded videos enhance online advertisement and motivate consumers to purchase products (Alijani, et al., 2010).  Internet marketing can be in both push and pull forms.

 

Internet Advertising as Persuasive Communication

Commercial websites possess several of the characteristics of an advertisement (Hwang, McMillan, & Lee, 2003) and should have similar consequences about attitudes towards the ad (Jet & Lee, 2002).  Mehta (2000) conducted a study of 1,900 adults to examine attitudes towards magazine advertisements.  Participants who liked advertising felt advertising provided useful information and were more likely to notice, recall more advertisements, and be more persuaded by the advertisements (Mehta, 2000).

Consumers’ Attitude toward Internet Advertising

Ducoffe (1996) used an intercept survey in Manhattan to conduct research concerning attitudes toward web advertising.  Ducoffe built on his 1995 study that proposed several causes of advertising value.  Informativeness is one perceptual antecedent of advertising.  This is the level an advertisement informs consumers of product information so that they can make information based decisions (Ducoffe, 1996).  Irritation is another antecedent.  This is the level advertising is annoying, insulting, and offensive and consumers perceive this as unwanted (Ducoffe, 1996).  Entertainment is the third antecedent.  Entertainment is the ability of advertising to fulfill audience needs for diversion, enjoyment, or emotional release (Ducoffe, 1996).

Ducoffe (1996) developed a self-administered survey instrument to pretest attitudes towards advertising and media in general, and attitudes toward advertising in each of five media.  A second section asked Likert questions designed to measure the perceptual antecedents: informativeness, entertainment, irritation, and credibility.  Advertising, informativeness, entertainment, and credibility are positively related to consumer attitude and annoyance was negatively related to overall attitude (Ducoffe, 1996; Yuan, 2006).

The model from Ducoffe (1996) was expanded by Bracket and Carr (2001) to include demographic variables.  Bracket and Carr (2001) examined attitudes towards web advertising compared with attitudes in the Ducoffe (1996) study.  Demographic variables have a significant impact on perception of advertising value and attitude toward advertising (Bracket & Carr, 2001).  As stated by Bracket and Carr (2001), “If the situation dictates employing a limited number of items, one could feel comfortable operationalizing only Ducoffe’s advertising value construct” (p. 31).  Figure 2.1 illustrates Bracket and Carr’s antecedents of attitude toward advertising.

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Figure 2.1.  Model for antecedents of attitude toward advertising.  Adapted from “Cyberspace advertising vs. other media: Consumer vs. mature student attitudes” by L.K.  Brackett and B.  N.  Carr, Jr, 2001, Journal of Advertising Research, 41(5), p. 25.

Motives and Design

There are two basic types of motives in advertising including affective and cognitive.  Affective motives stress feelings and cognitive motives stress an individual’s information processing (Jose-Cabezudo, Gutierrez-Cillan, & Gutierrez-Arranz, 2008).  For utilitarian websites, where users are goal driven, high-quality task-relevant cues are important to help spawn impulsive sales (Parboteeah, Valacich, & Wells, 2009).  Task relevant cues are oriented toward efficient and effective execution of consumer tasks (Parboteeah, Valacich, & Wells, 2009).  In websites that are affective in nature and aimed at users trying to maximize enjoyment, mood relevant cues are important (Parboteeah, Valacich, & Wells, 2009).  Mood relevant cues are aimed to influence an online users’ emotion.  This could be visual appeal, graphics, the look of the website, or other things to create a mood.

Attitude of Consumers toward Corporate Websites and Brands

Attitudes towards a retailer’s brand transfer to attitudes about the retailer’s website and the formation of attitudes towards the website (Balabanis & Reynolds, 2001).  Highly involved consumers search for information before purchases, examine information in greater detail, and use more criteria in their buying decisions (Balabanis & Reynolds, 2001).  Highly involved individuals also process relevant information more conscientiously than less involved ones.  Involved consumers can react differently to a website than less involved consumers (Balabanis & Reynolds, 2001).  Aspects of a website related to the object of involvement (product information) are more likely to attract the interest of involved consumers and peripheral stimuli appeal more to uninvolved consumers (Balabanis & Reynolds, 2001).  The relationship between involvement and attitudes toward a website are partially dependent on website characteristics (Balabanis & Reynolds, 2001).  When assessing websites consumers can be biased based on preexisting attitudes (Balabanis & Reynolds, 2001).  Companies should consider the attitudes of consumers creating web strategy (Balabanis & Reynolds, 2001).  Mehta (2000) found that consumers with a more favorable attitude towards advertising were more likely to recall the brand and be persuaded by advertising.  People who had a higher motive for using the Internet for shopping found sponsored links and pop-up advertisements more informative, more entertaining, more credible, and less annoying (Yuan, 2006).

Korgaonkar and Wolin (2002) examined the relationship between a consumer’s level of web usage and likelihood of purchasing from the Internet.  The participants were divided into three groups of heavy, medium, and light users.  The heavy users spent up to five hours per day on the Internet, the medium group about three hours, and the light group about an hour per day on the Internet (2002).  Heavy Internet users were found to believe Internet advertising was honest and believable, entertaining and enjoyable, informative, and helpful, but also were the most likely to believe advertising is hard to understand and confusing (2002).  The medium group has lower ratings for online advertising being honest and believable, entertaining and enjoyable, informative, and helpful (2002).  Light users have the least positive views of Internet advertising (2002).  Overall, Korgaonkar and Wolin (2002) found that the more frequently Internet users are online, the more positive attitudes they have towards Internet advertising and the more likely they are to make online purchases.  The heavy users were more likely to be male and have the least education and income of all of the groups, the medium users had the highest income and education, and light users were more likely to be female.

In one study, more skilled Internet users perceived pop-ups and paid search engine links as less informative, less entertaining, less credible, and more annoying (Yuan, 2006).  Internet-related variables, such as skill level, performed well in predicting beliefs (Yuan, 2006).  Income, race, and age were not good predictors of beliefs towards online advertising in that study (Yuan, 2006).

Belief factors including information seeking, entertainment, economy, credibility, and value corruption, are significant predictors of attitude toward online advertising (ATOA) (Wang & Sun, 2010).  People who believe online advertising has a positive impact on the economy find advertisements informative and entertaining (Wang & Sun, 2010).  People who believe that online advertising is a social factor that conveys social and cultural values will have negative ATOA (Wang & Sun, 2010).

There have been several studies in other countries on consumer beliefs toward online advertising.  Wang, Sun, Lei, and Toncar (2009) studied Chinese consumers’ attitudes towards online advertising and found entertainment, information seeking, credibility, economy, and value corruption as main factors predicting online advertising attitudes.  Information seeking is a positive predictor of attitude toward online advertising (Wang, Sun, Lei, & Toncar, 2009).  This further supports Ducoffe’s (1996) findings that informativeness had a positive correlation.  Value corruption or the undermining of people’s values had a negative correlation (Wang, Sun, Lei, & Toncar, 2009).  The study further found that a positive attitude toward online advertising helps predict shopping frequency and advertisement clicking (Wang, Sun, Lei, & Toncar, 2009).

A study on online advertising by Wang and Sun (2010) compared beliefs in the United States and Romania.  The study found that in both Romania and the United States corruption belief negatively influenced attitude toward online advertising and information, entertainment, economy, and credibility positively affect ATOA (Wang & Sun, 2010).  Economy is the belief that online advertising is a key part of helping the economy (Wang & Sun, 2010).  Economy had the strongest correlation to ATOA and information was the second strongest predictor (Wang & Sun, 2010).  Positive ATOA significantly predicts advertisement clicking and reported online shopping behavior (2010).  Romanians overall had more positive ATOA than Americans (Wang & Sun, 2010).  Americans were also more likely to shop online (Wang & Sun, 2010).

Nasir, Ozturan, Kiran, and Kavram (2011) examined Turkish consumers’ beliefs about attitudes toward online advertising.  Turkish consumers’ beliefs were grouped under four categories including (a) functionality, (b) customization, (c) credibility, and (d) controllability.  The participants were found to have beliefs that ranked reliability and trustworthiness of Turkish website advertising low (Nasir, Ozturan, Kiran, & Kavram, 2011).  Overall, consumers do not like online advertising but realize it is essential for a company’s survival (Nasir, Ozturan, Kiran, & Kavram, 2011).  The highest reported mean beliefs about online advertising functionality (on a 5-point Likert scale) were that the ads are attention grabbing (3.4), necessary on the web (3.7), and creative and innovative (3.5) (Nasir, Ozturan, Kiran, & Kavram, 2011).

Designing Effective Websites

There are several factors to overcome in successful website design.  Physical interaction and evaluation of products on the Internet is quite different than in-store evaluation.  Consumers can pick up, feel, smell, and use all of their senses in a store.  To help overcome some of these obstacles, high quality photos and text with exhaustive descriptions and providing adequate information, can make up for the limitation of tactile information and reduce the perceived uncertainty for consumers (Zhang & Liu, 2011).  Second-party sources such as other consumers can also help overcome uncertainty (Zhang & Liu, 2011).  Perceived uncertainty about a product can significantly change consumer purchase intention (Zhang & Liu, 2011).  Tarafdar and Zhang (2007) examined determinants of website reach and loyalty by examining 190 websites.  Reach is the number of unique visitors visiting a website (Tarafdar & Zhang, 2007).  When considering reach, the most important factor for website design is the content of the information and its presentation (Tarafdar & Zhang, 2007).

Trust of Websites

Aghdaie, Piraman, and Fathi (2011) studied factors that built consumer trust in websites.  Trustor factors influence the tendency to trust and are concerned with psychological, interpersonal, experiential, and cultural factors of the consumer.  Trustee factors include reputation, security, design, and appearance of websites (Aghdaie, Piraman, & Fathi, 2011).

Wogalter and Mayhorn (2008) examined cues that affect perceived credibility and trust on the Internet.  The first study examined domain name suffixes such as .com or .gov.  Participants reported trusting 55% of information on the Internet (Wogalter & Mayhorn, 2008).  The domain suffixes .gov and .edu were rated highest in trust while .org was trusted significantly more than .net and .com (Wogalter & Mayhorn, 2008).  The second study looked at domain names and found that respondents in some gave substantial trust scores to fictitious names of organizations and websites.  Illegitimate websites could be created to deceive people and potentially destroy the reputation and consumer perceptions of credibility in legitimate sites (Wogalter & Mayhorn, 2008).

Website Design

Website design elements and color have been studied by several researchers.  Cyr, Head, and Larios (2010) researched colors used in design to illustrate different nationalities’ interpretations of the color.  It is recommended that elements of the website should match the design and style of the rest of the business (Ghanour, Benwell, & Deans, 2010).  Some studies have made suggestions based on the type of user a website might be aimed toward.  For light Internet users, honest, clear, enjoyable, and informative design is suggested, and for heavy users livelier design that incorporated clearly stated ethical practices of the company should be included (Korgaonkar & Wolin, 2002).  Researchers have also examined personalization of websites.  When people are provided general non-personalized information, they are less motivated to buy from a website (Thongpapanl & Ashraf, 2011).

Stevenson, Bruner, and Kumar (2000) found that simple webpage backgrounds are more effective than complex ones.  Complex webpage backgrounds had a negative influence on attitude-toward-the-ad, brand attitude, purchase intention, and attitude-toward-the-website (Stevenson, Bruner, & Kumar, 2000).  A black background was consistently the best performer in the study in effect on attitude-toward-the-ad, brand attitude, purchase intention, and attitude toward the website (Stevenson, Bruner, & Kumar, 2000).  The study included a video webpage; however, the authors warn that other pages might not have the same results.

Blanco, Sarasa, and Sanclemente (2010) examined the effects of visual and textual information in online product presentation.  Specifically, they looked at the effect of product images and textual information in a schematic versus paragraph mode and how it affects users’ recall and perceptions of the quality of the products’ information.  Schematic presentation refers to text in a chart, form, or table.  The results indicate that schematic display of textual information improves perceptions of information quality and consumers can process the information more easily (2010).  No significant effect on information quality was found with the presence or absence of a product image (2010).  When a picture of the product also appears with textual information users remember more information and consider it easier to remember when in schematic form (2010).  Without a product picture users could recall more product information and perceive it as easier to recall in paragraph versus schematic presentation (2010).

Marketing Messages

The text information that appears on a website is also important to its success.  A high-quality home page will boost non-sponsored rankings of a retailer for a keyword (Ghose & Yang, 2009).  Marketing messages designed for print should be no less effective when transferred to the web, given the same exposure opportunity (Gallagher, Parsons, & Foster, 2001).  Users may view a webpage for 45-60 seconds that would give a visitor time to read a maximum of 200 words (Nielsen & Loranger, 2006, as cited in Visser & Weideman, 2011).

There are some studies that examine elements that should be included on websites.  In a study of 160 students, Patsioura, Malama, and Vlachopoulou (2011) found that the most important information on a website was contact information.  In the same study, 74% of respondents reported preferring interactive and Internet-based communication over traditional phone or mail communication.  In a different analysis of 160 corporate websites, 66% of those websites contained communication about the company and brand, as well as sales information (Hwang, McMillan, & Lee, 2003).  High-revenue companies are more likely to have more functions on company websites than low-revenue companies (Hwang, McMillan, & Lee, 2003).  The most common audiences addressed by websites are consumers, business partners, and employees (Hwang, McMillan, & Lee, 2003).

Keller and Aaker (1998) performed an experiment that looked at three different types of presentations of marketing and how each affects consumers’ perception of corporate credibility in brand extensions.  Corporate credibility for this study was composed of three dimensions including, (a) corporate expertise meaning “the extent to which a company is thought able to competently make and sell its products and services,” (b) corporate trustworthiness meaning “the extent to which a company is thought to be honest, dependable, and (c) sensitive to consumer needs,” and corporate likeability meaning “the extent to which a company is thought likable, prestigious, and interesting” (Keller & Aaker, 1998, p. 358).

Keller and Aaker (1998) identified three types of corporate marketing that impact corporate brand extensions including (a) marketing that demonstrates innovation, (b) marketing that shows environmental concern, and (c) marketing that illustrates community involvement.  Activities that demonstrate innovation involve “developing new and unique marketing programs with respect to product or service improvements and new product service introductions” (Keller & Aaker, 1998, p. 359).  Environmental concern is demonstrated through marketing “designed to protect or improve the environment or to make more effective use of scarce natural resources” (Keller & Aaker, 1998, p. 360).  Community involvement is demonstrated through marketing that is designed to “contribute to the welfare of the community in which the firm is associated, as well as to society as a whole” (Keller & Aaker, 1998, p. 360).  They found that innovative companies that used innovative marketing for their brand extension had the highest improvement (Keller & Aaker, 1998).  The sample for this study was college students.

 


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