Marketing - Internet Advertisement

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Marketing - Internet Advertisement

  1. 1. CONSUMERS’ ATTITUDETOWARDSINTERNET ADVERTISINGAN EMPIRICAL STUDY Guided by : Dr. Sita MishraSubmitted by :Amit Dhawan (11EX-006)Bishnu Kumar (11EX-013)Harendra Singh Rawat (11EX-020)Kumar Abhishek (11EX-028)Pankaj Mohindroo (11EX-038)
  2. 2. ContentsWhat is IA ...................................................................................................................................................... 3Background ................................................................................................................................................... 4Consumer Response to Internet Advertising ................................................................................................ 5Research objective ........................................................................................................................................ 6Research Methodology ................................................................................................................................. 7 Questionnaire Methodology ..................................................................................................................... 7 Sample Size ............................................................................................................................................... 7 Methodology of analysis ........................................................................................................................... 7 Sampling Technique .................................................................................................................................. 8Demographics ............................................................................................................................................... 9Questionnaire ............................................................................................................................................. 11 Results and conclusions of Data Analysis ............................................................................................... 13 1. General........................................................................................................................................ 13 2. Advertising Utility........................................................................................................................ 14 3. Indignity ...................................................................................................................................... 15 4. Trust ............................................................................................................................................ 16 5. Price Perceptions ........................................................................................................................ 17 6. Regulations.................................................................................................................................. 19 Factors affecting general attitude towards Internet advertising........................................................ 21
  3. 3. What is IAAccording to consumers, IA includes many forms of commercial content—fromelectronic advertisements that are similar to traditional advertisements (e.g.,billboards, banner ads) to formats that are different from traditionaladvertisements, such as corporate Web sites. Thus, it appears that there areidiosyncratic differences in consumers’ perceptions of what constitutes IA such thatany specific definition of IA is likely to be a bad fit for measuring IA perceptions.Because the goal of the present research Project is to assess consumer perceptionsof IA, IA is described broadly as any form of commercial content available on theInternet that is designed by businesses to inform consumers about a product orservice. Hence, IA can be delivered via any channel (e.g., video clip, print oraudio), in any form (e.g., an e-mail message or an interactive game), and provideinformation at any degree of depth (e.g, a corporate logo or an official Web site).
  4. 4. BackgroundDespite the limited understanding of how consumers judge IA, there has beensubstantial commercial growth on the Internet of many forms of advertising.In addition to anticipating the monetary growth of the Internet, the majority of on-line businesses believe the Internet is here to stay and will generate sales in thefuture. Furthermore, the adoption curve for the Internet is quite steep, especially incomparison to other media introduced in this century (radio, television, cable. Thus,as many have predicted, investment in IA is likely to escalateinto the billions in the near future.Studies of consumers’ reactions to IA typically have quantified customers’judgments of Web sites in terms of consumers’ behavioral traces at the site (i.e.,counting the number of “clicks” and “hits”. These measures have been shown toboth overestimate and underestimate the number of visitors and exposures,however. Moreover, the indirect nature of these methods makes it difficult toascertain the meaning behind the results (e.g., whether clicking on a link was anaccident or intended behavior, and whether the loaded site satisfied the consumer’sexpectations).Coinciding with the growth in IA, there has been a plethora of guidelines about howto best reach and persuade the consumer market with the Internet. Many of theserecommendations have been based upon assumptions (rather than actualassessments) of how consumers react to IA relative to General Advertising.Relatively little is known about how consumers judge Internet advertisingand which components make up these attitudes
  5. 5. Consumer Response to Internet AdvertisingMost of the direct-response measures administered to consumers have assessedconsumers’ perceptions and usage of the Internet and its services. For instance,research has explored consumers’ attitudes toward on-line services and purchasingonline ; Web usage ; recall of the sites visited; actions taken toward intrusiveadvertising ; effect of banner ads on brand judgments ; attitudes toward Internetadvertising policies; awareness of the Internet itself. Yet, relatively less is knownabout consumers’ evaluations of IA specifically.In an important exception, Mehta and Sivadas (1995) assessed Internet user’sattitudes toward advertising on newsgroups and through e-mail. They found thatconsumers held negative attitudes toward newsgroup and e-mail advertising, evenwhen the message was directly relevant to the special interests of the group.However, their sample was limited to those who posted messages to the group.Those who merely read messages were not included in the sample. As a result, it ispossible that these unfavorable attitudes are due to this vocal sample’s perceptionthat they are competing with electronic advertisements for the group’s attention.In addition, attitudes toward newsgroup/e-mail advertising may not generalize toall forms of IA, including less intrusive ads (such as Web sites). Consequently, it isunclear whether the results would generalize to the entire Internet population’sattitudes toward IA in its many forms
  6. 6. Research objectiveThe objectives of the present research are to address following two questions:  What is consumers’ attitude ( positive or negative ) towards Internet Advertising  What are the factors that resulted in above attitude
  7. 7. Research MethodologyQuestionnaire MethodologyConsumers’ attitude towards Internet Advertising will be first studied through ageneral question and 5 other factors. Based on the following 6 points, questionnairewas designed and responses were collected. Factors considered for notingconsumers’ attitude is as below :1. General2. Advertising Utility3. Indignity4. Trust5. Price Perceptions6. RegulationsSample SizeResponses were collected from 122 participants, having different gender, age,education and income.Methodology of analysisFive options ranging from Strongly Agree to Strongly Disagree were provided toparticipants to answer each question. Scores were assigned to each option from 5to 1 respectively.We have assumed Strongly Agree and Agree responses as positive while StronglyDisagree and Disagree responses as negative.No. of participants voting for Strongly Agree and Agree were counted andpercentage from total participnats have been calculated which will give us theparticipants having positive responses.Similarly No. of participants voting for Strongly Disagree and Disagree werecounted and percentage from total participnats have been calculated which will giveus the participants having negative responses.
  8. 8. Percentage of participants having neutral reponse were also calculated.Graphs of these percentages have been plotted and analysis have been made.This analysis will solve the first objective of our Research ProjectSampling TechniqueRegression have been applied for solving the second objective of our research. i.e.to know that which factor leads to consumers’ attitude ( positive or negative ).Coefficient of Determination R2 have been calculated.Coefficient of Determination is a tool which actually tells us that how muchpercentage change in dependent varaiable can be explained by the IndependentVariable.In our Research Project Attitude of Consumers’ ( General question ) have beentaken as Dependent Variable and 5 factors will be take as Independent Variable.
  9. 9. Demographics Gender Analysis of Participants Male 40% Female 60% Age-wise Analysis of Participants 14-18 14% 25-34 46% 18-24 40%
  10. 10. Education-wise Analysis of Participants Studying in High School 11% Studying in Graduate course Post Graduate 13% 30% Graduate 32% Studying in Post Graduate course 14%Income-wise Analysis of Participants50000-59999 60000 per month and 11% above 10% Less than 20000 per month 40000-49999 38% per month 17% 30000-39999 20000-29999 per month per month 13% 11%
  11. 11. QuestionnaireS.No. Description Stron Agree Neutral Disagree Strongly gly Disagree agree 4 3 2 1 51 In general do you like or dislike Internet AdvertisingADVERTISING UTILITY2 Most Internet advertising is informative3 I like to look at most Internet advertisements that I am exposed to4 How often do you use Internet advertising to help make your purchase decisions?5 In general, how confident do you generally feel using information you see in an Internet ad to make a purchase decision?INDIGNITY6 Most Internet advertising insults my intelligence7 How often do you feel offended by Internet advertisements?8 How often have you felt misled by Internet advertisements?TRUST9 In general, I feel I can trust Internet advertising
  12. 12. 10 Products that I have used usually live up to the promises of quality and performance made in their Internet advertisements11 How comfortable are you about purchasing an item directly through an address or phone number in an Internet advertisementPRICE PERCEPTIONS12 In general, Internet advertising results in lower prices for the products I buy13 I usually get better value for my money in Internet advertised brands of products than in unadvertised brands14 What effect do you think Internet advertising has on the prices of advertised products?REGULATIONS15 I think the government should put less effort into regulating the content of Internet advertising I see16 Internet Advertising regulation should be done by the advertising industry through its member associations rather than by the government17 How do you feel about the amount of regulation which the government currently places on Internet advertising
  13. 13. Results and conclusions of Data Analysis 1. General Positive Neutral NegativeS. No. General Question Response Response Response1 In general do you like or dislike 38 28 35 Internet Advertising General Liking / Disliking Negative Positive Response Response 35% 37% Neutral Response 28%
  14. 14. 2. Advertising Utility S. Advertising Utility Positive Neutral Negative No. Questions Response Response Response Most Internet advertising 1 62 19 19 is informative I like to look at most 2 Internet advertisements 38 13 49 that I am exposed to How often do you use Internet advertising to 3 15 18 67 help make your purchase decisions? In general, how confident do you generally feel using 4 information you see in an 45 25 30 Internet ad to make a purchase decision? Advertising Utility Positive Response Neutral Response Negative Response 4 45 25 30 3 15 18 67 2 38 13 49 1 62 19 19The first factor consisted of items related to the value or effectiveness ofadvertising in meeting consumers’ needs.—that is, how informative andentertaining the advertising is and how useful it is for making purchase decisions.Indeed, informativeness and entertainment have been identified as positivelycontributing to the perceived value of IA. The informational item loading on thisfactor was, “Most Internet advertising is informative.” The majority of participants
  15. 15. agreed either somewhat or strongly that IA is informative (62%). However, theydid not hold such a favorable view of IA’s enjoyableness.In response to the entertainment item, “I like to look at most of the advertisementson the Internet that I am exposed to,” nearly half of the respondents disagreedeither somewhat or strongly (49%). Only a little over a third enjoyed looking at IA(38%). 3. Indignity Positive Neutral NegativeS. No. Indignity Response Response Response Most Internet advertising insults my 1 intelligence 54 22 24 How often do you feel offended by 2 Internet advertisements? 15 14 71 How often have you felt misled by 3 Internet advertisements? 16 16 68 Indignity Positive Response Neutral Response Negative Response 3 16 16 68 2 15 14 71 1 54 22 24Overall, relatively few respondents felt insulted, offended, and misled by IA. Again,this is not a global view of advertising by this demographic group: fewer feltindignant toward IA. For instance, only a quarter of participants (24%) agreed that“Most Internet advertising insults my intelligence”. In addition, few felt at least
  16. 16. sometimes offended (29%) or misled by IA (32%). Because consumers are incontrol of the IA viewed, they may perceive the self-selected IA to be appropriatefor them—essentially, less insulting, offensive, and misleading. 4. Trust Positive Neutral NegativeS. No. Trust Response Response Response In general, I feel I can trust Internet 1 48 21 31 advertising Products that I have used usually live up to the promises of quality and 2 37 51 12 performance made in their Internet advertisements How comfortable are you about purchasing an item directly through 3 21 20 58 an address or phone number in an Internet advertisement Trust Positive Response Neutral Response Negative Response 3 21 20 58 2 37 51 12 1 48 21 31In addition to confidence in using IA to make a purchase decision, more participantsfelt they could generally trust IA than felt they could not trust IA (48% vs. 31%. Infact, a higher percentage felt they could trust IA than liked IA (38%) fromAdvertising Utility Factor.
  17. 17. Only 12% of IA respondents agreed that the products they use generally fail to liveup to IA promises. This small percentage, however, is likely due to consumers’ lackof experience (or association) between IA and their purchase behavior. Indeed,over half (51%) neither agreed nor disagreed with this statement.Consistent with the findings for trustworthiness, 41% of the IA sample reportedfeeling somewhat or very comfortable purchasing an item directly through anaddress or phone number in an Internet ad. Overall, therefore, it appears that theInternet population finds IA to provide relatively trustworthy information 5. Price Perceptions Positive Neutral NegativeS. No. Price Perception Response Response Response In general, Internet advertising 1 results in lower prices for the 34 35 30 products I buy I usually get better value for my money in Internet advertised 2 22 50 28 brands of products than in unadvertised brands What effect do you think Internet 3 advertising has on the prices of 28 56 15 advertised products?
  18. 18. Price Perception Positive Response Neutral Response Negative Response 3 28 56 15 2 22 50 28 1 34 35 30Most did not perceive IA to increase prices. In fact, 35% stated that IA has noeffect on the prices of products they buy and 34% stated that IA lowers prices ofthe products they buy.This persistent and commonly- held perception is likely due to consumers’(1) awareness that Internet Advertising is comparatively less expensive thanGeneral Advertising and/or (2) experience in price comparisons between generallyadvertised and advertised items through Internet.The relatively high percentage of neutral responses again may be due to lack ofexperience in using IA to make purchase decisions.When asked whether IA in general increases, decreases or has no effect on productprices, the majority of the sample said that IA has no effect (56%).This may appear contradictory to the previously mentioned agreement that “Ingeneral, [IA] results in lower prices for the products I buy.” However, it may be dueto the difference in focus between “products I buy” and products in general. Forinstance, perhaps respondents have used IA primarily to find theleast expensive product. Or perhaps wording the question in terms of “products Ibuy” may have triggered thoughts about their own proficiency in using the Internetto locate good bargains.
  19. 19. 6. Regulations Positive Neutral NegativeS. No. Regulations Response Response Response I think the government should put 1 less effort into regulating the content 60 11 28 of Internet advertising I see Internet Advertising regulation should be done by the advertising 2 industry through its member 67 10 22 associations rather than by the government How do you feel about the amount of regulation which the government 3 24 54 22 currently places on Internet advertising Regulations Positive Response Neutral Response Negative Response3 24 54 222 67 10 221 60 11 28
  20. 20. The majority of the IA sample (60%) wanted less government regulation of the IAthat they view (vs. 28% wanting more). Most felt that IA regulation should be doneby the advertising industry (67%).The majority view that industry (rather than government) should regulate IASentiment against government regulation of IA seems to apply mainly to ads thatrespondents themselves view; when rating government regulation of IA in generalterms, most respondents were satisfied (54% say the amount of governmentregulation is just right).
  21. 21. Factors affecting general attitude towards Internet advertisingIn this section, the relation between the different questionnaire items withinindividuals is examined.In order to examine which factors contributed to respondents’ judgments of IA, theitems within each of the five factors were averaged and then regressed on overallIA attitudes (i.e. the degree to which respondents liked or disliked IA) usingstepwise regression procedures.R2 (Coefficient of determination) was calculated, which explains that whatpercentage variation in dependent variable can be explained by variation inindependent variable.The results indicated that 43% of the variance in overall IA attitudes could beexplained by the advertising utility factor alone.The next relevant factor, the indignity factor, led to an additional 2% explanation ofthe variance.With all of the factors in the model, an additional 4% of the variance wasexplained beyond what the advertising utility factor could explain, indicating thatthe advertising utility factor alone accounted for much of the variance in overall IAattitudes.To examine which specific items contributed (and to what degree contributed) torespondents’ IA attitudes, the 16 attitudinal items were separately regressed onoverall attitudes towards IA using stepwise regression procedures.The results indicated that 42% of the variance in attitudes toward IA could beaccounted for by responses to two of the four items in the advertisingutility factor: how informative IA is how enjoyable it is to look atConclusions  Hence, even when the questionnaire items were entered separately into the regression equation (rather than aggregated into their respective factor and then regressed), the majority of the advertising utility items contributed most to IA attitudes.
  22. 22.  More importantly, the enjoyment item contributed most to IA attitudes and the behavioral item contributed nearly equally to the informativeness item.

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