Effectiveness of Online Advertising

UNIVERSITY OF WESTMINSTER

Advanced Independent Study

2MED7H1.Y DISSERTATION 2011-2012

Measuring the Effectiveness of Online Media Advertising Submitted By: Bharat Vyas. Nanduru (M.A. Global Media) Student Id: 135986641 [email protected] bharat.nanduru@westmin ster.ac.uk

Date: 30th August 2012

ACKNOWLEDGEMENT

This dissertation would not have been possible without the help of so many people in so many ways. I owe my deepest gratitude to my supervisor, Dr. Roza Tsagarousianou, for her kindly support, intelligent assistance and valuable motivation and advice from the preliminary to the concluding level, which allowed me to cultivate a comprehensive understanding of this subject. Without her considerable help, this thesis would never have come out.

Likewise, I really thank all those kind survey respondents. Without their contribution, I can never acquire such thought-provoking and prolific results. Furthermore, I am greatly thankful to all my dear friends who helped me to find these participants working for different ad agencies in India. Without my colleagues‘ help, I would not have gained access to enough candidates. I would also like to thank Maitri Chebiyyam, who as a good friend was always willing to help and give her best suggestions. Many thanks to Ram Prakash, Rajesh Inty, and Siddhartha for helping me collect ample information required to finish my thesis. My research would not have been possible without their support.

I would also like to thank my parents who were always supporting me and encouraging me with their best wishes.

Bharat Vyas. Nanduru 30th August, 2012

INTRODUCTION Advertising resources assigned to internet media have grown dramatically over the past few years. This growth is suggestively driven by search and performance. Measuring online advertising effectiveness is a very intricate process particularly in an ever changing environment where new resources are constantly developed every passing day. This research acknowledges the effectiveness of online advertising strategies based on consumers‘ perceptions of different types of ads. With an increasing spree of advertising

budgets, measuring measurin g the performance is more than a key k ey issue. Both the ad agencies and the advertisers do not wish to invest money even if they believe it is an apt decision in the long run. In addition to selecting the right pointers, evaluating the effectiveness of online advertising is also an important issue. According to Avi Goldfarb (2011, Vol.30, No.3, pp.380), response r esponse rates to banner ads have dropped dro pped dramatically d ramatically in the recent re cent past. On the flip side, online advertising on the websites has developed along two unusually discrete paths. First up, online advertising has advanced beyond outmoded banner ads to include many audio and visual features that make ads flashier and hard to ignore. Additionally, ‘Google’ has developed an extremely commercial non-search advertising strategy called ‘AdSense’ that creates an expected $6 billion in returns (Avi Goldfarb, 2011).

The rapid increase in the number of internet consumers is on a swift rise globally and is used by people irrespective of age and location. As we all know, internet has become a chief medium for entertainment, communication and is constantly developing replacing the outdated informative mediums. Outmoded marketing mediums such as television, magazines, newspapers, radio, etc. are becoming a thing of the past (George Scifo, 2010). Online advertising gives a wider coverage area that supports in making the advertisements reach wider audiences which may yield better results. Additionally, online advertising is much faster than offline advertising where the advertiser has a greater scope to deliver more information to the potential customer at a relatively low cost. Online advertising helps the advertiser in making an ad campaign more profitable by reaching the target audiences. The effectiveness of online media advertising increases by constant improvisation of ads that can be done with a lot of effective analytics tools available. For instance, the quality of the advertisements can be improved based on the feedback from the audiences.

According to George Scifo (2010), ‘’any form of advertising helps in impr oving impr oving the branding and online advertising stands a notch high in improving the branding of your company , service or product’’.

SCOPE To understand what dynamic role a product name might play in paying to the success of a company. It will be essential to comprehend the background of existing issues within the Dot-com industries and to categorize the main companies within the Dot-com industry and their brand building strategies. It focuses only upon the branding strategies for internet marketing. It also determines the effectiveness of the revolutionary Web2.0 technology in influencing the brand power over internet with respect to the pillars of branding in the perspective of its customers. According Accordin g to an article that th at was published in i n ‘’THE HINDU’’ (Pelle, Friday, December 07, 2007), online media advertising with its shorter promoting time, low cost and high rate of flexibility resulted in higher impact than offline advertising. The growth of internet and the amount of time spend on the internet have also been the crucial motivating factors. According to Mr Pelle (December 07, 2007, THE HINDU), ‘’with agents like dedicated spaces, pop-ups, pop -ups, floaters, banners and wallpaper ads making up the most of internet advertising, there were also a number of ways to express the efficacy of these agents’’ . In the recent past, online marketing and social media advertising

seem to explore all available options and revenues over the internet to market a product and to gain the maximum exposure. There is always a need for an online marketing company to fetch the corporate perceptibility for subsequent sales. The scope for these facilities is increasing at a mercurial pace. With every marketing agency hiring a web based project, these businesses bus inesses are reaching reachin g exceptional heights within wit hin no time.

LIMITATIONS Nowadays, many customers tend to shop online for everything, right from everyday necessities to clothing and electronics. While the advantages of online media advertising include the capability to reach a large market, it also has some limitations. According to Miranda Brookins of ‗ Demand Media’ (2011), ‘’consumers are so used to viewing ads on

television, television, flicking through ads in magazines and hearing radio jingles’’ . In the case of

online advertising, where an internet user can avoid clicking banner advertisements, avoid advertisements in online videos they watch and abruptly close pop-up ads as soon as they pop up on their screens. Additionally when a potential customer, visits a website, they stereotypically have a goal in mind whether it is to read the news or shop for a specific item of their interest. But when websites offer customers with infinite options they can easily get distracted. With so many options at hand, it becomes difficult for the customer to shortlist his choices. On the other hand, companies should limit themselves to certain type of advertising that yields the best response from their target customers. And the limitations of this study include: -

Given suggestions and interpretations may be limited.

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Biased and concealed responses by the respondents cannot be averted.

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Only a few aspects of the brand building strategies are considered. The data obtainable on this context may be limited.

BACKGROUND a. I nn ovati ovative ve ways of consumi ng I ntern et help boos boost the growth

Internet is probably one of the most powerful ways of marketing to reach billions of people worldwide. Internet instantly provides endless scope to market your product. Online media marketing has seen many changes in the recent past creating many millionaires, who tend to manage their own businesses by promoting and advertising their company online. According to PR Smith and Ze Zook (2011, 5th ed. Kogan Page, pp.4), ‘’a new marketing revolution has begun that put potential customers back at the centre of the organization and instantly paved way for the marketers to establish a new set of tools to listen to them and to motivate them to get involved with the brand’’ . This marketing

ideal is the beginning of a new creative age in online media advertising. There is always a good scope as companies realize the endless possibilities of engaging with the customers who can drive the business forward. There is a golden break for the marketers to create strong and defensible business, for; there has never been a better time to be engaged in marketing (PR Smith & Ze Zook, 2011, pp.4).

The main objective of online advertising is to reach out to large audiences quickly. According to Louisa Ha and Kim McCann, the key to measure the effectiveness of online media advertising is to differentiate the characteristics of online media consumers from their offline counterparts (2008, pp.576). In online advertising, the idea of ‗audience‘ is replaced by ‗users‘ because customers profusely use internet with specific targets. On the

flip side, offline media consumers can use media such as television or a radio sans any specific goal of consumption. Hence, online users are generally goal oriented than offline media consumers. Another important classification than can be drawn between online and offline advertising is that, in latter, such as television, consumers tend to skip the commercials by abruptly leaving the room or zapping through channels (Louisa Ha and Kim McCann, 2008, pp.576). In online advertising, the only way out for the customer is to shut down the computer abruptly or wait for 15 to 30 seconds for the ad to finish. , According to Mark Sweney (‘The Guardian’ 30 September, 2009), ‗‘the U .K. has become the first major economy where advertisers spend more than £1.75bn on internet advertising than on television marketing‘‘. According to him, internet has become the biggest

advertising sector in UK in less than a decade. Additionally, Mark Sweney throws a light on IAB‘s (Interactive Advertising Bureau) figures showing that UK advertisers spent

£1.75bn out of which 60% was spent on search based advertising on websites like ‘Google’ (‘The Guardian’ 30 September, 2009). However, UK is not only the first country

where online media advertising has taken over TV advertising in the recent times. Gian M. Fulgoni and Marie Pauline Morn states that, United States spend more than $20 billion annually on online advertising (2009, pp.134).

b. I nn ovative f orm ats and targetin g methods

According to Yulia V Smirnova (2008) ‘‘selecting the right customers is the driving factor in online media advertising’’ . She also throws a light on seven different types of targeting methods as classified by the ‗Advertising Research Foundation‘.

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Contextual Targeting: According to Anand Subramanian, CEO of ‘ContextWeb’

(2006) states that, ‘’contextual targeting enlarges the scope for marketers to interact with the customers by highlighting different offers to the same customer at regular intervals ’’ .

Contextual targeting is extensively used by various search engines to showcase

advertisements that are centred on the keywords used in the search box. However, contextual advertising can be defined as a form of advertising that is deliberately based on the content that is being displayed to the user in real-time technology which serves pertinent ads that appear on different forms of media. According to ‘DirectCPV’ (2010), ‘’contextual advertising is a best option for cost per view (CPV) advertisers, for it increases the chances to interact with the customers by allowing them to send information about various offers to the same customer ’’ . According to Acuity media group (May 18,

2012), ‘’for both direct response and branding, this type of advertising can add remarkable worth to the overall performance of the promotion’’ . Increased targeting,

direct communication with the consumers and performance are the predominant reasons why contextual targeting is an excellent way of promoting your product in the market.

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Behavioural Targeting: In behavioural targeting information about how the customer

uses the internet is collected, kept and associated with a cookie on the customer‘s browser, which can track you through different websites and online services. According to Kurt Opashl (March 11, 2009), ‘’the issues with this type of targeting have been associated with us for over a decade and have grown as more customers use more online services and more information has become readily available about your online behaviour’’ . The major

drawback of this type of targeting is that, the user who care more about the privacy issues are the ones expected to delete cookies. However Kurt Opashl concludes that, deleting cookies from the browser is not enough; because a new cookie would be stored the next time your browser loaded a banner ad (2009). Behavioural targeting has been in boom much recently. According to Lori Deschene (‘CBS News’ , May 1, 2008), ‘’ad networks specifically are companies which act as middlemen to collaborate with thousands of websites for access to data about visitor traffic and also to keep a record of user preferences and other details including visitors’ IP addresses’’ . Nevertheless, behavioural

ads are economical and profitable way to identify the potential consumers who have confirmed some level of attention. According to Jonathan Lemonnier (‘Advertising Age’ , 2008), ‘’‘retargeting’ mainly targets to locate the customers who dropped off midway through the path to a purchase and serve them a new ad in the hopes they will complete the purchase’’ .

Called remarketing in the offline world and sometimes classified as part of behavioural targeting online, one of the major advantages of this type of advertising is that, sellers can directly reach the potential customers who have shown some amount of interest. For

instance, in 2007, ‘Pepsi’ worked with ‘Tacado’, an advertising company based in United States to serve these kind of ads for the advertising of their new product; ‘Aquafina Alive’. This promotion targeted only health-conscious customers which attracted nearly three times the total number of consumers who clicked on the targeted ads (Lori Deschene, 2008).

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Demographic and Geographic Targeting: The success of online advertising can be

measured with the rapid growth of internet users worldwide, however, the most significant characteristics of online media advertising is its capability to deliver right pointers to specific targets. In this type of advertising, the demographic targeting is often used to target certain age group, geography and gender (Millward Brown, March, 2009). On the other hand, geographic targeting can be more technical which includes computers IP address provided by the customers. Unlike behavioural targeting which can be very effective for specialised goods, demographic targeting is generally considered as the best option for mass marketing. According to Yulia V Smirnova, geographic targeting is considered as the most effective for small scale industries that are willing to make profit from on the local searches (2008). For instance, geographic targeting has the ability to allow marketers to maximise their reach with the help of IP protocols and GPS coordinates.

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Purchase – Based Targeting: According to Jonathan Lemonnier, purchase based

targeting is solely based on the information provided by the customers about purchases made on websites (‘Advertising Age’ , 2008). This type of targeting predominantly depends on the purchase history of the customer and uses this information to print coupons with custom-made offers along with the receipt in real time. For instance, according to him, ‘’people who bought one brand’s shoes might be interested in more of the same or of another brand’’ (‘Advertising Age’ , 2008). Purchase-based targeting is supposed to be

very efficient to modify the databases for particular markets. With websites becoming mor e and more elegant and elaborate, it is always essential to evaluate the difference between the brands seen by the customer and the brands

supplied. In fact, only the former tend to have an influence on the potential

customer. Established on these ideas, various assets are evolving to assess adver tising coverage which helps im pr ove the effectiveness of advertising in terms of br and ing.

However, constant modernization and superior choice in targeting formats mean that evaluating the genuine ef fect of different advertisements is a very intricate procedure.

c. Observing the effectiveness of online Advertising is becoming a crucial challenge

Marketers identify determining the effectiveness of their promotions as a strategic challenge in their collaborative communications stratagem. The internet is supposed to be an assessable medium but promoters are still disappointed with the tools available to them for estimating its performance. Coping up with an exceptional amount of generated information, marketers express a necessity for clear and comparable data. The collaborative rich media advertisements may create more interactivity with regard to its click-through rates paralleled with mouse rollovers. The study of the comparative data uses descriptive and inferential indicators to measure the effectiveness of online media advertising. The interactive, rich media advertisements earned considerably higher clickthrough rates than the non-interactive, rich media ads in the recent past. It also earned more user commitment and stimulated more user interactivity. According to Burns and Richard J. Lutz, for marketers, online advertising promotion decisions may be intricate by the array of ad formats and inadequate knowledge about their effectiveness (2006, 35(1), pp.58). For that reason, they require better understanding about the measurement, use and effectiveness of interactive online rich media as well as more studies of the interactivity of consumers and ad messages (Stewart and Paul A. Pavlou, Vol.30, Issue.4, 2002, pp.381). According to them, the requirement for more studies of the interactivity of customers and ad messages is most possible due to the nature of the interactive medium, which requires a diverse way to theorise methods of advertising effectiveness. Several pointers are available to measure the efficiency of online media advertising, but the click-through rates are still the most commonly used indicators. But Jeff Smith affirms that, the generality of the click-through rate as a measure of the effectiveness of online advertising drops back to the initial days of the internet (2012). According to a study conducted by ‘eMarketer’ , online promotion has been hyped for its measurability that makes it easy for the sellers to assess the effectiveness and money value. Regardless of extensive appreciation that the click-through does not assess the full effect of an online advertisements — even ones placed with straight response intentions — and

demands for better branding metrics, many sellers still have faith in the easy-to-track click as their best performance metric (‘eMarketer’ , May 7, 2010). According to the following figure (Figure 1), click-through rate is supposed to be the most usually followed metric to measure the effectiveness than the amount of incremental sales, ROI and brand awareness.

F igur e 1

Source: http://www.public.site2.mirror2.phi.emarketer.com/Article.aspx?R=1007679

[Accessed May 22 2012] However, according to Jeff Smith, click-through rates are worthless to brand advertising promotions. For instance, according to him, ‘’ Ford Motor Company doesn't publicise in the hopes that somebody will click through on their banner and buy a car; they are instead trying to change consumer insight against brand funnel metrics ’’ (2012). On the flip side,

according to Xavier Drèze, ‘’ click-through rates are still the de facto measure of Internet advertising effectiveness’’ (2003, Vol.17, No.4, pp.8). However, gradually click-through

rates have tumbled.

Online media advertising can be an extremely operational brand constructing tool as long as you keep a few simple principles in mind, and effort to avoid the collective drawbacks as noted above. Don't be dejected by all the terminology - the basic guidelines of actual endorsing and advertising have not changed. Do, however, teach yourself as to the unique features of this technically empowered medium, in order that you can take full advantage of its capability and accordingly incorporate online advertising into your complete marketing mix. Yet again, the click-through rate is being indicated as some grand pointer of successful online advertising. Additionally, Doug Knopper, VP of advertiser solutions at ‘ DoubleClick ’, said, "While click-through rate is only one method of assessing online advertising effectiveness, its stability over the past several months reflects the mainstream adoption of online advertising at levels consistent with traditional direct response rates."

(Rob Graham, 2002). Rob Graham points out that, just because a promoter was able to encourage a customer into snapping on the ad, what implication does that have for the promoter's bottom line? Does this rise in click-through also come with an escalation in return on investment (ROI)? (Rob Graham, 2002). How about being able to illustrate solid branding capability by calculating the percentage of customers who saw the advertisement and got connected with it? I personally think promoters should try to look past the click. It cannot act as an indicator of effective advertising if it can't associate with a considerable change in profits. I also think promoters should look more closely at what rich media advertisements have to offer them and their customers.

LITERATURE REVIEW Objective 1: A nal ysi ng di ff er ent types of onl in e adver ti sin g

According to David S. Evans, internet based technologies are revolutionizing the stodgy $625 billion global advertising industry (2008, Vol.7, Article 2). Search based advertising techniques the most advanced and developed of these, have interesting economic features that result from the combination of keyword bids by advertisers and single homing. The evolution of the internet has not replaced the use of other media, particularly television. Rather than competing, these two media supplement each other. Internet always acts as an extension to the television experience. Many internet users believe that watching a video online balances their use of television. However, internet users try to look out for unusual and previously inaccessible content. This approach enables to be prolonged through online media and encourages an advertiser to mix the Internet with other media. Online advertising has come a long way in the recent past. When the internet was first breaking out into the mainstream, many advertisers did not understand the significance of online platform, and still depended on advertising from the perspective of TV and print mediums. According to ‘ AdJuggler Inc.’ , most online advertising was quite simple both in terms of the advertising itself, and the way in which it was sold (2009, pp.3-5).

Simply put, without advertisers there could be no scope for online advertising. All of the advanced ad technology in the world does not matter if there isn‘t any advertising to show, this view has been supported in the work of AdJuggler (2009). The advertiser‘s pivotal role is to provide actual and appealing ads and campaign parameters. In the end, it is up to the advertiser to choose what type of advertising they want to run and how much the agency is ready to pay for it. Apart from providing the actual advertising, the advertisers another major role is to observe various reports to see if the advertising is meeting their goals. The advertiser will eventually have to decide upon the renewal of a particular campaign, or spend their online advertising budget in other productive ways. An ad agency typically helps an advertiser with wide range of services which includes designing ads, developing an entire strategy for advertising and buying advertising space on the websites where their product will be most effective.

According to Maximillian Kaizen (2011, chapter8), there are eight types of Online ads, they are as follows: 

Banners,



Text-Based,



Advertorial,



Affiliate,



Sponsorship,



Classified,



Paid Search and



E-mail.

Banners are generally blocks of wavering sizes inserted into web-pages that use catchy graphics with a hyperlink directed to the destination of the advertisers. Nowa-days, banners come in full rich-media along with streaming video/audio. Richmedia and advertising offer a brand new experience to the users. Rich media formats have developed noticeably over the past few years. This advancement enhances the communicative strength of online advertising. Text based ads are purely related to the content that is manually added by the publisher. So, ultimately content plays a major role that has a direct impact on how we view it. For instance, according to Maximillian Kaizen (2011), advert snippets that occupy a smaller portion of the video tend to annoy the viewers, but on longer videos they can be tolerated and sometimes even appreciated. Online advertising began in the past decade, when the first banner ads were placed in commercial websites (Zeff & Aronson 1999). Even though there are quite a few forms of online advertising, such as banners and pop-up windows, banner ads are considered as the most widespread. Banner ads have gradually ruled online advertising and have become the usual marketing format on the internet (Cho et al. 2001, pp.48). Banner ads are oblong displays on a web page that function as a preface to the customer to discover more by clicking on the banners (Singh et al. 2000, pp.19). Clicking on the banner directs the visitor from the current web page to the promoter‘s web page. In this manner, banner ads are used as connectors to bring potential consumers to a site, presenting a computerized link to the promoter (Briggs & Hollis 1997; Bellizzi 2000).

Clickable banner ads are believed to be the first gateway to entering the world of interactive electronic markets (Shamdasani et al, Vol.41, No.4, pp.16 2001). Advertorials are those paid reviews that happen online mainly through the blogosphere. But according to Merriam-Webster, an advertorial is an advertisement that is usually written in the form of an article that looks exactly like any other autonomous news story from a magazine or a newspaper. Affiliates are also called as commission based advertisements where in the publisher chooses everything including the banner, text links and the review. Advertisers utilize an established affiliate system to publish ads and manage the cost-per action or cost-per click payment (Maximillian Kaizen, 2011). In the field of marketing, sponsorship is defined as the establishment of a deeper relation and understanding between an advertiser and a publisher. For instance, ‗‘this content is brought to you by x‘‘ brands paying for specific valuable pieces of content which consists of a video or a research or on-going conferences. According to Hollis Thomases (2001), Micro advertisements are categorized by a low barrier to entry, both in terms of cost and in the number of impressions required. Classifieds are the best example for micro ads that can actually lend informational and value added content to the user‘s experience. According to Michael Zimmer (2006, Vol.32), paid search is a unique example that motivates the online consumers to simply click on web pages listed significantly in the results, yet not essentially the most appropriate to their search query. On the flip side Eszter Hargittai (2003, pp.11-12) warns that, these search engines that are driven by profit motives might direct people away from the most suitable and better quality sites in favour of those that have paid the highest bids for the placement on the results page irrespective of their quality. E-mails and social networking offers advertisers a new platform for expression. Even though e-mail spam is a major hindrance, opt-in e-mail provides the best results for online advertising. Internet users spend a tremendous amount of time using different communication services on the Web. This use of media technologies including different social networking sites generate added advertising space which provides ad agencies a nd publishers to target a large sect of people. Nonetheless, the advertisers must assess the efficiency of these new platforms in relation to their own communication methods. Today, internet tends to play a vital role in purchase processes. Many internet users refer thousands of websites before buying a product of their choice. Internet is becoming

a highly powerful medium, just like a TV in the earlier days. Internet users know how to make the most of resources accessible to them, for example, retail websites, product reviews, comparison between different products and websites etc. This led to the development that underpins the significance of conducting a detailed survey regarding the choices of the users by the advertisers. However, according to PR Smith and Ze Zooke (2011, 5th ed. pp.283), new form of advertising include; -

User generated ads,

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Location-based ads,

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Apps- the new ads,

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Creative ads and

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Behavioural advertising and contextual advertising.

But most of the companies today will be aware of what stimulates discussions in social media when it comes to ad promotions. ‗‘ Are there any aspects that lend themselves more to social and user based content?’’ (PR Smith & Ze Zooke, 2011).

Online media advertising gives a broader scope for the organization to identify what new trends or business styles are evolving that may affect the company‘s product? Hence, self-exploration plays a pivotal role in building an advertising strategy.

Objective 2: D efi ni ng th e aim s of on li ne commun i cations str ategies

Although the marketing literature accepts that communication strategies play a vigorous role in channel functioning, it offers no incorporated theory for channel communication. According to Jakki Mohr, & John R. Nevin, communication in advertising channels can function as a method by which credible information is communicated, programs of coordinated and commitment is fortified (1990, pp.36). Developments in communication strategies now empower the promoters to take advantage of an extensive range of available online tools that go beyond the outdated exchange between search and display so as to develop their online communications. With the introduction of the internet as a fastest-growing advertising medium and a fresh form of mass communication channel, whether the idea of advertising chaos

still applies to the online environment becomes the main concern. The internet, with its twofold characteristics of being both a self-paced medium and confined calls for an innovative theory of clutter as promotions of different formats are being used on the internet.

According to Satya Menon and Dilip Soman, a primary challenge in establishing effective online advertising is to confirm that the ad not only appeals to the potential customers, but also to create interest in customers to know more about the advantages of the product (2002, vol.31(3), pp.1). According to Stacy L. and Weathers, the vague nature of e-commerce may cause customers to be ambiguous about whether products purchased online will satisfy their needs or make up to expectations. Such uncertainty is an element of buyer risk that result because the actual product of a purchase choice can only be acknowledged in the future (2007, Vol.83 (4), pp.393). The main challenge to create an interest and educate the consumers has become primarily important in the field of online advertising. In this field, ample interest and encouragement on the part of the customers is required to interact with the ad and to access suitable information about the new product. However, some promoters consider that online advertisements have a role in creating a better brand awareness and image (Satya Menon & Dilip Soman, 2002). The internet as a communication medium is ultimately different from the other media on several dimensions such as interactivity, control, dynamic content and depth of content accessible to the customer (Hoffmann and Novak, Vol.60 (3), 1996). We have a comprehensive range of online assets available which can be used in different ways depending on the aims of our brand promotions. For each one, specific measurement pointers are used to assess the final role played by online resources to enhance the effectiveness of the brand strategy. For instance, according to

Ulrike

Gretzel,

information

technology

and

advancement

in

online

communication strategies has had an incredible effect on the tourism business over the past few years. Due to increasing globalization, it has become difficult for the marketers to keep pace with the advancement of new technologies, the development of ground-breaking advertising strategies and the changes in the buyer market along with the growing competition (2000, Vol.39, pp.146). Hence, it is argued that information technology has led to a number of remarkable changes in the expectations underlying different communication strategies.

The online medium offers us a unique opportunity to target and reach a desired section of customers in an engaging and original fashion. According to Anuskha Subramanian (‘Business Today’ , August 19, 2012), ‘Hindustan Lever Limited (HUL)’ , India‘s biggest consumer goods enterprise, relies strongly in the power of

new communication technologies for an effective communication with their target customers. She also affirms that, other multinational companies like, ‘PepsiCo’ and ‘Coca Cola’ are also betting on the power of new advertising strategies. According

to Avi Goldfarb and Catherine Tucker (2010), ‘’the US$11.2 billion online advertising market has become much more sophisticated since the primitive days of

simple banner ads’’ . Today sellers can entrap and attract the viewers with

flamboyant graphics, video advertisements and flash animation that are practically difficult to overlook. Others take a more low-profile, yet directed approach using informatively relevant advertisements, such as inserting text ads for computers on a technology site. For instance, Google‘s ‘ AdSense ’ fetches in about $6 billion in yearly revenues through its targeted contextual ads, which ‗Google’ claims have been seen by an expected 76% of internet consumers throughout the United States (Avi Goldfarb & Catherine Tucker, 2010). According to Avi Goldfarb & Catherine Tucker, most of the online advertising campaigns use relevant key points as a data from a large collection of web surveys that observed the effectiveness of various advertising strategies (2010). This allows us to draw a comparison between targeted ads and professed flashy ones that highlight pop-ups, video ads, or even advertisements taking over the whole page. They concluded that, flash advertisements lured higher number of buyers to buy the product or service. An expected $664 million is currently spent on online advertisements that are both directed and flashy (Avi Goldfarb & Catherine Tucker, 2010). As a result, advertisers are always in a dilemma about how much amount of money should be allocated for online advertising. Rises in online advertising budgets should rely on relevant performance measures which ultimately aim to assess the effectiveness of online advertising strategies in terms of performance of the brand and growth of offline sales. One of the reasons for ‗ Google‘ ‗ AdSense’s’ continued success is that its discreet textual ads are assimilated impeccably with Web content. In my opinion, a refined methodology might serve as the best way for companies to confirm customers that their privacy matters. In summation, according to Sebastien

Yanni (‘Online communication strategy’ , online), information technologies and online communication strategies offer many opportunities for promoters to: a)

Increase productivity,

b) Enhance logistic follow up, c)

Gain new customers,

d) Start new online websites, e)

Improve new operations and

f)

Develop customer relations.

Along with customer interaction, branding and reducing acquisition costs also play a pivotal role in online media advertising. Microsoft Advertising has proven the significance of online media advertising for brand promoters by establishing a transparent link between online campaign engagement and measures of positive brand impacts (‗ Microsoft Advertising’ , 2010). According to Aaron Siegel, branding has the capability to bring many potential clients immediately after you've ran an ad campaign successfully (2006). Also, according to Yadav and Varadarajan, promoters also show interest on how to relate technology to communication. Hence, interactivity can be theorized as a distinguishing characteristic of computermediated communication in the open market that tend to increase with the mutual controllability, promptness and awareness of communication as observed by consumers and companies (2005, Vol.33. Issue.4, pp.585). According to Jothi & R. Shakthi Prasad (2011, pp.235), ‘’promoters now target more over to social media due to high rush in varsity of audiences’’ . So they use this space as the supreme

standard to communicate their brand and build active brand uniqueness through extremely effective and interactive communication strategy. Social media advertising holds some benefits like, spreading your brand to the potential customers; educating target groups about the various advantages of the brand and making the buyers interact and keep them engaged with the brand along with motivating healthy competition in the market (Jothi et al, 2011, pp. 236). Hence, there is always a need to study the best way of communication strategy in branding the product especially in social networking sites and evaluate its reach among the people and their insights. Alongside, it is clear that the new media and its technology is a developing trend in communication strategies which attract almost all the people, if they have basic knowledge of computers. Another important issue

for the promoters is to reduce the purchase costs of getting new customers. According to Renee Warren, knowing customer purchase is an investment is the key to doing it right and reducing the cost of getting new customers (2012). Longterm planning gives the promoter an opportunity to engage with the target customers and to evaluate short-term plans. ‘’ This practise is like a good return on a stock investment, i.e. when reinvested, it generates even more returns’’ . (Renee

Warren, 2012). Andy Narayanan confirms that, lack of proper knowledge about customer acquisition costs might have a great impact on the viability of a business structure (2010). For instance, if a company needs to pay $1 for each click to initiate customer acquisition through online promotions, 1 in 5 clicks end up in a customer signing up. So, that‘s equal to $5 to gain a new customer (Andy Narayanan, 2010). He affirms that, managers and promoters should think and understand about how to reduce customer acquisition costs to increase the credibility of a business agenda (Andy Narayanan, 2010). Hence, customer interaction, branding and reducing acquisition costs are three different goals that are not contradictory, for each of these goals use different indicators to measure their effectiveness. The following table (Figure 2) illustrates the most commonly used online advertising units and their respective sample costs.

F igur e 2

Source: http://jiad.org/article66 [Accessed January 21 2012]

Objective 3: Ef fi ciency of M edia mix

According to Kim T. Gordon, exposure in multiple forms of media will affect the target consumers‘ decisions to buy what the company promotes; this as a result generates a consistent involvement that reflects positively on the company (‘Entrepreneur’ , 2007). Observe the type of media customers are exposed to; that may change their decisions to buy what a company promotes, and choose a mix of the best forms. For instance, web sites possess an ability to carry flashy and deeper content and more complex communication than other forms of media (Kim T. Gordon, 2007). On the flip side, outdoor advertisements deliver a quick punch of information. Companies that tend to use just one or two methods to reach their target customers frequently encounter difficulties keeping them involved and also lose track of the competitors who make steady profits using other forms of media. By choosing a perfect media mix, a company can maintain frequent relationship with their consumers without boring or annoying them. With the advancement of communication technologies, customers are gradually using different types of media simultaneously. Therefore, an effective integrated marketing campaign makes profit from the strengths of individual media. Customer satisfaction towards an ad campaign has therefore become the main concern to the media mix strategy. Hence, it has become essential to recognise and estimate the influence of media mixing i.e. promoters need to categorize the effect of mixed media promotions involving both the internet as well as traditional media such as TV.

Online advertising is gradually becoming a part of the media mix for many companies. ‘’ Advertisers across all media posted surges in their online advertising presence since 2002, and a slate of media companies reported large growth in advertising revenue during 2003’’ (Ginger Rosenkrans, Vol.6(5), 2005). According

to Ginger Rosenkrans , online advertising revenue reached $7.3 billion in 2003 (Vol.6 (5), 2005). She also adds that, online advertising's supporters hype online advertising as the most effective of all media, stating that it delivers an enormous amount of data not available with offline media. According to ‘Print Power’ (online source), a pan-European organisation committed to supporting print media states that, the key to a successful advertising campaign is to maintain relation with the potential customers through attention-

grabbing content before offering a worthy product or service. An effective advertising campaign yield best results when print media is used with other media as one element of a unified solution. ‘Dynamic Logic’ , part of global research agency Millward Brown, found that addition of magazines to a mix of internet and television increases brand reputation by 44% and purchase target by 15% (‘Cross Media’ , 2012). Additionally ‘Cross Media’ highlights the report published by ‘ The Financial Times’ in 2011 stating that, the grouping of print media and internet also increases effectiveness, with brand commitment 26% higher than using just print or internet medium (2012). According to George S. Yip, e promoters should be aware of the fact that, the internet blurs the marketing mix. He also argues that, traditional marketing, like print media can separate each element of a mix as they hold separate physical personifications (2000, Vol.11 (4), pp. 13). Furthermore, ‘Print Power’ (online source) also confirms that, print media is ideal for marketing because it is

available in large numbers and can be easily accessed.

Reading a newspaper, magazine or a pamphlet requires full attention of the reader and it also delivers the means to escape today‘s ‗always -on‘ culture. However, reading print allows the reader to pay attention fully on the editorial and marketing content. Whereas on the flip side, all essentials of the marketing mix appear on the same web page and at the same time which can distract the customers. Lauren Indvik (‘Mashable Business’ , January 19, 2012) reports that, according to a study conducted by the ‘eMarketer’ , online advertising is estimated to make $39.5 billion in sales by the end of this year, which is equal to 23.3% increase from 2011 and compared to a sum of $33.8 billion on print (Figure 3).

F igur e 3

Source: http://mashable.com/2012/01/19/online-advertising-surpasses-print-2012/

[Accessed February 12 2012]

Although different communication strategies and information technologies are coming up, spending on tele-marketing promises to be essentially unaffected by rising online ad budgets.

F igur e 4



From the above graph (Figure 4) it is evident that U.S. advertisers are likely to spend around $72 billion on television advertising in 2016. On the other hand, the forecast for print media is quite predictable. Advertisers are expected to continue reducing their advertising budgets on print media for the next half decade as the following graph (Figure 5) illustrates:

F igur e 5



Lauren Indvik (‘Mashable Business’ , January 19, 2012) concludes that, ‘’generally , it seems to be a strong year ahead for the ad industry, with total U.S. ad spending forecast to grow by 6.7% to $169.5 billion and a total ad spending is set to reach nearly $200 billion by the end of 2016, out of which online advertising will account for a third’’ .

Optimisation of advertising budget also plays a pivotal role in online media marketing. Increasing the percentage of online marketing in the media mix can be a way of targeting a wider population for the same budget. However, there is no predefined rule regarding the ideal budget allocation. While it is comparatively easy to frame an online marketing campaign, appropriate budget allocation becomes a herculean task. In today‘s declining

economy, many advertisers are forced to reduce their advertising budgets to meet the new challenges of the market. According to Savitz Research Solutions (2009, pp.1), using statistical study we can identify the impact of online advertising budgets and also measure the effectiveness of radio, TV, magazine and newspaper.

F igur e 6

Source: http://savitzresearch.net/documents/OptimizingAdvertisingBudgets.pdf


According to the above statistical analysis (Figure 6) it can be inferred that, National TV was least efficient during October. Also, radio is was not fully operative in the metro areas. Alongside, newspaper advertising was constantly unproductive; hence, expenditures in print advertising can be drastically reduced. Direct mail showed the highest ROI because of the depth of mailing throughout the year (Figure 7).

F igur e 7

Source: http://savitzresearch.net/documents/OptimizingAdvertisingBudgets.pdf


‘’Therefore, the total potential savings is expected to be $11.25 million or 22% of the advertising budget’’ (Savitz Research Solutions, 2009, pp.4).

According to Richard Schmalensee, an advertising agency‘s budgets may rely on how their customers allocate their marketing budgets across media and there is also a relative difference in media mix among agencies (1982, pp.1). Porter argues that, the minimum amount of advertising budget required solely varies with respect to the size and characteristics of the potential customers an agency tries to reach (Schmalensee et al., 1982, pp. 19). On the other hand, newspapers are highly confined, because their potential consumers are spread across small areas that make them reachable to small marketers. Even though most of the marketers identify the benefits of the internet, mainly in terms of offering additional reach, precisely evaluating media mix effectiveness is no stress-free task. The Online Publishers Association (OPA) hired Millward Brown ‘IntelliQuest’ to carry on a media mix study to know how online promoting can work in amalgamation with offline advertising. According to this research, advertisements that are exposed online as well as on TV are expected to recall more by the customers (Online Publishers Association, March 2002, pp. 2). Contrarily, this research also states that, online ads are probably more seen by the customers than TV advertisements. Advertisers should have patience to re-examine their media mix to add online medium so as to improve effectiveness of the whole campaign.

Objective 4: E conomics of on li ne adver ti sin g

Online media advertising has developed promptly in the last decade. The exceptional features of online media advertising include the use of data collection tools and Internet based technologies to aim and track potential customers. It now accounts for almost one-

seventh of all advertising expenditure and adds to the majority of revenues for most websites (Davis S. Evans, 2008, pp.1). It is also expected to grow rapidly as more users spend time on internet using their personal computers as well as other devices like TV and mobile phones that are coupled to the web. Like modern finance, online media advertising also depends heavily on cutting-edge statistical and economic methods.

According to Rachel Arandilla (‘1stwebdesigner’ , 2011), the first ever online ad (Figure 8) appeared on the internet in 1994 which was advertised by ‘ AT&T ’ and was featured on ‘HotWired’. In the beginning, publishers and promoters began to experiment on various

types of ad formats and internet-based technologies available to them.

F igur e 8

Source: http://www.adweek.com/adfreak/looking-back-first-banner-ad-maybe-19834

[Accessed June 4 2012]

Online media advertising was at its best during the late1990s, it was only a decade later that the measurement of online advertising effectiveness was even considered. According to Davis S. Evans, in 2001, revenue in the U.S. raised to an expected $7.1 billion which is equal to

about 3.1% of overall advertising expenditure and the industry reclaimed

momentum by 2004 as the business model for ―Web 2.0‖ came together (2008, pp.3) .

Advertisers were blowing billions of dollars into dot com companies at an alarmingly fast rate. Yahoo! could charge up to US $30 to even US $100 to run these banner ads. At its height, internet spending has reached US $8.2 billion (Rachel Arandilla, ‘1stwebdesigner’ , 2011). Gradually advertisers understood that online banner ad campaigns stand nowhere close in comparison to an effective 20-second TV commercial or a full-page newspaper/magazine ad. According to Magid Abraham, co-founder and CEO, ‘ComScore Inc.’ , in case of TV, there is a stability of allocated advertising that extents to an average of

160 spots per viewer per day approximately. Nevertheless he also states that, budgets have continued to increase even as the number of TV viewers during the prime time has weakened (August 2012, pp.7). On the other side, according to a survey conducted by ‘PricewaterhouseCoopers’ and sponsored by the ‘Interactive Advertising Bureau’ (IAB) in

the first half of 2007 alone, advertisers in the US spent more than $10 billion on online advertising. That was about 14% of all advertising spending (‘PricewaterhouseCoopers’ , 2008, pp.3). In early 2000, almost all the dot com industries went bankrupt one after another. During this period, U.S. advertising sector had to witness a drastic fall from $8.2 billion to $6.2 billion. Hence, at this stage, online media advertising was considered as an unstable medium to invest huge amounts of money for campaigning purposes. Soon after the dot com bubble burst, search based marketing grew at a mercurial pace in 2003. Advertisers and publishers considered search-based marketing as the most efficient and reliable form of advertising. However, as different ad formats and information technologies have evolved in the recent years, it has become evident that not all formats of online advertising actually have an impact on the customers. In the case of direct- response marketing, online advertising has been a blessing. But, most of the advertisers are apprehensive about the after-effects of this type of advertising. Thus, online advertising remains a experiment for branded promoters, who are still uncertain about how to use the medium efficiently. Internet advertising is particularly viewed as a promotion tool for selling services or products. This market developed during the 20th century as new information technologies for mass communication were exposed and executed. It is predominantly designed for making sales of products and services using different advertising strategies. Costs of different form of ads also vary, but the most popular is cost per viewer. Online media advertising is completely dissimilar from traditional media advertising. Former uses new information and communication technologies available within the internet that permits the marketers to accurately reach their target consumers. Online advertisers are still looking for how to distribute 100% of their expenditure efficiently. The worldwide online advertising industry is estimated to worth $428 billion in returns this year, according to ‘ZenithOptimedia’ , a marketing firm (‘The Economist’ , July 6, 2006). Many advertisers still believe that pay-per-click is more

efficient than the traditional marketing. However, some advertising companies are still trying to search other ways of charging marketers for users‘ actions. According to

‘eMarketer’ , U.S internet advertising expenditure might increase thrice the amount of

expenditure spent in 2006 (March, 2008).

F igur e 9

Source: http://www.emarketer.com/Reports/Viewer.aspx?R=2000488&page=3


From the above chart (Figure 9) we can infer that, in2008 U.S internet advertising expenditure has increased by $4.8 billion over the preceding year. But when it comes to allotting media budgets for different forms of advertising by the marketers, audiences play a major role. According to ‘eMarketer’ , 29% of their time in a usual week is spent on internet, but surprisingly only 9% ad expenditure goes online (‘eMarketer’ , March 2008).

F igur e 10

Source: http://www.emarketer.com/Reports/Viewer.aspx?R=2000488&page=3


From the above chart (Figure 10) we can conclude that, usage of media is closely associated with the percentage of ad expenditure figures for TV. On the flip side, the percentage of expenditure spent on newspapers surpasses the parallel media time. Call it a depression or a market recession, whatever you call it, US advertising expenditure both online as well as offline will be designed with the help of these supreme economic trends. Nonetheless, while internet advertising costs is in no way insusceptible to the present economic swings, it is more resilient to ad-spending reductions than any other form of media. As stated earlier, costs of different form of ads also vary , according to a survey conducted by ‘PricewaterhouseCoopers’ and sponsored by the ‘Interactive Advertising Bureau’ (IAB), search-based marketing continued to be the leading ad format since 2004.

F igur e 11

Source: http://www.iab.net/media/file/IAB_PWC_2008_6m.pdf


From the above chart (Figure 11) we can infer that, search-based marketing has had a strong successive development between 2004 and 2008. Search-based marketing is followed by ‗Display Banners‘ and ‗Classifieds/Directories‘ in fraction portion of internet advertising. Out of the 5 major advertising format categories portrayed, only two have witnessed relentless losses in percentage share. ‗Sponsorship‘ returns have plunged from 8% of the overall revenues in 2004 to 2% of aggregate revenues in the first half of 2008. On the other hand, ‗Classifieds/Directories‘ returns have fallen from 18% of total in 2004 to 14% in the first six months of 2008. According to Laura Roberts (‘The Telegraph’ , 28 October 2010), the U.K. has the most advanced internet economy in the world with a huge online e-commerce market per person. She reports that, online business is nearly worth £100bn a year with internet marketing income making up to 7.2% of the total GDP (gross domestic product). After the United States, the U.K. has the second largest online advertising market worldwide.

Obj ective 5: Consumer r esponses towar ds onl ine adver ti sing

Many advertisements appear simultaneously with different forms of media such as programs on TV, articles in magazines and so on. As advertising perspective may vary to a greater extent, it is always important to select an applicable context for ad campaigns. On this front, a crucial question should be reflected: What role do consumers‘ responses play in measuring the effectiveness of an ad campaign? Marketers should make it a pivotal point to maintain a constant relation with their target customers, because this could be an effective tool for the online advertising. It is always a huge task for the marketing agencies to choose the right elements that should be stressed and used in an advertisement. According to ‘MarketingSherpa’ , one of the internet‘s most popular marketing websites, have conducted a survey and suggested seven important tactics to boost response rates (Armando Roggio, 2008). This survey reported that (Figure 12),’’ adding picture of a person is worth a 53.2% hike in ad response’’ (Armando Roggio, 2008).

F igur e 12

Source: http://www.practicalecommerce.com/articles/830-Seven-Tactics-to-Boost-Online Banner-ad-Response-Rates

[Accessed July 2 2012]

According to ‘MarketingSherpa’ , "It’s no accident that some charities seeking donations feature pictures of suffering children. Words on a page simply can’t convey emotional messages, such as suffering, joy, or frustration," MarketingSherpa said. "Our brains are hardwired to pick up volumes of information from the subtle nuances in facial expressions. That could be why adding a picture of a person is the single most effective way to communicate brand information’’ (Armando Roggio, 2008).

According to Briggs and Hollis (1997, Vol.37 (2), pp. 38), online media advertising has the power to raise brand awareness, intent to purchase and constructive brand insights. According to a research conducted by ‘Gartner’ , an information technology research and advisory company, online media advertising revenue is gradually declining for many websites and alongside, banner ads response rates are sinking (2001, pp.1). Hence, banner ads are considered to be less effective. The same research concludes that, many websites have click-through rates between 0.3% and 0.5%, i.e. less than five people per thousand viewers click on the ad, which is too low. ‘Morgan Stanley Dean Witter’ , an American multinational financial services provider, investigates the effectiveness of banner ads in the digital marketing era. According to them, ‘’the eyeball is attracted to motion, while the ear is attracted to sound‘‘ (‘Morgan Stanley Dean Witter’ , 2001, pp.3). Rich media has been

proved to be five times more effective than traditional banner ads in increasing the effectiveness of the brand recall rates. As the number of users using the internet with the help of broadband connections is increasing at a rapid rate, more rich media ad campaigns will develop and are expected to garner greater response rates. Different ads on the internet come with a specified price tag depending on their response generation capability. Many investors and publishers vigorously attempt to assess the effective cost of internet advertising. According to ‘AdRelevance’ , the most expensive is the vertical banner which goes with a price tag of $43 (Figure 13) (‘Morgan Stanley Dean Witter’ , 2001, pp.7). This is mainly due to its higher response generation proficiency.

F igur e 13

Source: http://www.morganstanley.com/institutional/techresearch/pdfs/iadc0222.pdf

[Accessed July 10 2012]

In order to reach the potential customers, advertiser should utilize the advantages of a flexible medium like internet to effectively increase the brand awareness. According to Ramaraj Palanisamy and Suzanna A. Wong (2003, Vol.4, Nos. 1&2, pp. 16), there are three important steps that proper planning can do for an advertiser, they are: -

Planning helps to build an expectation for the brand. This helps to increase the response rate as the target consumer views the ad at definite situations.

-

Planning helps to create eagerness in the consumer for the product or service.

-

Also, its helps the consumer to rationalise the keenness of the viewed product or service.

Additionally, viewer might click on the same banner ad for further viewing if the product or service is appealing. Hence it can be concluded that, consumer expectations have a substantial effect on the efficiency of banner ads. Joost Loef explains that, customers face a difficulty in choosing the right brand with many brands having both unique and common features (2002, pp.3). Conversely, customers can manage such a composite situation as they are clear about what they anticipate from a brand or a product. According to Joost Loef, consumer responses rely up on the following key points (2002, pp.11):

-

Customers may utilize the brand knowledge to build expectations.

-

Customer expectations of digital marketing may be grounded on knowledge about particular ads in a certain product category.

Therefore, consumer responses towards online advertising play a major role to comprehend how digital marketing works.

Objective 6: E valu ating th e inf lu ence of adver tising f ormats on br anding

The motive of being in business by any company is to make profits by selling its products or services. However, it becomes a challenging task for the advertisers to expect or decide target consumers‘ demands with utmost accuracy. Hence, it is important to engage in ad campaigns that can effect potential customers‘ decision to purchase its products. This is

where exactly brand management is pertinent. If a company‘s marketing goal is branding, the pivotal reason behind choosing digital marketing is to create responsiveness and distinguishability of the product or service. George S. Yip affirms that, internet makes it stress-free to construct global branding and recognition, specifically for websites with the right subtexts. For instance, according to him, ‘Chinadotcom’ was initially a small-scale company in Hong Kong that managed to gain global recognition by virtue of its name (2000, vol.11 (4), pp. 12). Advertising industry uses different metrics like, branding, image change and acquisitions along with click-through rates to measure the effectiveness of online media advertising, hence branding plays a pivotal role in determining the efficiency of an ad campaign (George Baltas, 2003, Vol.45, Quarter 4, pp.505). According to ‘The Nielsen Company’ , a global advertising and marketing research firm, the number of Americans consuming internet has grown at a rapid pace from 186.7 million to 249.3 million since 2003 (2011, pp.1). Alongside, more and more advertising budgets are finding their way online. For instance, ‘Advertising Outlook’ published by ‘The Cambridge Group’ in 2011 investigates about how online ads impact consumer approaches (‘The Nielsen Company’ , 2011, pp. 4).

F igur e 14

Source: http://www.brandchannel.com/images/papers/531_nielse_wp_brand_building_beyond_clic ks_1011.pdf

[Accessed August 2 2012]

From the above figure (Figure 14) we can infer that, brand promotion campaigns do succeed in moving the indicator for most measured brand effective metrics. Therefore, as the instant responsibility of online media advertising and its branding capability becomes apparent to the advertisers we can expect to see fresh and more innovative ad campaigns take up a larger share of that growing expenditure. Michelle Rutter, head of Pan-European sales and trade marketing at MSN, states that, the results witnessed in the recent years prove that online media advertising can work efficiently for brand branding campaigns. According to him, "It's a great frequency builder. People see the ads much more often when they're online as well as on television." (Fiona Harvey, 2003). On the other hand,

Sally Cole argues that, click-through rates can be lesser for rich media when compared to other forms of online advertising formats where the click-through is the only form of user interaction (2008, pp.1). However, on an average, rich media advertising formats produce a 0.10% click through rate. From figure 15 we can infer that, in-page videos produce better click-through rates than in-page non-video and expanding video formats.

F igur e 15

Source: http://www.combridges.com/wpcontent/uploads/2009/06/doubleclick_creative_insights_on_rich_media.pdf

[Accessed August 12 2012]

Hence, we can conclude that, for higher click-through rates advertisers should consider using innovative videos and larger creative sizes which in turn can affect the brand recall rate. Additionally, according to Dave Chaffey (‘Smart Insights’ , January 10 2011), clickthrough rates usually depend on the placement of the ad along with its size and shape (Figure 16).

F igur e 16

Source: http://www.smartinsights.com/internet-advertising/internet-advertisinganalytics/display-advertising-clickthrough-rates/

[Accessed August 12 2012].

Thus, the performance of the different online advertising formats therefore needs to be administered in order to make the right choice between formats with digital marketing resources still sternly limited. As brand advertisers search for better effectiveness from their online media resources, they will turn increasingly to ad networks (Jeremy Liew, July 14 2010).

RESEARCH DESIGN

The methodology used in this dissertation as illustrated:

F igur e 17

The research project is taken down in two phases wherein:

Phase 1: Consists of thorough analytical and critical review of the literature on advertising in the conventional and virtual marketing environments.

Phase 2: Determines the effectiveness of advertising in influencing the brand power over internet with respect to the pillars of branding in the perspective of both the organization and its customers.

OBJECTIVES OF RESEARCH

The objective of this study is to identify the different ways of measuring the effectiveness of online advertising. It is aimed at online marketing and media buying professionals and, more generally, at all departments involved in digital media.

My study focuses on measuring the performance of display advertising and covers seven key approaches: 

Analysing different types of online advertising,



Defining the aims of online communications strategies,



Efficiency of Media mix,



Economics of online advertising industry,



Consumer Responses towards online advertising,



Evaluating the influence of advertising formats on branding.

For each of these topics, my aim is to analyse market trends based on benchmark studies conducted by market research institutes, advertising agencies and sales agencies.

RESEARCH QUESTIONS



How many hours do you spend online a day?



Do you check internet before purchasing a product?



Which media advertising do you think is most reliable?



Do you think online campaigns generate offline sales?



How often do you purchase a product in physical store after getting exposed to an

online ad? 

What triggers your purchasing intent when you come across an online ad?



Which type of online advertising do you react most often?



What do you think are the benefits of online advertising?



Where do you like to check online ads?



What do you request in search engines when you are seeking information about a

product?

RESEARCH METHODOLOGY

This section highlights the process followed in collecting data and evaluating it.

a)

Type of data used: Both primary data and secondary data will be used.

1)

Primary data: obtained from direct interviews with company people, e-customers,

Web-users, and possible consumers. 2)

Secondary data: obtained from sources like leaflets of cyber companies, Web sites

Magazines, articles and Books etc. derives from a thorough analytical and critical review of the literature on branding from articles and various papers

b)

Method of collection: The survey depends on conducting and collecting primary data

both quantitative and qualitative. Data is sought from advertising companies and ecustomers. It includes questionnaires, and conversations. The framework is determined from the thorough and detailed analysis of various literature reviews on branding.

c)

Tools for data collection: The primary data is collected with the help of questionnaire.

The questionnaire will be designed to obtain necessary information that can help a researcher to fulfil his study. The questionnaire will be administered through direct visit to companies and the target segment.

d)

Sample size: Keeping in mind the economic factors, time and manpower limitations,

totally a sample size of 51 internet users is considered.

e)

Sampling Technique: The sample used is small keeping in view of the nature of the

respondents. So the simple stratified sampling technique has been used in the dissertation.

f)

Assumption: The information from the participants will be treated as the correct

information though the sample size is limited to 51.

TYPE OF RESEARCH

I interviewed several advertisers as well as three media agencies in order to understand their view of the key issues at stake and identify together the best resources for measuring the effectiveness of online advertising. I hope that this study will provide me with useful insights.

Due to the nature of research both primary and secondary data has been used and the details are given in the next subheading.

The research process involves two kinds of methods they are: Descri ptive Study:

This research is the most commonly used and the basic reason for carrying out descriptive research is to identify the cause of something that is happening. For instance, this research could be used in order to find out what age group is buying a particular brand of cola, whether a company‘s market share differs between geographical regions or to discover

how many competitors a company has in their marketplace.

Expl oratory Study:

Exploratory research is a type of research conducted because a problem has not been

clearly defined. Exploratory research helps determine the best research design, data

collection method and selection of subjects. Given its fundamental nature, exploratory research often concludes that a perceived problem does not actually exist.

PROCESSES AND RESOURCES

Process

Assess and compare the performance of different formats (static/rich media/video): -

Which formats are effective for my campaign objectives? (Awareness/site

traffic/image/recognition) -

Which are the most effective in terms of acquisition cost?

Tar get deliver ables

-

Use of the most effective formats in line with marketing objectives and budget

constraints -

Online budget optimisation

Comments

The effectiveness of different formats can be assessed at two stages: -

During the campaign, via indicators;

-

After the campaign, via post-tests among internet users exposed to the campaign.

Reach is another important factor in the choice of format; video format can be limited by advertising slot availability, which in turn limits exposure. The type of product is also a determining criterion when choosing the format. Rich media and video formats have proven to be a good solution for products such as cars, where the visual factor is of great importance, but less effective with the financial or service industries.

FINDINGS

Questionnaire

This Questionnaire is built in order to under to understand the behavioural patterns of the internet users and the performance of online advertising. The information from the respondents has been treated as the correct information though the sample size is limited to 51.

F igur e 18

It is shown (Figure 18) that the majority of the respondents fall in the age group between 21-25 years.

F igur e 19

This question gives the information about the exposure time to online ad campaigns that each person come across a day depending on the number of hours he/ she spend online a day (Figure 19).

F igur e 20

More than a traditional medium internet has evolved as a huge database of information where users can get the ready information about the product which they are willing to purchase (Figure 20).

F igur e 21

Out of several media sources available internet has proved as a best source where a major part of the internet users believe that the most reliable information is available online followed by TV and in-store advertising (Figure 21). One of the major reasons being that is the users can exchange and share their views over the internet.

F igur e 22

Internet has become a platform where the advertisers not only use it to sell their products online indeed it is mostly used to build the brand awareness among the customers. Through this graph (Figure 22) it is understood that the strong online presence will show a positive impact on the sales offline.

F igur e 23

Though a majority of the respondents acted neutral on this question, it is also understood that the internet advertising will take a mind share of the customer and helps in brand recall (Figure 23).

F igur e 24

This is the crucial decision that has to be taken in terms of an advertiser. Depending on the site the ad is placed and the utility of the product the customer perception about the product changes. Majority of the respondents‘ reciprocated saying that ‘Vodafone’ and ‘Airtel’ are the ads which they could recall when asked about an online campaign that they could think while answering this questionnaire. The sole reason behind this is that, ads manage to deliver creativity and content in proportion which made the respondents react this way (Figure 24).

F igur e 25

Though videos leave a better impact to this date, it is observed that the rate is being declined rapidly with the likability towards the static image ads i.e.

jpg or gif images (Figure 25). Static images make the content delivery clear and to the point and in less time as compared to that of video ads. On the other hand due to increase in usage of internet on purpose, the likability towards video ads is declining. People tend to show interest if the video length ranges from 15 seconds to one minute.

F igur e 26

From this graph (Figure 26) it is understood that majority of the internet users believe that there are several advantages of online advertising than the traditional means of advertising in the name of ready information that is available with just a click away and the time spent in understanding the campaign.

F igur e 27

With the increase in the usage of internet it is also becoming very important to place an ad in such a way that it breaks the clutter. With most of the time spent on social networking majority of the respondents opted that they would like to see the ads on social networking sites followed by personal mails and subscriptions which help in increasing the targeting levels as well as the conversion rate (Figure 27).

F igur e 28

To this question majority of the internet users responded saying that they would request for brand key words than that of the key words related to ad campaign (Figure 28). One of the ma jor challenges for advertisers is to ensure

consistency between display advertising campaigns and k eywor ds purchased in search engines and between advertising and cr eat ive content across different media.

F igur e 29

This graph (Figure 29) shows that more or less every internet user is exposed to all kind of advertisements. There is really a huge potential to reach the target customers in several ways, the best of it being the pop up ads. It should be made clear that the ads should be relevant to the site which the respondent browses. A definite target segment should be identified before advertising through these means.

CONCLUSION

REFERENCES

- Aaron Siegel (2006), Importance of Branding in Your Advertising Campaign [online], Available at: http://ezinearticles.com/?Importanceof-Branding-in-Your-Advertising-Campaign&id=313128

[Accessed

January 10 2012].

- Acuity Media Group (2012), Conte xtual Targeting: Why it’s Awesome [online], Available at: http://www.acuityads.com/contextual-targetingwhy-its-awesome/ [Accessed April 5 2012].

- AdJuggler Inc. (2009), Guide to Online Advertising [pdf], Available at: http://www.adjuggler.com/docs/AdJuggler_guidetoonlineadv.pdf [Accessed 15 December 2011].

- Anand Subramanian (2006), Contextual vs. Behavioural targeting [online],

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