Effectiveness of Online Advertisement Factors in Recalling a Product

Article excerpt

INTRODUCTION

The emerging area of interactive advertising presents new challenges for advertisers who have hitherto adopted an interruptive strategy. In contrast to conventional forms of interruptive advertising, the viewer has actually chosen to see the commercial. This new mindset, not surprisingly, holds for the way in which the audience is willing to engage with ads. Online advertising reduces costs, increases efficiency, provides more flexibility and as a global medium, the Internet enables buyers and sellers to interact and manage business transactions. The promotion of online sales and advertising revenue in the US has grown from $8.23 billion in 2000 to $12.5 billion in 2005. According to a survey conducted by the American Advertising Federation, the percentage of media budgets allocated to online advertising represented 14.1% in 2005, a figure that is projected to hit 19.1% by 2006. Perhaps it is its immediate responds that make online advertising one of the fastest growing methods of targeting consumers (Homer, 2005). However, there have been growing concerns about invasion of privacy Aaker & Stayman, 2005) and access to advanced technology.

From the buyer's perspective, the limitations include the inability to touch, smell and taste or try-on tangible goods before making an online purchase. A survey of 410 marketing executives indicated that insufficient ability to measure impact, a lack of internal capability, and difficulty convincing senior management as the top three barriers to entry for large companies looking to market online. However, as Advertisers increase and shift more of their budgets online, it is now overtaking radio in terms of market share (Clark, 2002). The objective of this research was to study the type advertising factors that motivate consumer recall of online advertisements. According to Internet World Stats, as of September 2007, the world's population is estimated to 6,574,666,417, where 1,244,449,601 are using the Internet. In fact, the United States of America had the greatest contribution with regards to the number of Internet users, since 212,080,135 or 70.2% of USA's population had been captured by the power of Internet. Such great population of Internet users had now undoubtly encouraged businesses and entrepreneurs to advertise online (Bruner, 2000; Ducoffe, 2004).

BACKGROUND

Online advertising requires effective strategies in reaching customers Zinkhan & Watson, 2004) These strategies may include personalization and integration of multimedia and real-time interactions. The largest revenue shares within Internet advertising are generated by display-based and search-based advertising. The latter utilizes the Internet user's search engine query to determine which advertisements are displayed. Search-based advertising accounted for approximately $5.1 billion in 2005, 41% percent of total Internet advertising revenue. Google and Yahoo are leaders in the search-based advertising market (Goldberg & Gorn, 2005). Unlike traditional media, online advertising generally through its search engine provides advertisers with access to large affiliate networks as well as opportunities for display-based and search-based advertising (Green, 2001; Chen & Wells, 2005). In addition to keyword-based advertisements, advertisements can be delivered based on geographical data contained in a consumer's IP address. For example, a user with an IP address originating from Baltimore might receive an offer to purchase Baltimore Ravens tickets while visiting a football-related website. Visiting the same website at the same time, a user from Philadelphia might instead receive an ad for Philadelphia Eagle tickets (Toon, 2004)

Unlike traditional media, online advertising provides real-time information of an advertisement's efficacy using the clickthrough rate (CTR) metric. There are several reasons for low CRTs including lost of interest of potential customers and "invalid clicks'. …