Impact Of Internet Advertising On Consumers’ Purchase Decision

Project and Seminar Material for Business Administration and Management BAM

Project and Seminar Material for Business Administration and Management BAM


Abstract


The use of online advertisement in Nigerian market is increasing and businesses are more and more considering the internet as a source of marketing communication. However, few studies have considered the factors that influence online buyer’s decision when Nigeria is considered. Thus, the main objective of this study was to examine the factors that contribute to the effectiveness of online advertisements and how they affect consumers’ buying decision. JUMIA online shopping company was selected as the study organization. The targeted population was the entire students of University of Lagos, Akoka campus who must have at any time visited JUMIA online shopping platforms to make purchase. The method of carrying out the study was based on survey design. A total number of 200 undergraduate students were randomly selected from stratified groups within the University as sample size for the study. The survey questionnaire was used to collect primary data from respondents. The data collected was analyzed based on simple percentages and frequencies. The Chi-square technique was used to test the proposed test the proposed hypotheses. It was recommended that Web advertisers should try to provide adequate and relevant information content so that consumers consider web ads when making purchase decisions. In addition, government should make internet cost affordable to enhance customer accessibility, and issues of internet fraud should be handle appropriately.


Chapter One


Introduction

1.1 Background to the Study

Advertising has been in existence for many decades. It is one means of promotional mix which has its ultimate function to inform, persuade and promote ideas in order to sell goods and services (Akinkugbe 2006; Kotler, 2009). Advertising, over the years, has grown to become a prominent form of marketing communication, and as a marketing communication tool, it utilizes various forms of mass media to get sales messages across to a large number of people. The traditional mass media for advertising include TV, broadcasting, magazines and newspapers (Belch & Belch, 1998). However, with the increasing development in information technology, the Internet in addition has become another interesting advertising media commonly used nowadays by advertisers and markets to communicate messages to consumers (Ashraf and Mohammed, 2012).Internet has grown tremendously in both its applications and number of users due to its unique characteristics of flexibility, interactivity, and personalization. It has been a very useful tool for communication, entertainment, education, and electronic trade (Ko et al., 2004; Koyuncu and Lien, 2003). The revolutionary change brought forth by information technology has an important impact on the daily lives. It has transformed the way we do business by allowing retailers to offer unlimited range of products and services to all consumers from around the world at any point in time. The Internet has emerged as an advertising medium (Silk et al., 2001). Many companies have turned to the Internet to advertise their products and services; and the Internet is deemed to be the most significant direct marketing channel for the global marketplace (Faber et al., 2004; Ko et al., 2004; Korgaonkar and Wolin, 2002). Companies are pouring billions of dollars into Internet advertising to obtain greater return on investment on ads (Edwards, 2005; Joines et al., 2003). The Internet has existed since the late 1960s when a limited number of computers were connected in the United States from the Advanced Research Project Agency. (ARPA)This was used mainly to enable academics and military personnel to exchange defense information (Chaffey, et al., 2000:10). Until the advent of the World Wide Web in 1990, the Internet was almost entirely unknown outside universities and corporate research departments and was accessible mostly via command line interface such as Telnet and File Transfer Protocol (FTP) (Anonymous, 2004:2). Griffiths (2002:2) indicates that the recent dramatic growth in the use of the Internet has occurred because of the development of the World Wide Web. The World Wide Web changed the Internet from a difficult-to-use tool for academics and technicians to an easy-to-use tool for finding information for businesses and consumers. Since then the Internet has grown to become an almost ubiquitous aspect of modern information systems, becoming highly commercial and a widely accepted medium for all sorts of customer relations such as advertising, online sales and services (Anonymous, 2005:2).The Internet can be considered as an interlinked publishing medium for displaying graphic and text information. This information is stored on server computers and then accessed by users who run web browser programs such as Microsoft Internet Explorer and Netscape Navigator, which display the information and allow users to select links to access other web sites (the process known as „surfing‟) (Tang, 2004:2).

The Internet has given consumers more control in accessing information on products and services. There are several factors that contribute to consumers pull for online content consumers are the one who decide when, where, what, and how much commercial content they wish to view (Korgaonkar and Wolin, 2002). The Internet enables consumers to access an unlimited range of products and services from companies around the world, and it has reduced the time and effort they spend on shopping (Ko et al., 2004). Consumers play a much more active role in searching for information online with some goal in mind, and that goal can influence individual behaviors and responses to online information and advertisements (Smith, 2002). With the rapid advancement in the computer industry, many companies have made the Internet as part of their advertising media mix to take advantage of the online technologies (Cali sir, 2003). The Internet has become a popular advertising platform because marketers found that the Internet possess greater flexibility and control over the advertising materials (Ducoffe, 1996). Since the Internet can be used as an efficient marketing communication tool, both scholars and practitioners are interested in understanding how to take full advantage and maximizing the value of this communication medium (Rodgers and Thorson, 2000). A set of ideas that made sense a century ago shaped the modern perspective on shopping. Some of these old-fashioned ideas are people shop for dollar value, which shopping decisions make practical sense or that shopping is mostly about acquiring needed goods and services. The new mode of thought in the shopping environment is no longer sufficient to identify simple customer demand and try to satisfy them. Modern shoppers buy things to reward themselves, to satisfy psychological needs or to make themselves feel good. Modern shoppers buy things because they are expensive. They buy things to make a statement, to show off their personality or to boost their self-esteem. Purchased item have become an affirmation of the psyche. Retailers need to change in order to suit the modern shopping behaviour. It is no longer sufficed to see a shopper as a rational creature making decisions. It is no longer enough to think that the shopper acts in a way that makes sense from an economic of logical point of view (Pooler, 2003). Shopping itself is a form of self-expression. People define themselves through their shopping. How they shop, where they shop and what they buy serves the purposes of letting people express their desires, their needs and personalities. Shopping gives people a sense of accomplishment. For many, it gives life a sense, a purpose, value and a function. The successful shopper feels a sensation of satisfaction, execution and fulfillment. Shopping for emotional and psychological reasons has become the new mantra of modern society.

Digital Advertising

Digital advertising is a form of promotion that uses the internet for the expressed purpose of delivering marketing messages to attract customers (Kim, Park, et al., 2012). According to Miller (2012) digital advertising has various kinds with various technologies. Digital advertising can contain video, animation and audio and is at least as compelling as television ads. Today as consumers use digital tools and networks morthan before, digital advertising is the most suitable way to reach and effect them. Digital advertising has distinguishing features and advantages: (Gao, Sheng et all, 2013). Digital advertisements provide dual communication between advertisers and users that makes these advertisements more effective. Digital advertising supplies a direct connection to products. To promote both static and dynamic advertisement choice, represent and display, digital advertisers can use to customer targeting methods. The other distinctive feature of digital advertisements is related to globally accessible and available in 24/7/365. Digital advertisements can be easily transmitted, exhibited, preserved and modernized because of their online nature. Digital advertisements are extremely monitorable and evaluable.

Internet advertising, (also known as online advertising) is the delivery of advertising messages and marketing communications through websites. It can be delivered through various electronic platforms including mobile phones, iPods, desktop computers, and laptops etc. As a marketing communication tools (Esiri, Kolade, Oloyede,  and Ogungbamigbe, 2014) internet advertising takes a multitude of forms, ranging from Search advertising to Banner and Rich Media Adverts (i.e. ads that incorporate sound, animation and interactive digital video commercials). Regardless of the particular format, displaying advertising content to online users is driven by two major objectives: (a) build new or reinforce existing brands, and (b) stimulate purchases. For that reason, the success (or effectiveness) of internet advertising has been traditionally measured by the number of clicks attracted by the adverts, or the ratio of the number of clicks over the number of impressions. In addition, many advertising experts argue that the mere exposure of online users to the advertising message can be beneficial in terms of building brand awareness (Flores, 2000) and increasing purchase intentions (Hollis, 2005). However, various factors may influence the rate of clicks attracted by online adverts, and it is the burden of this study to examine these factors in Nigerian context and to also find out how they influence purchase attitude and decision of consumers.


1.2 Statement of the Problem

Internet advertising is the delivery of advertising messages and marketing communications through the Websites. It has presented sustainable revenue growth since its inception in the mid-1990s. Internet advertising takes a multitude of forms, ranging from the “traditional” banners to today’s rich media ads. Due to its wide success, internet advertising currently constitutes a significant marketing channel for a large number of firms, ranging from news agencies to car manufacturers and retailers, and it is thus gradually gaining attention in the context of communications strategy, planning and implementation.

However, due probably to its infancy in Nigerian media market, there has been relatively little knowledge and empirical research on the factors that affect the success of online advertising in Nigeria. Consequently, when relying on insufficient knowledge to make decisions about their internet marketing strategy, companies run the risk of missing marketing opportunities, lost patronages, decline profits, and damaging image. To this end, this study attempt to make a number of contributions to the body of actionable knowledge pertaining to the factors that may influence success of online advertising campaigns using KJMIA online marketing company as a case study.


1.3 Objective of the Study

This study was conducted with the following objectives:

  1. To assess the effect of internet advertising on consumers purchase decision.
  2. To examine the influence of background characteristics of online users on internet advertising success.
  3. To assess the effect of online products advertisement on internet users.
  4. To assess the effect of online adverts on consumers’ decision purchase for products.

1.4 Research Hypotheses

Hypotheses One
  • Ho: There will be significant effect of demographic, advertisement; website and product characteristics on consumer buying decision.
  • Hi: There will be no significant effect of demographic, advertisement; website and product characteristics on consumer buying decision.
Hypotheses Two
  • Ho: There will be significant influence of sex, age , marital status, education and occupation of internet users on internet advertising success.
  • Hi: There will be no significant influence of sex, age, marital status, education and occupation of internet users on internet advertising success.

1.5 Significance of the Study

Essentially this study will benefit business organizations and corporate bodies in the e- retail shopping industry as it will elaborate on the factors that may enhance/impede success of online advert. Findings will also enable online shop owners to be aware of those features and product elements that consumers considers very important in their purchasing intention and shopping experience. By extension, this would enable the manufacturers to improve on their products. It is hoped that through the completion of this investigation, a body of knowledge is added to the marketing communication and promotion area of advertising.


1.6 Scope and Limitation of the Study

This research is to examine the effects of internet advertising on the consumer buying decision. Investigation was limited to the vicinity of University of Lagos, using all categories of students who are mostly the users of internet facilities either for information, education, social interaction or shopping purposes. The focus of study was however restricted to various online platforms used by JUMIA online shopping mall. It concentrate on finding out if online advertising affords the students the opportunity of getting to know and continuously patronize products advertised by JUMIA electronic shopping websites.

The researcher encountered some constraints, which limited the scope of the study. These constraints include but are not limited to the following.

a) Availability of Research Material:

The research material available to the researcher is insufficient, thereby limiting the study

b) Time:

The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.


1.7 Definition of Terms

The following terms were described according to their usage in the study

Advertising:

This is a form of communication used to help sell products and services. It is sometimes use to persuade consumers to switch from some popular brand to less known brands.

Advertisement:

Communication in the media paid for by identifiable sponsor(s) and directed at a target audience with the aim of impacting information about a product, services, idea or opinion.

Advertiser:

A person or organization who pays for the placement of an advert.

Internet Advertising:

Internet advertising is the delivery of advertising messages and marketing communications through the company Websites


1.8 Organization of the Study

This research work is organized in five chapters, for easy understanding, as follows

  • Chapter one is concerned with the introduction, which consist of the (overview, of the study), historical background, statement of problem, objectives of the study, research hypotheses, significance of the study, scope and limitation of the study, definition of terms and historical background of the study.
  • Chapter two highlights the theoretical framework on which the study is based, thus the review of related literature.
  • Chapter three deals on the research design and methodology adopted in the study.
  • Chapter four concentrate on the data collection and analysis and presentation of finding.
  • Chapter five gives summary, conclusion, and recommendations made of the study

Chapter Five


Summary, Conclusion and Recommendation

5.1 Introduction

It is important to reiterate that the objective of this study was the impact of internet advertising on consumers’ purchase actions.

In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits on the impact of internet advertising on consumers’ purchase actions.


5.2 Summary

This study was undertaken to examine the impact of internet advertising on consumers’ purchase actions. The study opened with chapter one where the statement of the problem was clearly defined. The study objectives and research hypotheses were defined and formulated respectively. The study reviewed related and relevant literatures. The chapter two gave the conceptual framework, empirical and theoretical studies. The third chapter described the methodology employed by the researcher in collecting both the primary and the secondary data. The research method employed here is the descriptive survey method. The study analyzed and presented the data collected in tables and the hypotheses were tested using the Chi square while the fifth chapter gives the study summary and conclusion.


5.3 Conclusion and Recommendations

The impact of internet advertising on consumers’ purchase actions is a topic with high priority. From our study we recommended that Web advertisers should try to provide adequate and relevant information content so that consumers consider web ads when making purchase decisions. In addition, government should make internet cost affordable to enhance customer


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