Abstract

Web is considered to be different from most traditional mediums because it has multimedia characteristics. Businesses see the Web as an opportunity to channel their advertising. Advertising effectiveness is important to the marketers to know if their advertisements have reached their target audience effectively. This research focuses on the impact of online consumer characteristics on banner ad effectiveness. The characteristic variables included in this study are: online consumer's internal flexibility, consumer expectations, consumer involvement, and perceived personal usefulness. A survey of 158 online consumers was then conducted to gather study data. The study results validate the relationship between online consumer characteristics on banner ad effectiveness. However, the study data does not support the impact of focus and planning approach for online shopping on ad effectiveness.

Keywords : banner ad effectiveness, consumer expectations, consumer involvement, online consumer's internal flexibility, perceived personal usefulness

Introduction

World Wide Web, also known as "the Web" is considered to be different from most traditional mediums because it has multimedia characteristics. The Web can be defined as 'user-friendly graphics-capable component of the Internet' (Pugsley and Trites, 2003) and as a cross between an electronic trade show and a community flea market (Berthan et al. 1996). Web is flexible, open, informal, interactive, and converts visitors into customers. The Web has been used to disperse information to many consumers and more and more businesses are trying to incorporate the Web to their operations (Alba et al. 1997). Businesses have realized the potential benefits of the Web in direct sales, building brand awareness and providing market information for consumers. Businesses see the Web as an opportunity to channel their advertising, marketing and distribution of some of their products (Verity and Hof, 1994). In Web-based channels, the businesses can cut advertising cost by one quarter of any conventional channels, such as television, radio and magazines.

In order to reach the targeted consumers, organizations need a flexible medium. The Web would be a more viable channel for today's changing, expanding and global organizations. The marketplace is changing and it has been shifting towards on-line shopping, and virtual market businesses. Due to the change in trend of the environment, the on-line businesses have to focus more on web-based advertisements. The marketers like to draw the online-consumer's attention among thousands of other products or brands. By the end of 2003, Internet advertising spending in the United States alone could grow to more than 13 billion (Internet Advertising Bureau 1999; Krishnamurthy 2000).

The Web is flexible in that it can present information in numerous ways including text, images, video, and sound. The multimedia aspect could make the experience more fun and stimulating, thus holding the attention of the consumer longer (Ghose and Dou 1998). The Web has been able to reach more people. In the Web channel, any online consumer can view the ad any time (24-7), and at any location. The Web is widely recognized and accessible in most parts of the world. The Web can support information in different languages and currencies. Consumers have control of exposure to advertisements on when and where they would like to see them (Gallagher et al., 2001). The consumers can close out advertisements they do not want to see or go back to the advertisements they are interested in. This will give consumers numerous opportunities to view the advertisement. It has been said that after a number of exposures to advertisements, the consumer will retain the information more (Vakratas and Ambler 1999). So, Web-based advertisements let the consumers have control over what advertisements are to be viewed and for how long. Also, consumers can arrange advertisements to their liking and to their preferred scheduling.

Web-based Banner Ad Effectiveness

Advertising effectiveness is a large part of any marketing campaign the marketers need to know if their advertisements have affected their target audience. If the campaign can actually reach the targeted audience then the benefits would be immense. As advertising effectiveness is a primary concern for most business, trying to explain consumer characteristics in relation with ad effectiveness would be beneficial. Online advertising industry and its clients become increasingly concerned about the effectiveness of banner ads (Cross, 1999). Many businesses spend millions of dollars to target their market audience but the impact of their efforts is to be known to the management to assess their strategies.

This research focuses on the impact of online consumer characteristics on banner ad effectiveness. Banner ads are commonly placed on high-traffic websites (Dou et al., 2001) and transfer the viewer directly to the company's website for further information (English and Pearce, 1999). Banner ads appear when viewing web pages, usually placed at the top or along the sides of the Web page (Edwards et al. 2002) or a search engine's page (Sipe, 2003). Normally, the banner advertising flashes across the screen, presumably while the viewer is engaged in reading the page content (Nordhielm, 2002). Since they are generally displayed on the periphery, they do not interrupt the main activity of Web viewers. The viewer do not need to do anything to avoid the banner ads. If viewer is interested in the ad, he or she can click on the ad to obtain more information. If not, the viewer can simply ignore the ad without doing anything extra. Thereby, web surfers control their experience on the basis of their preferences (Liu and Shrum, 2002).

Why Banner Ads?

Banner ads are used as a major online advertising tool (Internet Advertising Bureau, 2000) and represent a significant portion of search engine revenues (Katz, 2000). Banner ads are the most suitable format to use because most Web users would have encountered some banner ads in their day-to-day usage. Banner ads are chosen because viewers cannot close out the ads like pop-up ads. The banner ads are embedded in the website and so it cannot be closed. Some of the banner ads are able to move with the page when it is scrolled. This might be more affective to the consumers if the ads are available at all times. Moreover, web advertisers must make decisions about the effectiveness of their banner ads (Bhat et al., 2002).

Online Consumer Characteristics

Online consumer interaction with product information is one of the critical components in B2C e-commerce environment (Bayan, 2001). In designing the banner ad, online consumer characteristics play an important role in such e-commerce environment. The research proposes online consumer characteristics influence banner ad effectiveness. The characteristics were considered in pre-experience, and experience phases of viewing a banner-ad. Though the consumer had no association with an advertisement, the consumer may have some predictions towards it. So, in pre-experience phase, the consumer's internal flexibility and expectations from the banner ad were considered. In the viewing (experiencing) phase of the advertisement, consumer involvement and perceived personal usefulness were considered.

Literature Review

Banner Advertisement !Effectiveness

Basically, advertisements communicate messages and serve two functions: to inform and to persuade (Singh and Dalai, 1999). To inform is to create awareness about the product/ service and to persuade is to generate a positive attitude and behavior toward the product/service. The advertising effectiveness would be associated with the post-experience of processing any advertisement and represents the increased value to the customers (Ducoffe, 1996). Advertising effectiveness is usually described as being a 'hierarchy of effects' (Vakratas and Ambler 1999). The 'effect' mentioned is to change the consumer's mind about a product by changing their attitudes and then by acting it out (Hall 2002). The information in the advertisements could change people's perceptions and will eventually change their behavior.