a study of impact of online advertisements on (1)

8/3/2019 A Study of Impact of Online Advertisements on (1)

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A STUDY OF IMPACT OF ONLINE

ADVERTISEMENTS ON CONSUMER:

A SECTOR-WISE ANALYSIS

Ankur Mahajan74/2010


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Flow of the presentation

Introduction

Literature review

Surveys

Advantages of online advertising

Benefits of online advertising

Factors influencing growth

Types of online advertising

Objectives

Research Methodology

Questionnaire Design

Data Analysis

Recommendations

Conclusion


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Introduction

Advertising was first established and developed in printformat in the form of banners, cut-outs, brochures,newspapers etc. Radio followed the trend along withTelevision. Internet gained its impetus in India in the mid 90'sand since then, efforts were made to propagate andestablish the advertising root in the World Wide Web.

Online advertising budgets have been climbing in recenttimes, but they are still a small percentage of the overallbudget. The Internet holds great promise as an advertisingmedium.

Majority ofIndian consumers today, are young. It makessense for brands, therefore, to use youth-centric medium forreaching out to them.


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Recognizing that banneradvertising can have animpact on branding, it would

be helpful for those designingonline advertising tounderstand thecharacteristics of an online adthat are related to its successon brand-orientation.

Where theres a need to makea greater foothold withawareness and messaging, acampaign should focus on theupper funnel. Where theres

an opportunity to winfavorability and purchase, acampaign should focus on thelower funnel.


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Growing Internet user base, increasing time spent on theInternet, broadband penetration into households and

fragmented media consumption habits of consumers aredriving advertisers towards the online medium.

The various sectors that have been analyzed in the research

are: Automobiles, Laptops/ Consumer Electronics, Apparel,Cellphones, Blogs, home furnishings/dcor, FMCG,Healthcare and Financial Services. These have been linkedto the various portals available for advertising online:Facebook, Orkut, Twitter, Linkedin,Google Search,

Youtube, etc.

Since online advertising in India is not very successful as ofnow, the consumer behavior in this category might be verydifferent than the one for the popular media of advertisinglike the print or television.


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Literature Review Advertising Frequency (BroussardG.)

Advertising frequency directly impacts direct response (click onthe ad) and brand awareness. Low frequency of ad has lowerresponse

Viewing Mode, Duration and Context (Danaher P., Mullarkey G.)Online users tend to have higher recall and recognition whenthey are surfing rather than getting something accomplished.Longer the time a user spends on a website, higher the recall andrecognition.

Interactivity on a Website (Wang C., Zhang P., Choi R., D'EreditaM.,) Unlike traditional medium, a consumer's attitude to an adand the context can be different. Higher interactivity on awebsite may result in better brand building, even though the aditself may not result in direct response.


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McKinsey survey

Web is increasingly being used for advertising,product development and customer service.

65% of respondents in the technology industry feelthat online marketing is important.

One-third of companies that advertise online spend

10% of their advertising budget on online media.

Search engine advertisements rank highest in termsof perceived effectiveness.


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IMRB research

The total Online Advertising market ofIndia is estimated at Rs.785 crores for the year FY 2009-10 and is expected to grow to Rs.993 crores in year FY 2010-11

Online Display advertisements contributed Rs. 417 crores (Rs4170 million) Display Advertising continues to surge, registering agrowth of 22% over previous years figure of 325 crores. In FY2009-10 Display Advertising was estimated to be Rs. 235 crores,registering growth of 77% in two years.

The display ad market (banner advertising) is expected to growby 28% while Text is expected to grow by 26% in FY 2011. In year2009-10, Display ad industry is estimated to be Rs. 417 crores andText ads is Rs. 368 crores; Travel, BFSI, auto & Telecom continue toremain biggest display ad spenders in year 2009-10 and will remainso for year 2010-11 as well.


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I cube research : A customer

perspective 89% of all regular online Indians shop online (search or buy).

20% have also bought online in last 1 year, i.e., active onlinebuyers base of 7.6 million.

65% of online buyers have bought a travel product online and50% have bought a non-travel product online.

74% of travel buyers have bought train tickets, 34% air tickets.

Credit card is the most popular mode of online payment at 50%.

Less than 1 in 5 non-buying online shoppers cite fear of misuseof credit cards as a reason for not buying online.


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Advantages of online

advertisements Cheaper than traditional offline

advertisement in term of cost and time.

Can be carried out in an attractive manner.

More appealing through use of graphics andvisual aids.

Customized message for different audience.

Changes can be easily implemented. High reach and convenience.

Brand recognition and exposure.


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Benefits of Online

Advertisements

Core Benefits

Augmented Benefits

Peripheral Benefits


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Factors influencing growth

Domestic Internet User Base Large online user base Increasing penetration to significantly widen user base

Positive Consumption Patterns More access and consumption of online medium Higher speed ofInternet connections

More frequency and longer duration Increase in response to online advertising

Literacy & Language Barrier


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Types of Internet Advertising

E-mail Advertising Target Advertising

Behavioral Advertising Affiliate Marketing Pop-ups Social Media

Wallpaper Ad Video Ad Floating Ad Trick Banner


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Objectives

To study the effect of Online Advertisements on theattitude and opinion of the consumer and consumersdecision making.

To identify the impact of online ads in various sectors andanalyze its effectives on the consumer behavior.

To see which portals are the most effective for whichindustry.

To gauge the effect of gender and working status ofinternet users on their clicking and purchasing behavior.


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Research Methodology

The research methodology comprises of twoparts-

Primary research related to consumers: To findout the perception of internet users in Indiaabout online advertising and how responsivethey are to the same.

Secondary Research: To get a good overview ofthe background and history of this industry andany other information that may be required.


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QUESTIONNAIRE DESIGN

The questionnaire was designed for the targetaudience that is the internet users. The samplesize was 160 out of which around 100 were

students and the rest belonged to the workingclass. This was to get a good understanding ofthe perceptions of all demographic groups.

The location was Delhi/NCR and so the findingsmight be applicable only to advertisers trying totarget the metropolitans.

Questionnaire


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Data Analysis


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Likeliness of an ad (percentage) of that particular industryon a portal


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Facebook is suitable for advertisements aspeople tend to spend relatively more time onthese websites

Ads for industries like Fashion, Food and

Beverages, Electronics and Automobiles aremore visible to the consumers

For industries like Finance, Home dcor,

Healthcare, and Electronics the Google Searchstands out as the most preferable portal becauseit provides the consumer with vast and reliableinformation


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Probability of a click on different portals


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Likelihood(in terms of percentage) of a click and subsequentpurchase from a particular industry on a particular forum


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10.75%* is the likelihood of a person making apurchase from a retail sector from a forum like

Facebook.

Google Search as a portal where people feelthey can make online purchases emerges

Industry like Food and Beverages, Entertainmentand Retail people tend to rely on theGoogleSearch

The next most popular portals are the contentnetworks i.e. the various other sites (movies,music, gaming, news)


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Association between the rate of clicking

and purchase of online consumers

Ideally, the rate of clicking should have been positively correlated to the

rate of online purchases

Though Indian consumers have started indulging in online purchases, it isnot generally through clicking of online advertisements


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Effect of Gender on clicks and Purchases


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Effect of working status on clicks and

purchase behavior


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Effect of gender on the various

industries purchase

Gender does not show any association withthe online purchasing behavior withindifferent industries as well

Though obviously there is a difference in themeans due to the nature of the industries for

e.g.- electronic and healthcare items arepurchased more by men than women, thereare no major differences in the buyingbehavior otherwise


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Most popular choice of Industry

Industry Number of votes

Fashion 105

Food and Beverages 119

Retail 79

Movies/Music/Games 82

Electronics 45

Healthcare 38

Finance 124


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Most popular choice of portal

Portal Number of votes

Search Engine 107

Educational Websites 41

Social Networking Sites 123

Gaming and Music Sites 38

Blogs 41


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RECOMMENDATIONS

The probability of an ad being noticed decreases with increasingnumber of hours spent online.

Expert Internet users develop the ability to consciously avoid ads

Banner ads yielded higher recall compared to text-based ads

Pop-up ads had a negative impact on the target audience. Mostconsumers get irritated with pop-up ads.

Ads that had a longer presence on a website it results in higherbrand recall


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Conclusion

Search quality and experiential quality are useful concepts to leveragefor achieving synergy between offline and online methods.

Online display advertising industry in India needs to develop globally

accepted performance measures that also cut across various other mediavehicles like television, print and radio.

With the distinct advantage of online in terms of the number of hoursspent online, immersive experience that online can offer and the

contextual delivery of messages, online advertising is bound to emerge awinner.


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Thank you

a study of impact of online advertisements on (1)

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