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“The impact of Internet Advertising on Consumer Buying behavior towards Mobile phones” Bachelor of Management Studies (BMS) Semester V Submitted In Partial Fulfillment of the requirements For the Award of Degree of Bachelor of Management Studies By (Rahul Milind Yadav) (Seat number: _______________)
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The impact of online advertising on consumer buying behaviour towards mobile phones

Mar 21, 2017

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Page 1: The impact of online advertising on consumer buying behaviour towards mobile phones

“The impact of Internet Advertising on Consumer Buying behavior towards Mobile phones”

Bachelor of Management Studies (BMS)

Semester V

Submitted

In Partial Fulfillment of the requirements

For the Award of Degree of

Bachelor of Management Studies

By

(Rahul Milind Yadav)

(Seat number: _______________)

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Table of contents

Sr no. Topic Page no.

1. Abstract 52. Chapter 1 6

1.1 introduction1.2 the concept of Online advertising1.3 the origin of online advertisement1.4 TYPES OF ONLINE ADVERTISEMENT

1.5 UNDERSTANDING THE CONCEPT OF CONSUMER BUYING BEHAVIOUR

1.6 STUDY OF GROWTH OF MOBILE PHONE USERS1.7 INDIA’S SHARE IN GLOBAL MOBILE PHONE MARKET

3. CHAPTER 2OBJECTIVE AND SCOPE OF RESEARCH

17

4. CHAPTER 3 LITERATURE REVIEW

20

3.1 INTRODUCTION3.2 THEORETICAL FOUNDATION OF THE STUDY

3.3 INTERNET ADVERTISING3.4 INTEGRATED MARKETING COMMUNICATION

5. CHAPTER 4RESEARCH METHODOLOGY

25

4.1 RESEARCH DESIGN4.2 DATA COLLECTION

4.3 VALIDITY AND RELIABILITY4.4 DATA ANALYSIS

6. CHAPTER 5DATA ANALYSIS AND INTERPRETATION

28

7. CHAPTER 6SWOT ANALYSIS

41

8. CHAPTER 7 CHALLENGES FACED BY ONLINE ADVERTISING INDUSTRY IN INDIA.

44

9. CHAPTER 8 SUMMARY, CONCLUSION AND RECOMMENDATION 4710. ANNEXURE(QUESTIONNAIRE) 5011. BIBLIOGRAPHY 51

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Abstract

Advertisers are expected to shift and spend millions in internet advertising in the

coming years than TV, print ads and another traditional advertising media. With the

rapid growth in technology, the internet is becoming an important one stop point for

consumers in finding most of their needs. Be it communication, entertainment,

shopping, information search, internet serves as a panacea for all their requirements.

Many consumers are online every day for their personal work, but do they notice the

ads, banners displayed on that webpage, and most important their recall value. The

current study investigated the impact of internet advertising on consumer buying

behaviour by conducting a survey.

The study sought to determine the effectiveness of internet advertising on reach and creation of

awareness; to establish the reliability of internet advertising through recall; and to

determine the relationship between internet advertising and purchase decision. The

study used a case study research design. The study used stratified sampling technique to select

100 study respondents. The primary data was collected using questionnaires. Content analysis

was used to analyse qualitative data. The data was presented through

percentages, means, standard deviations and frequencies. The study found that

internet advertising was effective on reach and creation of awareness due too diverse

usage, and established that its reliability as an advertising media was low compared to

TV. Internet advertising has significant relationship with purchase decision of the

consumers and therefore is a key determinant in influencing consumer behaviour.

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Chapter One

Introduction

Advertising function is the pivot around which all other functions rotate. Goods and services

are not produced for their owner’s sake, but for the satisfaction of the consumer need. As it is

always said that business does not exist in a vacuums it must interact with certain factors, so is

advertising.

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. 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. Companies are pouring billions of dollars into Internet

advertising to obtain greater return on investment on ads. 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. 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.

It has become a major source of information consumption, and to some extent, has

replaced old media such as the radio, television and the newspaper. The main advantages of the

Internet include its mass availability and its almost instant access to current information. As a

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result of the public's reaction to these advantages, Madison Avenue realized the potential of the

new media and soon incorporated it to its budget. Convinced by the initial web publications of the

early '90s, companies soon instilled momentum in the new channel. Today, more than 700 million

people use the Internet daily, mostly so in developed countries (USA, China, Japan, Germany and

Britain, e.g). The most popular uses of the Internet are searching through data and information,

and the purchasing of products and services. In light of these, it is understandable why many

companies advertise their products and services online. In addition, advertisers can quickly benefit

from changing advertising scripts, from the possibility of better segmenting their market, and from

relatively low costs.

Consumers play a much more active role in searching for information online with some goal

in mind, and that goal can influence individual behaviours 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. The Internet has become a popular advertising platform because marketers

found that the Internet possess greater flexibility and control over the advertising materials. Since

the Internet can be used as an efficient marketing 2 communication tool, both scholars and

practitioners are interested in understanding how to take full advantage and maximizing the value

of this communication medium

Encyclopaedia Britannica (1999) gives the following definition of advertising as: “Advertising is the

techniques and practices used to bring products, services, opinions or causes of notice for the

purpose of persuading the public respond in a certain way toward what is advertised”. Advertising

is an essential part of our life and the important source of income for the media. Many people say

they don’t like TV commercials in the middle of the favourite movie, advertising on a radio,

billboards and so on. According to Benson-Eluwa, (2005) “Advertising is a form of non-personal

method of communicating information which is usually paid for by sponsor through various media”.

These definitions can tell one that advertising is a persuasive communication, because it tries to

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persuade the reader, viewers or listeners to take to the sponsors’ point of view and also to take

some appropriate actions towards something.

The essence of being in business by any business outfits is to produce the sales and make

profits. In order to remain in business, an organization must generate enough sales from its

products to cover operating costs and post reasonable profits. For many organizations, sales

estimate is the starting point in budgeting or profit planning. It is so because it must be

determined. In most cases, before production units could be arrived at, it will turn to

material purchases.

The economists believe that advertising is persuasive because they agree that advertising

is not interested much in fulfilling that desire of consumers, people taste are changed so that they

will buy what has been manufactured.

The criticism in reality is a negation of the concept of consumer sovereignty, which claims

that the free market generates the flow of production along the lines that satisfies consumer taste.

Here, taste determines what shall be produced; producer sovereignty governs the consumer

versus producer sovereignty in the market place.

For us to fully know the meaning of advertising we should also know the various ways

advertising can be performed and some of these ways are:

- Through media, which can be broadcast media (television and radio) or print media

(newspaper, magazine or pamphlets) these are means or channels where information on

the product can be disseminated to a scattered audience usually at the same time and

successfully. It requires a lot of research before it can be done properly.

- It can also be done through displays of the product on a moving vehicle, shops or buildings.

It is usually done in a catching way in order to catch the attention of the people.

- Another is through billboards which are a large signpost or boards placed on busy

roadsides, creating the awareness of the existing product to all the people passing by.

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- Traditionally, these are ways to advertise a product with the use of hawking,

town crying and calls to the village members with any significant symbol

depending on the culture of that place.

1.2The Concept of Online Advertisement:Internet advertising is a form of promotion that uses the Internet and World Wide Web for

the expressed purpose of delivering marketing messages to attract customers. Examples of

online advertising includes contextual ads on search engine results pages, banner ads, Rich

Media Ads, Social network advertising, online classified advertising, advertising networks and e-mail marketing, including e-mail spam.

Online video directories for brands are a good example of interactive advertising. These

directories complement television advertising and allow the viewer to view the commercials

of a number of brands.

If the advertiser has opted for a response feature, the viewer may then choose to visit the

brand’s website, or interact with the advertiser through other touch points such as email,

chat or phone. Response to brand communication is instantaneous, and conversion to

business is very high.

This is because in contrast to conventional forms of interruptive advertising, the viewer has

actually chosen to see the commercial. 4 Consumer can gather information about products

and services, communicate with other consumers and firms for related products and

services, and sometimes complete transactions. As the Internet session is a self-selected

environment of the consumer, the promotion message will be more effective. Internet

advertising is also capable of providing an experiential environment to the consumer

through virtual reality interfaces thus allowing the consumer to experience some of the

features of products before making the purchase decision. Consumer can provide feedback

content about the product, to the firm and to other consumers. A positive feedback

becomes a good promotion for the marketer. A marketer can even exploit a negative

feedback by solving the consumer’s problem and showing the commitment of the

organization to satisfying consumer needs. Consumer can also add “collective content” to

the medium through discussion forums like the virtual communities. In

India, online advertising has gained increased popularity with more people spending time online.

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1.3 The Origin of Online advertisement

In its 17-year existence, Online Advertising has become the fastest, and one of the most effective

advertising mediums in history. Today, it is one of the essentials of a successful business, a media

platform that allows interaction with customers in the most creative and interesting ways, (although

there continues to be a large majority of irritated web users).

For the sake of knowledge and a more sympathetic understanding of online ads, let us begin by tracing the history of online advertising.

The Origin of Spam

In 1970’s, a British comedy named ‘Monty Python’ first used the word ‘spam’ in an early sketch of a

couple at a restaurant trying to order food without ‘spam’ on it. This particular comedy had

tremendous impact on forum users who started to use the word in their Usenet posts. Soon, online

marketers started to overpots and flood forum users with junk mail that repeatedly recounted

‘spam’ in the Monty Python sketch.

By 1980, online marketers had changed from flooding Usenet forums to sending out emails,

practice that continues up until today. The numbers of spam emails that are sent everyday

is a whopping 90 million, which is not difficult to believe since 85% of our inboxes are

screaming spam

every hour.

As a marketing technique however, spam emails have little effectiveness since most of us barely

read any.

When Banners came to be…

The year 1994 saw the first online advertisement that was quickly followed by a period of

experimentation on advertiser and publisher ad formats and technology. This initial phase e

need with the launch of one of the first ad technologies, the DoubleClick in 1995. The earliest

advertisers were aware of the differences between traditional and online advertising and undertook

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a target-market research. However, it wasn’t until many years in following that the Internet was

used as a full-blown medium for effective advertising.

In the late 1990s, billions were invested in online advertising. Advertisers designed the standard

468×460-pixel banner ads that were traditionally highly demanded. With gradual increase in market

competition, there were thousands pouring in money behind developing banner ads. At the time,

Yahoo! could charge anywhere between $30-$100 to run banner ads. Up until the dot com bubble

burst and 4 years following, Internet spending on banner ads reached $8.2 billion.

Banner ads today, as they were more than a decade ago, are not effective online advertising

mediums. With considerable designing required, they are time consuming and expensive to create.

Besides, the low return on revenue spent on developing banner ads renders them useless to most

online advertisers. Not surprisingly therefore, by mid-2000, banner ads started to dry up, and has

become obsolete at the time of writing.

The efficiency of search engine technology has sustained online advertising. Because of its high

dependability and rate of interest, the search engine market has shown a steady growth over the

years, pulling online advertising many notches.

Google started as a search engine but clearly, is a hundred times more than that today. Google’s

algorithm shows the most appropriate results and for a long time, Google worked on its

functionality. Without selling anything, it continued to drive traffic until 2000, when it first

introduced Google AdWords.

Drawing away from banner advertising, still a popular form at the turn of the millennia, Google

revolutionized online advertising by using relevant text ads to sell. Google’s success rested on

introducing the click-through rate that would measure the relevancy of the advertisement, also

ensuring host payment only when users clicked on the ads.

Pay-Per-Click advertising was not a Google original. Google perfected PPC and changed the approach

advertisers took to online advertising. Google AdWords encouraged advertisers to come up with

comprehensive, relevant ads instead of mere selling.

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Pay-per-click and Pay-per-impression are two different online advertising models. Pay-per-click, as the

name suggests, involves payment to host every time users click on an ad. Pay-per-impression

calculates the cost of the entire marketing campaign that is conducted online.

PPC is instrumental in bringing targeted traffic to a website while PPI is the best brand building

model. Both however, are susceptible to click fraud. Where Google’s success lies is in devising

automated systems that keep corrupt practices in check.

Social Media Advertising

Social media is everywhere and has been in vogue since the past five years. At its core, social media

is a communications and networking tool, whose popularity has been constantly rising since its users

can connect, share and interact among themselves. Instead of being a mere informative reading

interface, social media allows users to comment, rate and share news, views and information.

Social media can be divided into:

Social News – Digg Propeller, Reddit

Social Networking Tools – Twitter, Facebook, Hi-5

Social Photo & Video Sharing – YouTube, Flickr, Photobucket

Social Bookmarking – Simply, Del.icio.us

Targeting the right market is important for any business and this is one of the biggest advantages of

social media advertising. By collecting a user’s demographic information, social media tells you

where a business’ target market is most wide and active. Advertisers can then use this information

to tap their intended market.

Social media advertising is viral, free and far-reaching. Although actual conversions cannot be

tracked from ‘friends’, ‘likes’, or ‘follows’, social media remains the best online advertising mediums.

The Current Face of Online Advertising

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Online advertising has recovered and has been steadily rising since 2004. With the number of hours

an Internet user spends browsing websites, advertisers have realized the importance and advantage

of exploiting user tendency to scour the web. From SEO marketing, blogs and social media to

sophisticated ads, interactive tools and branding technologies, advertisers are now using a wide

array of platforms to increase business visibility.

Viral marketing is now a popular mode of advertising using video ads to market products. Sites like

YouTube, Meta-cafe, etc., are popular product advertising platforms. But online advertising has barely

been perfected. Annoying pop-up ads still exist while free sites like YouTube now include

commercials or pre-roll ads that cannot be bypassed to the actual video.

1.4 Types of Online advertisement:

Floating ads: A floating ad is a type of rich media Web advertisement that appears uninitiated superimposed over a user-requested page, and disappears or becomes unobtrusive after a specific time period (typically 5-30 seconds). The most basic floating ads simply appearover the Web page, either full screen or in a smaller means of escape, such as a close button. More sophisticated versions can come in any shape or size and include sound, animation, and interactive components

Expanding ads: These are ads that expand when users click on them. The ads do not expand just from mousing over hyperlinks, which is a technique used by some other advertisers. They often take a long time to download, which in turn can negatively impact thevisitor's experience on that page. Polite ad formats were developed to address this challenge by enabling advertisers to serve larger file formats without disturbing the load time for the rest of the images on the page. A polite ad format is loaded in two phases:

Phase One: The initial load is a compact image or SWF file that is smaller in size, so there is no delay in loadingother contents on the page. This could be the first few frames of the ad, or a teaser. file that is smaller in size, so there is no delay in loading other contents on the page. This could be the first fewframes of the ad, or a teaser.

Phase Two: The main load is the full version of the ad. The full ad can have a larger file size. It is loaded onlyafter the whole web page has finished loading into the visitor's browser

Wallpaper ads: An ad which changes the background of the page being viewed

Trick Banner: A banner ad that attempts to trick people into clicking, often by imitating an operating systemmessage.

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Pop-up: A new window which opens in front of the current one, displaying an advertisement, or entirewebpage.

Pop-under: Similar to a Pop-Up except that the window is loaded or sent behind the current window so that theuser does not see it until they close one or more active windows.

1.5 Understanding the concept of Consumer Buying behaviour:

Consumer behaviour has been always of great interest to marketers. The knowledge of

consumer behaviour helps the marketer to understand how consumers think, feel and select

from alternatives like products, brands and the like and how the consumers are influenced

by their environment, the reference groups, family, and salespersons and so on. A

consumer’s buying behaviour is influenced by cultural, social, personal and psychological factors.

Most of these factors are uncontrollable and beyond the hands of marketers but they have

to be considered while trying to understand the complex behaviour of the consumers.

Consumer is the study “of the processes involved when individuals or groups select,

purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and

desires” (Solomon 1995, 7).

In the marketing context, the term „consumer ‟ refers not only to the act of purchase itself,

but also to patterns of aggregate buying which include pre-purchase and post-purchase

activities. Pre-purchase activity might consist of the growing awareness of a need or want,

and a search for and evaluation of information about the products and brands that might

satisfy it. Post-purchase activities include the evaluation of the purchased item in use and

the reduction of any anxiety which accompanies the purchase of expensive and

infrequently-bought items.

Each of these has implications for purchase and repurchase and they are amenable in

differing degrees to marketer influence (Foxall 1987). Engel, et al. (1986, 5) define consumer

behaviour as “those acts of individuals directly involved in obtaining, using, and disposing of

economic goods and services, including the decision processes that precede and determine

these acts”.

Simple observation provides limited insight into the complex nature of consumer choice

and researchers have increasingly sought the more sophisticated concepts and methods of

investigation provided by behavioural sciences in order to understand, predict, and possibly

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control consumer behaviour more effectively.

1.6 The Study growth of smartphones users:

To date, it’s estimated that there are roughly 2 billion smartphone users in the market

(1.91 billion to be exact), with that number expected to increase another 12% in 2016

to top 2.16 billion people globally. That means that for the first time (possibly in

history) more than one-quarter of the world's population will all carry a similar device.

The growth of smartphone devices can be attributed to a number of factors.

Technological innovation, improved usability, increased accessibility, but for many

the growth has been heavily attributed to a decrease in price.

The era of inexpensive or ‘Budget-Friendly’ smartphones has greatly opened the

doors for mobile adoption in emerging markets. When smartphones first entered the

market, their price (closer to the $1000 mark) made it difficult for consumers to justify

the purchasing decision. But now the dramatic price drop of the smartphone is felt

largely to be the reason for its growth over the past two years in less developed

countries.

Heavy growth has been noticed in the Asia-Pacific ring, where global powerhouses

like China (500 million smartphones), Japan (57 million) and Indonesia (52 million)

set the standard for smartphone adoption. India, of course also plays a significant

role, with a population volume that demands respect.

India has a huge smartphone market of 167 million, with the number predicted to

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grow past 200 million by 2016. What is interesting to note though is India's

smartphone penetration level, coming in last of our current list at 13%.

1.7 India’s Share in Global Smartphone Market:

Share of India in global smartphone market is expected to reach 13.5 per cent with 180

million units by 2019 from 7.6 per cent at present, according to a study by Assocham-

KPMG. “Thanks to digital revolution riding on the aggressively priced mobile data packages, India

is expected to have a total number of 180 million smart phones by 2019 claiming 13.5 per cent of

total global smart phone markets from 7.6 per cent at present,” industry chamber Assocham said

in a statement.

The study attributes growth to the advent of affordable smartphones in the price range of Rs

3,000–10,000 from local manufacturers and increase in low-cost data connectivity options as

reason behind shift of people towards smartphone. “Out of a total handset sale of 30 crore units

in financial year 2015, smartphones contributed 11.40 crore units, i.e., 38 per cent. This

contribution is projected to grow to above 50 per cent by 2020,” the statement said. With urban

penetration levels reaching saturation, the industry is looking at rural India for continued growth,

it added. “The growth of Indian handset manufacturing companies has been nothing less than

miraculous over the last five years.

India manufactured 11 crore mobile phones worth Rs 54,000 crore in financial year 2016, showing

a year-on-year growth of 83 per cent and 186 per cent, in volume and value terms, respectively,”

the statement said.

The study projects share of domestic smartphone makers is slated to grow further. “Out of 235

million handsets shipped in 2015, 40 per cent were smartphones and are projected to constitute

60 per cent of total mobile handset sales by 2020. The smartphone shipments in India grew a

healthy 23 per cent annually in first quarter of 2016 compared to the global growth, which stalled

for the first time ever since smartphones first began to sell,” the statement said.

It said that increase in Smartphone sales has changed the face of e- commerce industry in India in

the last two years. “Mobile transactions accounted for 41 per cent of total e-commerce sales in

2014. Developing a mobile (sometimes mobile only) strategy has been an important agenda for

many of the leading e-commerce players in the country over the last two to three years,” the

statement said.

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Chapter two

Objective and Scope of the Research:

1. Research Objective:

1. To understand the core concept of Online Advertising.

2. To Study the effect on Consumer Behaviour.

2. To find out what influenced customer’s buying decision.

Scope of Research:1. To understand role of online advertising.

2. Change in advertising trend after internet revolution.

3. Internet buying behaviour analysis and change in characteristics.

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Value of study

The study may benefit marketers, businesses, government and academicians. This

study may be able to inform marketers on the consumer preference of the

advertising media and whether using Internet adverting would be effective in

reaching and increasing awareness of the target audience.

Before adapting marketing practices to the Internet, it is imperative to understand the

characteristics of the online customers towards online advertising as would be

revealed by this study. The Internet has grown in popularity as an advertising

medium because, among other things, it allows 24-hour interactivity between the

advertiser and customer. It is important for local businesses to look into internet

advertising as more consumers turn to the internet for their purchasing.

A small business that can offer online purchasing may be able to tap into this

customer base. The government from this study would understand the value of

Internet advertising

and its influence on consumer decisions which ultimately impacts electronic

commerce/trade, and therefore would effectively regulate how internet advertising is

delivered by acting rationally on laws that would restrict data usage, creating an

ambient environment and availing resources to internet providing companies and at

the same time safeguarding the interest of consumers.

For scholars and academic researchers, the current study forms a basis upon which

future research on Internet Advertising may be established. The findings may be

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resourceful in providing viable information to academicians, researchers and

consumers on various concepts related to internet advertising.

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CHAPTER THREE

LITERATURE REVIEW

3.1 Introduction

This chapter provides, through selective reference to some of the literature, a clearer

understanding of Internet advertising concept and outlines previous research

findings on the effectiveness of internet advertising based on measures of

advertising effectiveness.

3.2 Theoretical Foundation of the Study

Emotional appeals in advertising theory and classical conditioning theory in learning

consumer behaviour form the theoretical basis of this study. Extensive academic

research has been conducted on the psychology of emotion (e.g., Lazarus 1984)

and the ways in which ad-evoked feelings may influence consumer response to

marketing communication.

Scholars have also observed that advertising may evoke both positive and negative

emotions when seeking to persuade. Indeed, Brown, Homer and Inman (1998,

p.115), suggest that from a practical perspective, “the relative strength of positive

and negative feeling effects potentially could guide advertisers’ decisions regarding

executional strategies.”

It has been suggested that ads use positive affect to make consumers like the ad

And then buy the product, and negative affect to evoke an uncomfortable state that

Makes consumers want the “solution” offered by the advertiser. Unfortunately, there are no guarantees that what the consumer

actually experiences will be the affective response the advertiser intended to create: Research has shown that this kind of mismatch between advertiser intentions and consumer response occurs all too often.

Classical conditioning is often referred to as a means in which humans learn by

association. In the classical conditioning paradigm, Pavlov’s Dog, a neutral stimulus

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is paired with an unconditioned stimulus to elicit an unconditioned response. For

example, after repeated pairings of meat (known to cause salivation) with the sound

of a bell, the sound of a bell alone elicits salivation. This association is dependent ontwo characteristics of the association: contiguity and frequency. The law of contiguity

states that in order for associative learning to take place, the unconditioned stimulus

and the neutral stimulus must be paired close in time to each other. Furthermore, it is

not enough for a neutral stimulus and an unconditioned stimulus to simply co-exist in

a close period of time. The more frequent the pairing, the easier it is to form an

association.

Proponents of applying classical conditioning to marketing believe that the

association between a product and positive stimuli may help explain the effect of

many variables in communication and attitude change. It tested the

effects of a positive unconditioned stimulus on product preference. His results

support the notion that the simple association between a product (conditioned

stimulus) and another stimulus such as music (unconditioned stimulus) can affect

product preferences as measured by product choice.

However, these effects were diminished in situations where consumers were in a

clear decision making mode. The learning’s of classical conditioning give us some

insight on the characteristics of an effectively branded Internet advertisement. First

and foremost, the frequency with which an ad is served impacts brand awareness.

Frequency also impacts whether or not, an association between a message and a

brand, is made by a consumer.

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3.3 Internet Advertising

As a new advertising channel the Internet and particularly the World Wide Web

(WWW) portion of the Internet, are challenging traditional forms of mass media

advertising (Hoffman and Novak, 1996; Hearn, Mandeville and Anthony, 1998).

Meeker (1998) defines a mass communication medium as the communication from

“one person or group of persons through a transmitting device (a medium) to a large

audience or market”. The Internet offers an interactive alternative to mass media

communication through the use of web pages, discussion groups and email

(Hoffman and Novak, 1996).

A significant advantage for advertisers will be the opportunity to communicate more

directly with individual consumers through this medium. Marketers will also be able

to promote their products and services in a personalized, targeted manner to

interested people within their target market. Importantly, wastage of advertising and

marketing funds often experienced when exposing promotional messages to the

mass market, may be reduced as a result of using this new interactive medium.

Advertisers will need to re-address their techniques, services and agency structure

and evolve need communication strategies for the Internet as market share is being

lost to this more personalized, interactive form of Internet advertising.

(1999) surveyed a national sample of over 400 participants and found

no majority opinion of Internet advertising-about a third of the participants liked,

disliked, and felt neutrally toward Internet advertising respectively. The Internet users

found online advertising was informative but less entertaining, and it did not

encourage them to make purchases even they did not perceive it to increase product

prices. they examined the differences between heavy,

medium, and light web users and concluded that “heavier users hold stronger beliefs

about and attitudes toward Web advertising which likely lead to stronger purchase

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intent” (p: 201). Comparing with lighter users, the heavy Internet users believed that

web ads were more believable, entertaining, informative and helpful; but harder to

understand. They perceived that web advertising was a good thing, moderately

essential, and it reduced the cost of products. Marketers should include web

advertising in their promotion efforts but the ads should be designed with the

respective user groups in mind.

3.4 Integrated Marketing Communication

The Internet has contributed to a greater adoption of integrated marketing

communication (IMC) strategies, by allowing marketers to communicate more

directly with individual consumers (Low, 2000). Internet functions become integrated

into a company’s communications mix, which permits the operation of the Internet as

an advertising medium to be incorporated alongside more traditional media types.

The application of the IMC concept involves the progression away from the

traditional one-to-many marketing communication model for mass media to the one-

to-one communication, or many-to-many communication model (as illustrated in

Figure 2.2) (Hoffman and Novak, 1996).

The inclusion of the Internet in the promotional mix will not eliminate the use of mass

media advertising channels such as television, radio, newspapers and magazines.

However, the Internet may reduce the amount of mass media advertising required.

Arguably, this will occur because the personal computer with Internet access is being

utilized frequently by target audience members as an effective communication

channel to make both social exchanges using email and commercial exchanges to

purchase products on the web. The advertising industry is being challenged to create

more direct, personal and interactive communication with the target market through

the use of the Internet.

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3.5 Effectiveness of Internet Advertising

Various researchers have studied numerous factors that might have an impact on

Internet advertising recall. The factors include ad characteristics, Internet users’

viewing mode and duration of viewing, campaign publicity, attitudes toward the web

site or ad, and curiosity and innovative advertising strategy2003.

Mullarkey (2003) examined the effects of such factors as viewing mode, visit

duration, text and page background complexity, and the style of banner ads on both

aided and unaided recall. The authors did not find any significant impact of the web

site context factors on advertising recall. The key finding was that the duration of

page viewing is a strong determinant of the ability to recall banner ads; however, a

minimum level of exposure (around 40 seconds per page) is required to achieve a

reasonable level of advertising recall.

3.6 Internet Advertising and Consumer Behaviour

The evolution of the Internet as a global communication infrastructure (Cae, 2000)

has created a new advertising channel for advertisers and advertising agencies to

utilize and will provide advertisers with the means to more cost effectively target them

promotional messages to consumers. Psychological factors such as thinking, feeling,

sensation, and intuition directly correlate with customers’ online advertising

experience. Companies should aim to strengthen customer interactions with

advertisements on the Web, keeping both context and cognition in mind.

Unfortunately, most companies provide a generic experience to all customers rather

than relying on customer analysis to deliver a personalized experience. They’ve

failed to innovate and bring the online advertising experience to a whole new level of

interaction and integration that would truly let them achieve effective communication.

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When customers weigh benefits, they become emotionally involved with advertising

and promotion. Consumers identify ways the product or service can make them

happier, improve their lives or give them pleasure. This part of the consumer

response is irrational and can lead to impulse buying and competition to obtain the

product.

Repeated advertising messages affect consumer behaviour. This repetition serves as

a reminder to the consumer. Behaviour that stems from reminders includes suddenly

thinking of a product while shopping and making a decision to buy it, as if it had been

on the consumer’s "to-do" list (Lee 2002).

Consumer behaviour splits between loyalty and alienation depending on how well the

product lives up to its advertised benefits (Thorson, 2000). Corporate behaviour –

such as scandals or charity work – can also affect alienation and loyalty responses.

Once the consumer makes this choice, advertising and promotion are not likely to

undo that decision. The Cannon-Bard Theory that Walter Cannon and Philip Bard

advocated suggests human beings feel emotions first, and then act upon them.

When customers visit a Web site, the ads they encounter evoke an emotional

response—before they even decide what their next step should be. If ads don’t

trigger customers’ emotions, they may not take any action in response.

Based on the review of the research studies mentioned above, it is clear that Internet

advertising is gaining much attention and should be an essential part of a marketer’s

advertising media mix. The inconclusive findings call for further studies on Internet

advertising to gain more insight into consumers’ response and perception of the

Internet as an advertising medium. Hence, this study determined the effectiveness of

internet advertising as an ad medium, and its relationship to consumers’ response

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CHAPTER FOUR

RESEARCH METHODOLOGY

This chapter focuses on research methodology that was used in the study. It

provides a detailed description of the research approach adopted in this study.

Research design, target population, research instruments, data collection and

analysis methods used were presented in the subsequent sections.

4.1 Research Design

This study used descriptive research. Descriptive research involves gathering data

that describe events and then organizes, tabulates, depicts, and describes the data

collection (Glass & Hopkins, 1984). It often uses visual aids such as graphs and

charts to aid the reader in understanding the data distribution and therefore offered a

better clarification on online advertising, and ultimately give a clear picture on the

effectiveness and reliability of online advertising and its relationship to purchase

decision.

4.2 Data Collection

The research made use of primary data and Secondary data, which was collected

using structured questionnaire distributed to the 100 respondents. The administered

questionnaires were collected after completion by the respondents on the same day

and them responses used for analysis. The questionnaire had both open ended

questions to enable guide the respondent through filling of the questionnaire as well

as probe them for more information. The secondary data was collected from articles

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4.3 Validity and Reliability

Content validity refers to the extent to which an instrument represents the factors

under study. To achieve content validity, questionnaires included a variety of

questions on the knowledge of students on internet advertising and consumer

behaviour. All the subjects completed the questionnaires in the presence of the

researcher. This was done to prevent subjects from giving questionnaires to other

people to complete on their behalf.

Reliability can be ensured by minimizing sources of measurement error like data

collector bias. Data collector bias was minimized by the researcher’s being the only

one to administer the questionnaires, and standardizing conditions such as exhibiting

similar personal attributes to all respondents, e.g., friendliness and support. Pilot

testing was carried out by the researcher to identify any flaws on the questionnaire to

reduce errors of measurement and test for consistency.

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4.4 Data Analysis

The study applied both nominal and ordinal scale to measure a range of factors

establishing the effectiveness of internet advertising on consumer behaviour and an

interval scale in determining the relationship between internet advertising and

consumer behaviour. Descriptive statistics was used to analyse this data. The mean

responses, standard deviation and other relevant statistics were computed to better

understand the data. The data collected was compiled and edited to check for logical

inconsistencies. The data was then coded according to the responses. Relationships

between responses was assessed and presented using tables and graphs and

analysis. Regression and Correlation analysis was applied in this study to reveal

relationships among variables in the findings from the data.

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CHAPTER FIVE

Data analysis and Interpretation of Data.

This chapter presents analysis and findings of the study as set out in the researchmethodology. The results were presented on the impact of online advertisingon consumer buying behaviour towards smartphones. The study objectives were;

1. To understand the core concept of Online Advertising.

2. To Study the effect on Consumer Behaviour.

3. To find out what influenced customer’s buying decision.

Buyers decision process study targeted 100 respondents out of which all the

100 respondents responded and returned their questionnaires contributing to a

response rate of 100%. This response rate was sufficient. Reporting; a rate of 60% is

good while a response rate of 70% and over is excellent.

This commendable response rate was due to extra efforts that were made via

courtesy calls made to remind the respondents to fill-in and return the

questionnaires. The chapter covers the demographic information, and the findings

based on the objectives. The findings were then presented in tables, graphs and

charts as appropriate with explanations being given in prose thereafter.

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Primary Data and Secondary Analysis:

40%

25%

10%

25%

On average, how many hours do you spend on the Internet per day?

<1hr 1hr to 2hrs 3hr to 4hrs 4hrs to 5hrs above 5hrs

The above graph shows how many hours spend by the consumer on an average on internet. We can see that 40% people send around 5hours on internet where as 25% people send around 1hr to 2hr and 4hr to 5hr respectively.

35%

65%

Do you pay attention to online advertising?

yesno

The show does people pay attention on online advertisement. We can see that almost 65% people pay attention on various Ads whereas only 35% don’t pay attention.

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Y e s n o

72%

28%

Do you like advertisement regards to Mobile phones ?

Do you like advertisement regards to Mobile phones ?

The graph depicts liking of advertisement in regards to mobile phones we can see that 72% like the various ads whereas rest 28% don’t like it.

large influence75%

meduim influence15%

Not likely10%

How much influence do you feel adver-tisements have over your buying behav-

ior?

large influencemeduim influenceNot likely

The graphs shows 75% people are highly influenced where as 15% have medium influenced and 10% are not influenced.

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50%

20%

20%

10%

How you find such advertisements?

informativecreating Awarenessannoyingwaste of time

The graph depicts 50% of people think advertisement as informative where as 20% think they are creating awareness and annoying. The rest 10% think they are waste of time

y e s n o

55%

45%

Have you made any purchases after seeing internet ads?

Have you made any purchases after seeing internet ads?

The bar graph shows 55% people are likely to make purchase after seeing an advertisement whereas rest 45% don’t agree for making purchase decision

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I agree I disagree not sure0%

10%

20%

30%

40%

50%

60%

70%

Advertising is beneficial to consumers because it provides important information about goods and services.’To what

extent do you agree with this statement?

Advertising is beneficial to consumers because it provides important information about goods and services.’To what extent do you agree with this statement?

More than 60% people agree thinking online ads are beneficial for importantFor providing information about the products and services whereas 15% disagree And 20% are not sure.

70%

25%

5%

Do you agree that people become victims of Advertising by purchasing unnecessary

product?

I agree I disagree Not sure

According to graph 70% people think they had made unnecessary purchase because of online ads where 25% disagree and rest 5% are not sure.

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I agree I disagree not sure0%5%

10%15%20%25%30%35%40%45%50%

‘The more times an advertisement of new mobile phones is viewed by a consumer, the more likely the consumer is to go and buy the product.’To what extent do you agree with

this statement?

‘The more times an advertisement of new mobile phones is viewed by a consumer, the more likely the consumer is to go and buy the product.’To what extent do you agree with this statement?

The bar graph shows around 42% of people agree they likely to buy cell phones by watching ads where as 34% disagree and the rest 21% are not sure.

Product information

Price information

Celebrities and famous people

Costumer reviews

Discounts and deals

0 10 20 30 40 50 60 70 80

What do you look out for in an mobile phone advertisement?

Series 1

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The bar shows 70% people buy phones depending upon the reviews of other customer where as 35% make purchase depend on celebrity endorsement, 25% make purchase depending upon quality of product and 20% and 10% people make purchase decision depending information about the product and discount and deals.

facebook ads youtube ads Twitter ads Banner adverts0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Which methods of online advertising are most influential on your buying behaviour?

Which methods of online advertising are most influential on your buying behaviour?

Around 45% people are influenced by YouTube ads and 35% are influenced by ads on Facebook and 15% are influenced by banner ads on their website where as just 5% are influenced by twitter ads.

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Secondary Data Analysis:

80% of internet users own a smartphone (Source: Smart Insights, 2015) By 2018, eMarketer estimates over one-third of consumers worldwide, or more than 2.56

billion people will be smartphone owners. That 2018 figure also represents over half-51.7% – of all mobile phone users. (Source: e Marketer)

84% of small businesses who have invested in a mobile presence say that they see immediate and long-term benefits (Source: Web.com)

According to Google’s Mobile Search Moments Study, 40% of mobile searches have local intent. Similarly, 77% of mobile searches occur at home or at work, while 17% is on the go. (Source: Google Mobile Search Moments Study)

According to a recent study, mobile internet traffic reached 60%, surpassing desktop internet traffic which declined to 40%. (Source: CNET)

84 percent of small businesses that are using mobile marketing methods report increases in new customers. (Source: Marketing Zone)

There are officially more mobile devices than people in the world. The world is home to 7.2 million gadgets, and they’re multiplying five times faster than we are. (Source: The Independent, 2014)

Mobile Marketing will generate $400 billion in 2014 (Source: Mobile Marketing Association) Mobile Ad Spending will top $160 billion worldwide by 2018, taking over 65% of the digital

market. (Source: E-Marketer) Mobile commerce will account for 24.4% of overall ecommerce revenues by the end of

2017. (Source: CMO Council) Android expected to have 31% market share by 2016 (Source: IDC)

Mobile Device Usage Statistics

70% of all mobile searches result in an action within an hour. (Source: Forbes) 75% of shoppers admitted to using their mobile device while shopping in store (Source: In

Reality) 70% of mobile searchers click to call a business directly from Google’s search results

(Source: Search Engine Watch) 53% of American consumers use their smartphones to access search engines at least once

a day (Source: Google and Mobile Marketing Association Survey) Globally, 80% of consumers have used computers to access the Web within the previous

seven days. Sixty percent used their mobile devices to do so (Source: Google and the Mobile Marketing Association Survey)

Some analysed the mobile capabilities of the top 50 high street retailers finding that: 40% do not have a mobile optimized store locator, 20% don’t have a transactional mobile site, 46% don’t support responsive web design (Source: E-consultancy)

68% of people use a mobile device to look up a store address (Source: Social Light) 96% of new smartphones sold are either iPhone or Android Devices (Source: The Verge) 91% of Smartphone users keep their phone within arm’s length.  (Source: Forbes)

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52% of mobile users check the prices of an item online they wish to buy. (Source: Business On)

90% of consumers say buying decisions are influenced by online reviews (Source: Marketing Land)

86% of mobile internet users use their mobile device while watching TV, with 37% of those browsing the internet for non-related TV material (Source: Yahoo)

25% of US mobile web users only access the web from their mobile phones (Source: On Device Research, as reported by MobiThinking)

60% of global mobile consumers use their mobile device as their primary or exclusive internet source (Source: Internet Retailer)

25% of smartphone owners ages 18-44 can’t remember the last time their phone wasn’t next to them (Source: Fast Company)

Smartphone users spend an average of 60 minutes a day. iPhone users average 90 minutes a day. (Source: Experian)

Wi-Fi has become the medium of choice. 2/3 of US consumers prefer Wi-Fi to Cellular. (Source: Deloitte)

By 2020, it is predicted that 24 Billion devices will be connected to the Internet. The vast majority will use some form of wireless for access.

Mobile Websites Statistics

55% of all searches are from mobile devices (Source: eReachConsulting) 60% of global mobile consumers use their mobile device as their primary or exclusive

internet source (Source: Internet Retailer) “I’m out here.” 60% of mobile users expect a site to load in 3 seconds or less.  74% are

willing to wait only 5 seconds for a site to load before leaving. (Source: Compuware.com) 48% of users say that if they arrive on a business site that is not mobile optimized, they

take it as an indication of the business not caring (Source: Margin Media) 95% of smartphone users have used their phone to look up local information. After doing

so, 61% called and 59% visited. (Source: Forbes) 50% of all mobile searches are conducted in hopes of finding local results (Source:

SearchEngineWatch) 61% of local searches result in a purchase (Source: Business2community) 50% of mobile users visit a store within a day after conducting a local search (Source:

Google)

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Loyalty Programs and Rewards Statistics

78% of consumer’s report being either “frequently” or “sometimes” influenced by coupons (Source: FirstDataCanada)

Mobile Coupons receive 10x higher redemption rates than print coupons (Source: GoMobileBook.com)

56% of smartphone users want to receive location-based offers on their phones when they are near a store (Source: FirstDataCanada)

89% of consumers carry at least one merchant loyalty program card in their wallet (Source: Imprint)

40% of shoppers look for offers on their mobile devices while in store (Source: Millennial Media)

48% of consumers say that the most critical time to gain their loyalty is when they make their first purchase or begin service. (Source: Click Fox)

Returning customers spend on average 67% more than first-time customers. (Source: Bain and Company)

Up to 15% of a business’s most loyal customers account for 55-70% of the company’s total sales. (Source: The Centre for Retail Management at North-western University)

Only 34% of SMB owners have any loyalty program at all, and of those who do, the majority are offline. (Source: BIAKelsey)

78% of consumers are not yet loyal to a particular brand. (Source: Nielsen) 94% of loyalty program members want communications from the programs they participate

in. (Source: Maritz)

Thirty-eight percent of marketers identified their biggest challenge in 2015 as improving customer acquisition and retention. (Source: Teradata)

Online content drives 62% of millennials to brand loyalty. (Source: NewsCred) 73% of smartphone users are interested in interacting with their programs through their

mobile device. (Source: Maritz) 61% of SMBs report that more than half of their revenue comes from repeat customers,

rather than new business. (Source: BIAKelsey) Socially connected loyalty program members have an 18% lift in spend. (Source: Crowd

Twist) 63% of women and 53% of men say they will stay with a brand longer when earning

rewards. (Source: Cherry London) 69% of consumers say choice of retailer is influenced by where they can earn customer

loyalty/rewards program points. (Source: Maritz) 73% of smartphone users are interested in interacting with their programs through their

mobile device. (Source: Maritz) Mobile offers are redeemed 10x more frequently than print offers. (Source: eMarketer) A 2% increase in customer retention has the same impact as decreasing costs by 10%

(Source: Hub Spot)

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Wi-Fi Marketing Statistics

60% of people can’t go without Wi-Fi for more than 1 day; 75% of people say 1 week without Wi-Fi would leave them grumpier than 1 week without coffee (Source: Iconic Displays)

62% of local business customers spend more time in store if Wi-Fi is available (Source: iGR)

Businesses who offer free Wi-Fi to boost sales numbers have a success rate of 72% (Source: iGR)

75% of businesses say they consider free wireless access to be either “important” or “very important” to their business now. (Source: iGR)

64% of consumers make a restaurant choice based on availability of Wi-Fi services (Source: Accenture)

79% of even the least Wi-Fi Interested shoppers, age 45+ are positively influences by in-store Wi-Fi availability (Source: Accenture)

78% of Facebook users are mobile-only (Source: CMO Council) 56% of social network users have stated they would use their social profiles to login in

return for a customized experience with a brand. (Source: CMO Council) 74% of people would be happy for a retailer to send a text or email with promotions while

they’re using in-store Wi-Fi (Source: OnDeviceResearch) Up to 70% of consumers in-store have a Wi-Fi capable device in their pocket (Source:

Retail Touch Points)

64% of hotels now offer free Wi-Fi. (Source: Hotel Chatter) 50% of consumers feel comfortable making a large purchase in-store if Wi-Fi access is

available. (Source: Accenture) By 2017, 60% of carrier network traffic will be offloaded to Wi-Fi. (Source: Wireless

Broadband Association) 71% of all mobile communications flows over Wi-Fi. (Source: Wi-Fi Alliance)  

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Mobile Commerce and Engagement Statistics

71% of consumers receiving a quick brand response on social media say they would likely recommend that brand to others (Source: Forbes)

80% of shoppers admit that they’re more likely to purchase from and interact with a brand that offers an engaging mobile experience (Source: Huffington Post)

78% of small businesses attract new customers through social media (Source: Relevanza) 62% of shopper’s search for deals digitally for at least half of their shopping trips (Source:

MA/Booz & Company Shopper Survey) 55% of US Internet users will redeem a digital coupon or code at least once per year

(Source: Digital Marketer) 80 percent of mobile users prefer locally relevant advertising and 75 percent are more likely

to take an action after seeing a location-specific message (Source: Mobile Audience Insights Report from JiWire)

iTunes App Store now has 1.2 million apps, and has seen 75 billion downloads to date (Source: TechCrunch)

Forty-two percent of m-commerce sales come through apps (Source: Internet Retailer) Mobile app store revenues worldwide are projected to grow to US $76.5 billion in 2017

(Source: CMO Council) 44% of consumers say that they would like brands to deliver deals and coupons to their

mobile devices (Source: CMO Council) 53% of the “on-the-go” U.S. audience is willing to exchange their location in exchange for

more relevant content and better information, including mobile deals (Source: JiWire) More than 33.3 million U.S. consumers already engage in shopping-related activities on

their mobile phones, 7%, or 2.3 million, of those consumers have made a purchase on their devices, the report finds (Source: Experian Simmons, Mobile Consumer Report)

87% of millennials always have their smartphone at their side, day and night. 78% of millennials spend over 2 hours a day using their smartphones. 68% of millennials consider their smartphone to be a personal device (Source: CMO Council)

46 percent of consumers have used their phone to get product information while in a store (Source: Briabe Media)

56 percent of people believe mobile can make the shopping experience more enjoyable (Source: Light speed Research)

13.1 million consumers access retail content via mobile phones with 8.2 million of those visiting mobile commerce websites (Source: comScore/Millennial Media Mobile Retail Study)

67 percent of retailers see value of having customers use their smartphones within the store and 41 percent said they perceive a lot of value in mobile in-store (Source: RSR Research)

Within the 49% of mobile users who have made a mobile purchase in the last six months, 84% look for local retailer information, 82% find online retailers, 73% find a specific manufacturer or product website, 71% learn about a product or service after seeing an ad, 68% find the best price for a product or service, and 63% search before purchasing in a store or from a catalogue (Source: Performers Mobile Search Insights Study, conducted by ROI Research)

75% of heavy mobile users said mobile search makes their lives easier, 63% said access to mobile search has changed the way they gather information, and 32% said they use mobile

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search more than search engines on their computers (Source: Performers Mobile Search Insights Study, conducted by ROI Research)

Over 70% of iPhone owners report using applications or their smartphone’s web browser to help them while shopping in-store, and 41% are making purchases directly from their phones (Source: Chadwick Martin Bailey and iModerate Research Technologies)

78-84% of consumers now rely on their social networks when researching new products (Source: IBM Report)

62% of smartphone users said they have purchased physical goods from their mobile devices in the last six months (Source: Adobe Survey)

69% of retail executives said mobile is an important strategic initiative (Source: NRF) 79% of smartphone users found it useful to download mobile coupons to their phones

(Source: Accenture, reported by Internet Retailer) 73% of consumers find it useful to receive an instant coupon as they pass by an item in a

store (Source: Accenture, reported by Internet Retailer) 56% of shoppers with smartphones believe using their phone during the shopping

experience will make it more enjoyable (Source: Accenture, reported by Internet Retailer) 73% of shoppers with smartphones prefer to reference their mobile device while in-store

rather than ask a sales associate for help (Source: Accenture, reported by Internet Retailer) 71% of Generation Y respondents (approximately 16-31 years old) said they use mobile

coupons to get e-commerce discounts (Source: Cognizant Technology Solutions and RIS News)

SMS Statistics

SMS coupons are redeemed 8% more than emailed coupons (Source: CMO Council) 98% of all SMS messages are opened, but only 20 per cent of emails are looked at

(Source: Venture Beat) 99% of text messages are read and responded to within 90 seconds of receiving them

(Source: DigitalMarketingMagazine) SMS sees an engagement rate 6-8 times higher than email marketing (Source:

60secondmarketer) Brands using SMS successfully reach 95% of smartphone and non-smartphone users.

(Source: GoMoNews.com) 90% of users who enrol in an SMS loyalty program feel they gained value from it. 

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CHAPTER SIX

Swot Analysis

SWOT is an acronym for strengths, weaknesses, opportunities and threats. When

you do a SWOT analysis on your advertising agency, you must address all four

categories. This is important not only for your business planning but also for

presenting your case to lenders. They will want to see that you have addressed both

the negatives and positives of your advertising enterprise. Your SWOT analysis can

help you compete by emphasizing positives and neutralizing negatives.

Strengths of this research:

–          Easy to target and reach more audience at a cheaper price.

–          Campaigns can be easily customized and made more targeted as per our business requirements.

–          As the world is more dependent on the internet, it helps the business to reach out and connect with the people on a larger scale.

–          Saves a lot of money as compared to the traditional way of marketing as it is cheaper and efficient.

–          Being recognized as a brand has become much easier.

–          The options are not confined to one or two, there are many options and people can choose to switch from one to the other if PLAN A doesn’t work and that does not cost a great loss of money.

–          Promotion of small business is easy as it is cost effective.

–          Entrepreneurs find it very useful as they do not need a huge budget for this and it gives them huge platform to make a mark on the digital world.

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Weakness:

–          A challenge to reach the population which is still not using the internet.

–          High chances of failure of internet marketing campaigns because of confusion due to the availability of many different marketing options.

–          Keeping pace with new trends and technology.

–          Need of deep understanding of changing human behaviour and requirements.

–          If your brand or product is not justifying the users need, then the chance of getting bad reviews in public is very high, which in turn might damage the reputation.

Opportunities:

–          More and More employment for the youth as this field is just growing and number of professionals are less.

–          Increase the reach of your brand, therefore, leading to direct profit.

–          There are lot of ways through which owners earn money apart from their primary business, eg- giving space for ads on website, affiliate marketing in e commerce etc.

Threats:

–          If it doesn’t work perfectly then chances of back fire is higher i.e. it might damage the brand name.

–          Due to ever changing trends of different marketing areas and ever changing rules of search engine for optimizing the content, continuous awareness is required, which is very difficult.

–          Storage of data with full security is still a big question mark.

–          Analysing the data in a wrong way can lead to damaging results which is found in a lot of companies.

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CHAPTER SEVEN

Challenges faced by Online Advertising Industry in India:

World sees India, as the next place to be in and investing in its youth, the online marketers

face surmounting challenges from all sides. When you look at a pessimistic way, I see lots of

challenges. Take a break, come back and look again, you see lots of positives and feel thrill

about it.  On a marketing perspective, I have clubbed some of challenges the digital

marketers in India face today or may be in near future

Educating the client:  Do you prefer to have a good client? Take some time and effort

to educate them on digital marketing. Having a huge budget earmarked for digital media

or just having a Facebook page is not going to help anyways. It’s easy to entice and

convince client with digital parlance, but on long-term you will have a disappointed and

grumpy client. No agency would prefer that. Extra effort to train client will pay you on

long-term.

Engagement is the fundamental: 

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half” as

quipped by John Wanamaker long time ago doesn’t hold in digital marketing as such. We

spend, measure and improvise here with the watchword ROI. Here is the trouble in disguise-

let go off the engagement factor. When I mean engagement, it’s not about the impressions,

reach or SOV, but it’s more of intangible and broadly AIDA.

 

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Diversity- 

East to West, North to South, planning for a nationwide campaign or at a regional level,

the interest, culture and tastes vary and is very visible in   any digital platform.  This is a

debatable issue, as people use internet in the universal language English and covers the

educated middle and upper class. True, but local flavours rule the roost. Take any

successful marketing campaign in offline, we get the connect. Going forward where

smart phones and mobile penetration will be higher than broadband, Digital Marketers

have many platforms opened up to experiment? The challenge and success depends on

understanding the diversity.

 

Matrices Vs Creativity: 

Loads of data are available once a digital campaign is running or even while at the

planning stage. Obsessed with data and its interpretation may lead to overlooking

creativity by digital marketer. Coming up with really out-of-the-box idea or replicating

some successful campaign or even tweaking an already successful campaign to get

more leverage or any other viable options, should have proper balance with creativity

and matrices.

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Getting it Integrated: 

Any digital campaign with its well defined goals have many platforms- e-mailers, sms, ad

words, special promotions on Social media and SEO and ORM which area long-term

affair and many more to come in future. Each of these platforms has its own perils and

should be approached with its own expertise. Thankfully, at present there are agencies

/individuals who have expertise in each area and all a good Digital Marketer has to do is

get it integrated.

Other challenges:

Everyone knows that targeting your audience doubles your chances of success. The aim of

every advertising campaign is to reach customers while avoiding those who are not interested,

but the reach of the internet is so huge that this not an easy task. It is also not easy to check if

you are indeed, reaching your target audience or not. Measuring the ROI or impact of your

advertisement is another grey area in online advertising? The click through rate has been used

as a metric of measuring success, but it is hardly a fool proof method

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Another challenge faced by online advertisers is the rise and rise of the mobile internet

user. Internet use on mobiles and tablets is set to overtake desktop internet use soon. The fact is

that revenues generated from advertising on mobile devices are lower than revenues for desktop

advertisements. Not only that, the format for creating an ad on a desktop is different from that

required for tablets, which is in turn different from the format required for a smart phone. This

means that you essentially need to develop different ads for all three different platforms. The

good thing is that with every challenge comes an opportunity too. The fact that a phone can

pinpoint a persons’ location is a huge advantage for advertisers. It enables them to send ads that

are relevant to the location. A few months’ back UTuneMe, an internet radio app that allows you

to hear audio broadcasts from all over the world, launched a geo-targeted mobile ad platform.

Advertisers using this app can now deliver ad content based on the user’s location. This makes

the ad content received by the user a whole lot more effective and relevant.

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CHAPTER EIGHT

Summary, Conclusion and Recommendation

8.1 Introduction

This chapter presents summary of findings, conclusion and recommendations of the

study in line with the objectives of the study.

8.2 Summary of the Study

The study found that the effectiveness of internet advertising on reach and creation

of awareness was determined by the level of knowledge about the existing platforms

of advertisements and time spent on these media. On average, a person spent more

than4 hours on the internet during his free time than that of TV and movies and print

medium and therefore the reach of internet medium is much better than that of other

media. A higher percentage indicated that they were made aware of existence of

various products through internet advertising and therefore it was effective in

creating awareness. The study revealed that the ability of the respondents to recall

the internet ads were low compared to TV, and therefore even though the reach of

internet is much higher than other forms, TV ads are much more reliable than

internet advertising.

Internet advertising is a key determinant of purchase decision of the customers as

they consider it to be an interaction point between them and the company from which

they buy their products from. The study also established that internet advertising has

significant relationship with purchase decision of the consumers. From the Pearson’s

correlations analysis, the study established that there is a positive relationship

between consumer behaviour and internet advertising.

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Conclusion

The objective of the study was to determine the impact of online advertising

on consumer behaviour using a sample of various students. After analysis of the

study findings, the study concludes that the impact of internet on reach and

creation of awareness was determined by the level of knowledge about the

existing platforms of advertisements adopted by various companies in India and

time spent on various media. Internet advertising was effective in providing higher

reach and creation of awareness. However, in spite of the diverse usage of internet

and wide interaction with various internet advertisements, fewer respondents were

able to recall the internet ads they had seen. This implies that the reliability of

internet advertising is quite low. The research established that TV advertising is

more reliable than internet advertising therefore conforming that TV ads are much

reliable than internet advertising. The study concludes that online advertising

influenced purchase decision of the customers to a moderate extent as only nearly

half of the respondents were influenced purchase decision. However, internet

advertising is a key determinant of purchase decision of the customers as they

consider it to be an interaction point between them and the company from which they

buy their products from. The study also concludes that internet advertising has

significant relationship with purchase decision of the consumers. The study further

concludes that internet advertising contributes most tithe consumer behaviour and

that internet advertising was a significant factor in predicting the consumer

behaviour. In addition, there is a positive relationship between consumer behaviour

and internet advertising. This implies that companies should invest more in internet

advertising to increase their market share and conduct market research on the

different markets in various countries to ensure that the internet advertising initiatives

being implemented suits the targeted markets to improve product purchases.

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Recommendations

The study established that the reliability of internet advertising is low and therefore

recommends that the management of companies using internet advertising should

provide unique experience to its customers based on customer analysis to deliver a

personalized experience to the customers, the study also found that

internet advertising is effective in reach and creation of awareness and recommends

that the companies should invest more in internet advertising to increase them

market share and provide product information. Finally, the study determined that

there is a positive relationship between internet advertising and consumer purchase

decision and further recommends that companies should conduct a market research

on the different markets in various countries ensure that the internet advertising

initiatives being implemented suits the targeted markets to improve product

purchases.

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CHAPTER NINE

Annexure

Questionnaire on The impact of Internet advertisement on consumer behaviour towards mobile phones.

1. On average, how many hours do you spend on the Internet per day?

o <1hro 1hr to 2 hro 3hrs to 4hrs o 4hrs to 5hrso above 5hrs

2. Do you pay attention to online advertising?o Yeso No

3. Do you like advertisement regards to Mobile phones?

o Yeso No

4. How you find such advertisements?

o Informativeo Creates awarenesso Irritatingo Waste of time

5. How much influence do you feel advertisements have over your buying behaviour?

o Large influenceo medium influenceo Not sure

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6. Have you made any purchases after seeing internet ads?o yeso no

7. ‘Advertising is beneficial to consumers because it provides important information about goods and services. ‘To what extent do you agree with this statement?

o I agreeo I disagreeo not sure

8. Do you agree that people become victims of Advertising by purchasing unnecessary product?

o I agreeo I disagreeo not sur

9. ‘The more times an advertisement of new mobile phones is viewed by a consumer, the more likely the consumer is to go and buy the product. ‘To what extent do you agree with this statement?

o I Agreeo I Disagreeo Not sure

10. The Advertising is beneficial to consumers because it provides important information about goods and services.’ do you agree with this statement?

o Yes, I agreeo No, I disagreeo Not sure

11. What do you look out for in a mobile phone advertisement?

o Product informationo Price informationo Celebrities and famous people

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o Discounts and dealso Costumer reviewso Other

CHAPTER TEN

Bibliography:

The following are the list of the website that were used in completing this research project: -

www.google.com www.ask.com www.wikipedia.com www.marketingland.com www.business.com www.linkedin.com www.knowonlineadvertising.com

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Apart from these websites and use of internet, various articles and books and newspaper were referred and have played major contribution in the completion of project