Vindhya Institute of Management and Research

(VIMR) Indore
DEPARTMENT OF MANAGEMENT STUDIES

Major Research Project

on
” THE EFFECTIVENESS OF INTERNET ADVERTISING
ON
CONSUMER BEHAVIOUR "
Dissertation submitted in partial fulfillment of the requirement for the degree of

Masters of Business Administration

(2018-19)

Supervisor : Submitted By
Prof. Amit Patil Ajay Yadav
(Enroll No. DX*******)

1
 CERTIFICATE

This is to certify that Ajay Yadav a student of MBA 2nd year 4th semester in year (2018–
2019) with Marketing and HR as specialization from Department of Management
Studies, Vindhya Institute Of Management And Research Indore, has successfully
completed the research project entitled “A STUDY ON STRESS MANAGEMENT ON
EMPLOYEES WITH SPECIAL REFERENCE TO NTPC LTD. SINGRAULI".
During the course of her study and has submitted the project report towards partial
fulfilment of the degree of Master of Business Administration from Devi Ahilya
Vishwavidyalay, Indore.

Prof.-AmitPatil
 DECLARATION

I am Ajay Yadav hereby declare that the major research project entitled “A

STUDY ON STRESS MANAGEMENT ON EMPLOYEES WITH

SPECIAL REFERENCE TO NTPC LTD. SINGRAULI" is my own

research work conducted under the guidance of Prof.Amit Patil Department

of Management Studies, Vindhya Institute Of Management And

Research Indore.

Ajay Yadav

.
 ACKNOWLEDGEMENT

would like to express my gratitude and sincere thanks to my project guide

Prof.Amit Patil Department of Management Studies, Vindhya Institute Of

Management And Research Indore for instilling confidence in me to carry out this

research study and extending able guidance and encouragement from time to time

without which it would not have been able to undertake and complete the project.

I would also like to thank our Director Dr. Aasif Javed Siddiqi for their kind
corppration and support.

Ajay Yadav

iv
 ABSTRACT
Advertisers are expected to shift and spend millions in internet advertising in the
coming years than TV, print ads and other 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 effectiveness of internet advertising on consumer
behavior by conducting a case study of University of Nairobi Students. 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 target population was the University of
Nairobi students. The study used stratified sampling technique to select 100 study
respondents. The primary data was collected using questionnaires. Content analysis
was used to analyze qualitative data while the quantitative data was analyzed using
descriptive statistics using SPSS. Regression and Correlation analysis was used to
show the relationships among the variables. 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 to 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. 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 to ensure that the
internet advertising initiatives being implemented suits the targeted markets to
improve product purchases.
 TABLE OF CONTENTS
Declaration.....................................................................................................................ii
Dedication.....................................................................................................................iii
Acknowledgements.......................................................................................................iv
Abstract.......................................................................................................................... v
Table of contents........................................................................................................... vi
List of tables............................................................................................................... viii

CHAPTER ONE: INTRODUCTION........................................................................ 1

Background to the study.......................................................................................... 1
The Concept of Promotion............................................................... 2
The Concept of Internet Advertising................................................3
The Concept of Consumer Behaviour.............................................4
Research Problem.................................................................................................... 5
Research Objectives.................................................................................................6
Value of the Study....................................................................................................7

CHAPTER TWO: LITERATURE REVIEW........................................................... 8

Introduction..............................................................................................................8
Theoretical Foundation of the Study........................................................................8
Internet Advertising............................................................................................... 10
Integrated Marketing Communication...................................................................11
Effectiveness of Internet Advertising.....................................................................12
Consumer Behaviour..............................................................................................13
Internet Advertising and Consumer Behaviour......................................................16

CHAPTER THREE: RESEARCH METHODOLOGY.........................................18

Introduction............................................................................................................18
Research Design.....................................................................................................18
Population of the Study..........................................................................................18
Sample Design....................................................................................................... 18
Data Collection...................................................................................................... 19
 Validity and Reliability.......................................................................................... 19
Data Analysis......................................................................................................... 20

CHAPTER FOUR: DATA ANALYSIS, RESULTS AND DISCUSSION.............21

Introduction............................................................................................................21
Background information........................................................................................ 21
Effectiveness of internet advertising on reach and creation of awareness.............23
Reliability of internet advertising through recall................................................... 25
Relationship between internet advertising and purchase decision.........................27
Inferential statistics................................................................................................ 30
Discussion of findings............................................................................................33

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS

......................................................................................................................................35
Introduction............................................................................................................35
Summary of the Study............................................................................................35
Conclusion............................................................................................................. 35
Recommendations..................................................................................................36
Suggestions for further studies...............................................................................37
REFERENCES.............................................................................................................38
APPENDICES................................................................Error! Bookmark not defined.
APPENDIX I: RESEARCH QUESTIONNAIRE........Error! Bookmark not defined.
 LIST OF TABLES
Table 4.1 Distribution of the respondents by year of study.........................................22
Table 4.2 Distribution of the respondents by age bracket............................................22
Table 4.3 Gender distribution of the respondents........................................................22
Table 4.4 Attitude towards Advertisements.................................................................23
Table 4.5 Time spent on various platforms of advertising...........................................24
Table 4.6 Watching the TV commercials during commercial break............................24
Table 4.7 Change the channel during commercial breaks............................................25
Table 4.8 Checking an online advert............................................................................25
Table 4.9 Ad recall.......................................................................................................27
Table 4.10 Mode of advertising influencing intention to buy product.........................27
Table 4.11 Statements on internet advertising and purchase decision.........................29
Table 4.12 Model Summary.........................................................................................30
Table 4.13 ANOVA of the Regression.........................................................................31
Table 4.14 Coefficient of determination......................................................................31
Table 4.15 Correlation matrix and the coefficient of determination............................32
 CHAPTER ONE
INTRODUCTION
Background to the study
Internet has grown tremendously in both its applications and number of users due to
its unique characteristics of flexibility, interactivity, and personalization. It has been a
very useful tool for communication, entertainment, education, and electronic trade
(Ko et al., 2004; Koyuncu and Lien, 2003). The revolutionary change brought forth
by information technology has an important impact on the daily lives. It has
transformed the way we do business by allowing retailers to offer unlimited range of
products and services to all consumers from around the world at any point in time.
The Internet has emerged as an advertising medium (Silk et al., 2001). Many
companies have turned to the Internet to advertise their products and services; and the
Internet is deemed to be the most significant direct marketing channel for the global
marketplace (Faber et al., 2004; Ko et al., 2004; Korgaonkar and Wolin, 2002).
Companies are pouring billions of dollars into Internet advertising to obtain greater
return on investment on ads (Edwards, 2005; Joines et al.,2003).

The Internet has given consumers more control in accessing information on products
and services. There are several factors that contribute to consumers pull for online
content—consumers are the one who decide when, where, what, and how much
commercial content they wish to view (Korgaonkar and Wolin, 2002). The Internet
enables consumers to access an unlimited range of products and services from
companies around the world, and it has reduced the time and effort they spend on
shopping (Ko et al., 2004).

Consumers play a much more active role in searching for information online with
some goal in mind, and that goal can influence individual behaviors and responses to
online information and advertisements (Smith, 2002). With the rapid advancement in
the computer industry, many companies have made the Internet as part of their
advertising media mix to take advantage of the online technologies (Calisir, 2003).
The Internet has become a popular advertising platform because marketers found that
the Internet possess greater flexibility and control over the advertising materials
(Ducoffe, 1996). Since the Internet can be used as an efficient marketing

1
communication tool, both scholars and practitioners are interested in understanding
how to take full advantage and maximizing the value of this communication medium
(Rodgers and Thorson, 2000).

Consumers within Kenya have been largely exposed to the traditional advertising
forms as the main media used by advertisers to provide information. However, over
the years marketing strategies have evolved with technology leading to the internet
creating unprecedented opportunities for digital marketers to connect with customers
to create an immersive connected digital environment, influence and drive purchases,
fuel new growth and create new market share. The growth of internet advertising is
both globally and locally outpacing offline advertising. While outdoor advertising is
also experiencing growth, it is not growing as rapidly as Internet advertising. It is on
this basis that the study investigated the effectiveness of online advertising based on a
consumer sample from University of Nairobi to determine the relationship between
advertising and consumer behaviour.

The Concept of Promotion

Promotion is the component of a company's marketing system that involves delivery
of messages to target customers that emphasizes the benefits of your brand, products
and services. A few common communication tools such as advertising are used in a
promotional plan. Goals of promotion include building brand awareness, creating
favorable brand attitudes, gaining market share, inducing buying, building loyalty and
growing sales (Kurtz 2010).

To reach its promotional goals, a company develops an effective promotional mix,

which is a combination of strategies including advertising, personal selling, sales
promotion, direct marketing and public relations through a cost effective allocation of
resources (Robinson, 1991). In large companies, the marketing department has many
roles. It determines the promotional mix, establishes the budget, allocates resources,
coordinates the campaign, supervises any outside resources, and measures the results.

Manufacturers often develop a promotional mix for each segment of the distribution
channel. To promote a product to large retailers that sell its products, a manufacturer
might want to use a mix of personal selling, advertising, and buying discounts. This is
known as the push policy. (The manufacturer pushes the product to the retailer.) The
same manufacturer might use a different promotional mix of local and national
advertising, in-store displays, sales promotion, and public relations to reach
consumers. The pull policy directs promotions towards the consumers. It is used to
create customer interest and demand. This study focuses on advertising as one of the
strategies in the promotional mix used by companies within Kenya.

Advertising is the communication relayed from companies to persuade an audience to

purchase their products. This communication is usually through various forms of paid
media -- TV and radio commercials, print ads, billboards and more recently, product
placements, social media and online ads. Ads are placed where advertisers believe
they will reach the largest, most relevant audience. Commercial businesses within
Kenya e.g. Unilever, Safaricom use advertising to drive the consumption of their
product, while non-profit organizations may place ads to raise awareness or
encourage a change in behavior or perception.

The Concept of Internet Advertising

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 include 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.
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 (Ducoffe, 1996). In
Kenya, online advertising has gained increased popularity with more people spending
time online.

The Concept of Consumer Behaviour

The term "consumer behavior" refers to actions and decisions that factor into a
customer's purchase. Researchers, businesses and marketers study consumer behavior
to understand what influences a consumer's shopping preferences and selection of
products and services. Multiple factors affect consumer behavior, among them
economic status, beliefs and values, culture, personality, age and education (Kotler,
2004). Findings on consumer behavior are used to develop methods and products that
will boost company performance and sales.

Customers are becoming more powerful, more knowledgeable and more

sophisticated, and research into modern consumer behaviour is increasingly important
for businesses according. Advertising to attract consumers, providing better
environment, product, services and policies is important in improving today’s
consumer experience to support businesses in retaining customers. This study seeks to
determine and explain the effectiveness of internet advertising in stimulating
consumer response.
The number of internet users in Kenya was estimated at 10.2 million in 2011
according to Communications Commission of Kenya (CCK). This majority of internet
users are youth especially university students, who regularly use the social network
sites through their mobile phones, either searching for information or chatting with
friends online. Many students from the University Nairobi have embraced the
evolution in technology, and adopted latest variety of android products, tablets, ipads,
and the popular models of Samsung galaxy for easy access of the internet. The growth
has been fuelled by the implementation of the ICT policy by the government and the
introduction of the fibre optic network offering fast internet connections.

This study used a sample of these university students from the main campus to
determine and explain the relationship between internet advertising and consumer
behaviour. The students come from a diverse background and were ideal in studying
various characteristics related to consumer behaviour. Students are enrolled in
different study programmes through fulltime and module II, with some operating
from outside the institution while others have residence within the university leading
to variability in exposure to advertising.

Research Problem
Advertisers are expected to shift and spend millions in internet advertising in the
coming years than TV, print ads and other traditional advertising media. Internet
advertising broadly consists of various commercial content formats delivered by
video clip, print, and audio; either solicited or unsolicited and includes company web
sites, corporate logos, e-mail messages, pop-ups, banner ads, skyscraper ads, buttons,
interstitials, hyperlinks, dynamic media, and interactive games (Ducoffe, 1996;
Goldsmith and Lafferty, 2002; Korgaonkar and Wolin, 2002; Wolin and Korganokar,
2003).

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. This has led 70% of the ever users to glue themselves to the Internet
and access it on a regular basis. The problem is that, volumes of consumers are online
everyday for their personal work, but do they notice the ads, banners etc. displayed on
that webpage, most important what is their recall/remembrance value. What about the
reach of online advertising, is it effective across over all target groups?

While a lot of research has been done on advertising, the effectiveness of online
advertising in Kenya is a segment that has been missing from these studies. Research
done by Wanjoga, (2002) mainly focused on consumer attitudes towards online
advertising in Nairobi, and showed that consumers were aware of the online adverts
though with no preference to the advertising forms. It however, failed to quantify and
explain the effectiveness of internet advertising on such consumers. Similar research
done by Wakukha, (2011) on the use of internet advertising by Kenya mobile
telephone industry, explained forms of internet advertising in use, the success and
challenges faced in its use and the level of adoption, but failed to provide information
on its effectiveness in influencing or stimulating consumer response. The findings of a
survey of the attitude of consumers towards retail media advertising by tobacco firms
in Kenya, showed that the consumers are aware and knowledgeable about Retail
Media Advertising tools. The study used a sample of 200 consumers from retail
outlets in Nairobi, which was not a viable sample to determine its effectiveness on all
consumers from Kenya. However, as suggested by Gong and Maddox (2003), “future
research can look into the impact of web advertising across different countries and
cultures to enhance the global understanding of web advertising effectiveness” (p:
46). In addition, more studies are needed to cover various samples in different
countries to increase external validity of the research findings (Calisir, 2003).
To fill these gaps, the current study sought to determine the effectiveness of internet
advertising on consumer behaviour.

Research Objectives
The objectives of the study were to;
i. Determine the effectiveness of internet advertising on reach and creation of
awareness.
ii. Establish the reliability of internet advertising through recall.
iii. Determine the relationship between internet advertising and purchase decision.
 Value of the 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
resourceful in providing viable information to academicians, researchers and
consumers on various concepts related to internet advertising.

CHAPTER TWO
LITERATURE REVIEW
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.
 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 (e.g., Batra and Ray 1986; Holbrook and Batra 1987). 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 (Aaker, Stayman and Hagerty
1986). 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 (Cotte, Coulter and Moore, 2004; Englis 1990; Stout,
Homerand Liu 1990).

These insights notwithstanding, a number of fundamental questions remain

unanswered with respect to ad appeals. Why, for instance, do these appeals induce
such powerful consumer responses in certain cases? What causes them to be more or
less effective on consumers? With specific reference to internet advertising, this study
will attempt to answer these questions.

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
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 on
two 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. Gorn (1982) 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.
 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 new
communication strategies for the Internet as market share is being lost to this more
personalized, interactive form of Internet advertising.

Schlosser et al., (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. Korgaonkar and Wolin (2002) 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
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. For example, ads targeted to heavy web users should
stress the price value relationship of the products, since they engage in more frequent
purchasing and believe that web advertising helps to decrease the prices of products.
Similarly, Ducoffe (1996) found that Internet advertising was perceived to be
informative, entertaining, useful, valuable, and important.

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.

The influence of the Internet on business-to-consumer (B2C) relationships has

introduced a new dimension of interactivity to the communication industry (Shiva,
1997). Along with the introduction of the Internet, advertising as a form of
communication has become more interactive. Traditionally advertising has involved
the reduction of information about a product, service or idea’s core benefits into a 30
second TVC, a full page colour magazine advertisement, or a 15 second radio spot, in
order to persuade the target market to take action (Shiva, 1997). However, while
traditional advertising involves the reduction of information, the Internet enables the
advertiser to provide consumers with detailed information with no time or space
restrictions. Internet-based advertisers do not need to rely on traditional media
channels, and are becoming liberated from these limitations, thus taking advantage of
interactive communication and informing and educating consumers online.

Berthon, Pitt and Watson (1996, p. 53) argue that the WWW represents a “remarkable
new opportunity for advertisers and marketers to communicate with new and existing
markets in a very integrated way.” This is because the Internet, and in particular the
WWW, frees consumers from their traditional ‘passive’ roles as receivers of
marketing communication and gives them greater control over their information
search and acquisition process. As a result, consumers are now becoming interactive
and more active participants in advertising and marketing processes (Hoffman and
Novak, 1996; Hoffman, Novak and Chatterjee, 1997).

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 strategy (Danaher and Mullarkey,
2003; Goldsmith and Lafferty, 2002; Menon and Soman, 2002). Danaher and
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.
Dreze and Hussherr (2003) also examined the effectiveness of ad characteristics on
the ability to recall ad. Animation content, the shape of the banner ad, and frequency
of the ad (repetition) leads to higher advertising recall but not the size of the banner.
In addition, the authors reported that “a banner’s message influences both aided
advertising recall and brand recognition. This indicates that what an ad says is more
important than how it says it” (p: 21). In contrast, Yoon (2003) found that banner
image is more significantly effective than text to assess consumers’ preferences
toward online ads.

In terms of consumer responses in the form of liking online ads, researchers such as
Goldsmith and Lafferty (2002) and Metha (2000) have found that a more favorable
attitude towards ads can lead to a higher ability to recall ads. Goldsmith and Lafferty
(2002) found a significant relationship between positive responses to web sites and
the likelihood of recall the brands advertised on the web. The authors reported that “In
general, research suggests that those consumers who have a positive attitude toward
an ad are more able to recall than those with a negative attitude (p: 320). Metha
(2000) made a similar conclusion but the study was based on print advertising
performance.

Click-through rate is a widely used measure for assessing the effectiveness of banner
advertising, which is the average number of times a viewer clicks on a pop-up ad and
is then exposed to the target web site (Dreze and Hussherr, 2003; Faber, et al., 2004).
As reported by Cho (2003), “the banner advertisement click-through is believed to be
the most common way to draw consumers into a target site and engage them with a
brand or product.

Consumer Behaviour
According to Warner, consumer behaviour is the study of individuals, groups, or
organizations and the processes they use to select, secure, and dispose of products,
services, experiences, or ideas to satisfy needs and the impacts that these processes
have on the consumer and society (Malcolm). Warner emphasized the consumption
related behaviours are often undertaken collectively. For example, some activities
performed by individuals but consumed by a family or group of people, similar as
organization purchasing activities usually followed by group decisions. Beside this
point, the consumer behaviour is not just purchasing, but has usage and disposal the
goods, this type of information always be useful for company to make marketing
decisions (Malcolm). It blends elements from psychology, sociology, social
anthropology and economics, and attempts to understand the decision-making
processes of buyers, both individually and in groups. It studies characteristics of
individual consumers such as demographics and behavioural variables in an attempt
to understand people's wants, and also tries to assess influences on the consumer from
groups such as family, friends, reference groups, and society in general.

This definition clearly brings out that it is not just the buying of goods/services that
receives attention in consumer behaviour but, the process starts much before the
goods have been acquired or bought. A process of buying starts in the minds of the
consumer, which leads to the finding of alternatives between products that can be
acquired with their relative advantages and disadvantages. This leads to internal and
external research. Then follows a process of decision-making for purchase and using
the goods, and then the post purchase behaviour which is also very important, because
it gives a clue to the marketers whether his product has been a success or not
(Malcom).

The black box model shows the interaction of stimuli, consumer characteristics,
decision process and consumer responses. It can be distinguished between
interpersonal stimuli (between people) or intrapersonal stimuli (within people). The
black box model is related to the black box theory of behaviourism, where the focus is
not set on the processes inside a consumer, but the relation between the stimuli and
the response of the consumer. The marketing stimuli are planned and processed by the
companies, whereas the environmental stimulus is given by social factors, based on
the economical, political and cultural circumstances of a society. The buyer’s black
box contains the buyer characteristics and the decision process, which determines the
buyer’s response.

Measuring customer behaviour is a crucial part of any business. Knowing what the
consumer wants and how he acts is vital in terms of product design, and marketing
(Todd, 1997). Assessment of consumer behavior in specific situations, using
observational and physiological methods, is becoming increasingly important in
understanding conscious and unconscious consumer behavior. An increased
understanding of consumer behavior may result in the development of improved
consumer products and in more healthy dietary patterns. A growing number of
techniques is available to assist researchers in measuring various aspects of consumer
behavior such as walking patterns, product selection, meal composition, and
eating/drinking. Due to advances in digital video, sensor technology and computer
speed, complex measurements of behavior and physiology are now possible.
Integration of these techniques allows multimodal measurements. With the growing
number of techniques, the challenge for the researcher to choose the right solution
becomes larger.

There are different ways of measuring consumer behaviour, depending on the interest.
Regularly conducting market research allows businesses to know their customers, and
take them into account when making business decisions. This greatly improves
business performance, and profits.

Common measurements includes, conducting a survey to determine consumer

behaviour. There are two main types of consumer survey: qualitative or quantitative.
Qualitative studies involve asking a few consumers a lot of in-depth questions.
Quantitative studies involve asking lots of consumers a few questions. The latter
would be better for determining the market for a totally new product, since you only
need to find out if people would buy it. If you are amending a product, or making one
similar, a qualitative study would allow you to gain more detailed information.

Similarly, consumer behaviour would be measured by observing consumers going

about their business within permitted stores or shopping malls. By watching
consumers, it is possible to discern a great deal of information about their behaviour.
Information such as optimum height and location of a product and store layout is all
gleaned from observational consumer behaviour measures. Other techniques involve
using raw data to provide a measurement tool. For example, releasing a new product
to the market, and observing if it is bought regularly in conjunction with another
product. If so, then an assumption can be made that it has a similar demographic to
the second product. Using the raw data to determine what time of day, or weather, or
time of year people buy a product gives information on consumer behaviour. Using
separate objective and subjective data obtained from an interview or survey. The
primary data from respondents is used to make objective judgements, which are free
from bias.

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 their
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.

As consumers experience and respond to stimuli around them, emotions arise. Their
reactions manifest themselves as physiological changes they experience as feelings.
Likewise, as people react to stimuli online—for example, to an online advertisement
—they have emotional responses that are directly proportional to their reactions to
these stimuli. On the other hand, when customers repeatedly experience the same
stimuli, they may not cause any emotional response. People become conditioned to
ignore the ever-present ads on Web sites, which is called ad blindness (Wolhandler,
1999).

Advertising and promotion offer a news function to consumers. As Yoo W., Suh K.
and Lee M. (2002) mentioned in their report, personal interactions with other
customers and service providers play a very important role while shopping online.
Viewers of ads learn about new products and services available to them, much like
they learn about events in the news. This information function has a neutral role. It
provides facts without approval or disapproval from consumers. Customer behavior at
this stage encompasses expressions of curiosity. Consumers have a rational response
to advertising when they look at the features of a product or service. This response
focuses on a logical listing of all the functional aspects of the offering. This is an
intellectual response, rather than an emotional one (Lee, 2002).

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 behavior. This repetition serves as a
reminder to the consumer. Behavior 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 behavior splits between loyalty and alienation depending on how well the
product lives up to its advertised benefits (Thorson, 2000). Corporate behavior – 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 e.g.
online purchase decision.
 CHAPTER THREE

RESEARCH METHODOLOGY

Introduction
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.

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.

Population of the Study

University of Nairobi has over 63,000 registered students with 48,000 in
undergraduate and 15,000 in postgraduate as at July 2013 according to the Varsity
Focus Newsletter. This study targeted undergraduate students of the University of
Nairobi because of their background diversity and exposure to advertising with a
larger percentage using the internet. Students of the University of Nairobi are
provided with the Internet access through wireless connection, and therefore, the
chances for them accessing online advertising via social media are very high. On the
same basis of their diverse background, only undergraduate students from the Main
campus were chosen for this study.

Sample Design
Stratified sampling technique was used to select the units for study. 100, module I and
II undergraduate students of the University of Nairobi Main campus was used as a
study sample to represent the population of consumers. This sample was stratified into
each of the four years of study and respondents were randomly selected from each
stratum to come up with the representative sample of 100 for the entire population.
This was a viable sampling technique since it gave the advantages of focusing on
important subpopulations and allowed the use of different sampling technique for
different subpopulations in improving the accuracy of estimation.

Data Collection
The research made use of primary data, which was collected using structured
questionnaire distributed to the 100 respondents sampled from the University of
Nairobi main campus, found outside the library, from classes, within the university
square and within the hostels. The administered questionnaires were collected after
completion by the respondents on the same day and their 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.

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.
 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 analyze 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
was done using SPSS. Regression and Correlation analysis was applied in this study
to reveal relationships among variables in the findings from the data.
 CHAPTER FOUR
DATA ANALYSIS, RESULTS AND DISCUSSION
Introduction
This chapter presents analysis and findings of the study as set out in the research
methodology. The results were presented on the effectiveness of internet advertising
on consumer behaviour: the case of University of Nairobi Students. The study
objectives were; 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 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 and representative and conforms to Mugenda and
Mugenda (2003) stipulation that a response rate of 50% is adequate for analysis and
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.

Background information
The study initially sought to ascertain the general information on the respondents
involved in the study with regards to the year of study, age, and gender. The
demographic information points at the respondents’ suitability in answering the
questions on the effectiveness of internet advertising on consumer behaviour: the case
of University of Nairobi Students.
The respondents were asked to indicate their year of study. The study findings are
illustrated in Table 4.1.
Table 4.1 Distribution of the respondents by year of study
Frequency Percentage
First year 20 20
Second year 29 29
Third year 33 33
Fourth year 18 18
Total 100 100.0

Source: Field data.

As shown in table 4.1, the study sample was representative of all the years of study
with the third year students forming the highest proportion of the sample.
The respondents were also asked to indicate their age bracket. The study findings are
illustrated in Table 4.2.

Table 4.2 Distribution of the respondents by age bracket

Age bracket Frequency Percentage

19-25 years 82 82
26-35 years 18 18
Total 100 100.0

Source: Field data.

The findings indicate that majority of the students at the university of Nairobi were
aged 19-25 years.
The study sought to establish the gender of the respondents and the findings are as
shown in Table 4.3.

Table 4.3 Gender distribution of the respondents

Frequency Percentage
Male 72 72
Female 28 28
Total 100 100.0

Source: Field data.

From Table 4.3, the study recorded a higher response rate from males than females in
their various years of study.
 Effectiveness of internet advertising on reach and creation of
awareness
The first objective of the study was to determine the effectiveness of internet
advertising on reach and creation of awareness. The study sought to establish whether
the respondents were aware of various forms of advertisements adopted by various
companies. Majority of the respondents (98%) attested to being aware of various
forms of advertisements adopted by various companies. This illustrates 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
adopted by various companies in Kenya.

The respondents were asked to indicate their attitude towards advertisements. Table
illustrates the study findings.

Table 4.4 Attitude towards Advertisements

Frequency Percent
Informative 35 35
Creates awareness 31 31
Entertaining 25 25
Irritating 3 3
Annoying 3 3
Waste of time 3 3
Total 100 100

Source: Field data.

As shown in Table 4.4, most of the respondents (35%) indicated that advertising was
informative, with a closer percentage indicating creation of awareness. 3% indicated
that advertising was either irritating, annoying or a waste of time. These findings
mean that most of the respondents had a positive attitude towards advertising as
illustrated by their various perceptions about the use of advertising. This clearly
shows a positive attitude toward advertising and hence is a good indication for
marketers. In order to further identify the effectiveness of internet advertising on
reach and creation of awareness, the respondents were requested to indicate the
amount of time spent on various platforms of advertising. The responses were rated
on a five point Likert scale where: 1=less 1hr, 2=1 - 2hrs, 3=2 - 4hrs, 4=4 - 6hrs while
5=over 6hrs.

Table 4.5 Time spent on various platforms of advertising

Mean Standard deviation
TV, Movies 2.42 1.241
Newspaper, Mags 1.11 1.372
Radio 1.03 0.927
Internet 4.21 0.515

Source: Field data.

According to the findings in Table 4.5, on an average, a person spends more than 4
hours on the internet during his free time which is more than that of TV and movies,
radio and print medium. Hence, on an average the exposure of internet to an
individual is around 40% more than that of other mediums i.e. the reach of medium
internet is much better than that of others.
The study sought to establish whether the respondents watched the TV/ or listened to
Radio commercials during commercial break. The findings are as shown in Table 4.6.

Table 4.6 Watching the TV commercials during commercial break

Frequency Percent
Yes 70 70
No 30 30
Total 100 100

Source: Field data.

According to the findings, the majority of the respondents attested to watching the
TV/ commercials during commercial break. This implies that for television
commercials, around 70% of consumers had a positive perception towards advertising
on TV.
Table 4.7 Change the channel during commercial breaks
Frequency Percent
Never 26 26
sometimes 17 17
depends on ad 33 33
Often 13 13
every time 11 11
Total 100 100

Source: Field data.

Respondents were asked to indicate if they changed channels during commercial and
the results were tabulated. Table 4.7 shows that the degree of attractiveness of the
advert and its relevance to the respondents determined their attention to the advert.
The viewers would see the advertisement if the ad is attractive and appealing. Hence
there is a probability of 0.75 of a consumer viewing the particular advertisement (for
creating awareness and information) on television making it an effective mode of
communication.

Reliability of internet advertising through recall

The second objective of the study was to establish the reliability of internet
advertising through recall. First, the respondents were asked whether they would
check an online advert and the findings presented in the Table 4.9.

Table 4.8 Checking an online advert

Frequency Percent
Yes 21 21
No 79 79
Total 100 100

Source: Field data.

In case of online advertising, majority (79%) of consumers ignored the advert
completely while 21% indicated that they would check an online advert. Further the
study found out that, out of the 21%respondents, 15% said that the intention was not
to see the ads, but they didn’t have any option but to see them as they were Interstitial
Adverts, Pop – up ads or Floating ads. These ads either block the view of the content,
or appear right in the middle of the page, or keeps on floating (moving) around which
is considered to be very irritating for the consumers. Checking the ads determined the
level of interaction with the online ads. Therefore, even though the reach of internet is
much higher than that of other modes, its ability to attract consumers for awareness
creation is very low.

The respondents were further asked to indicate their purpose of using internet. The
study findings are illustrated in Figure 4.1.

Figure 4.1 Internet usage

Source: Field data.

As shown in Figure 4.1, 30% of the respondents used internet for E-mail, 25% for
information, and others for chatting and social networking, indicating that
communications has been the fundamental value of the internet to consumers. There
was a higher chance of interaction with various online ads as reflected by the diverse
usage of internet.
To establish the reliability of internet advertising through recall, the respondents were
asked to indicate whether they would recall the last three TV and online ads.
Table 4.9 Ad recall
Recall
Frequency Percent
TV Yes 84 84
No 16 16
Online ads Yes 30 30
No 70 70
Total 100 100

Source: Field data.

This is for the last three ads that they had seen consciously or unconsciously. In case
of TV ads, 84% remembered their last three ads which is a very good score in terms
of creating awareness. In case of Online ads, only 54% could remember their last
three interaction with the online ads. Therefore, one can easily make out the reliability
of online and TV ads recall values. The study found out that TV ads are much reliable
than internet advertising and other forms of advertising.

Relationship between internet advertising and purchase decision

The third objective of the study was to determine the relationship between internet
advertising and purchase decision. Respondents were asked to indicate the mode
advertising that mostly influenced their decision to purchase a product. The results
were tabulated in Table 4.10.

Table 4.10 Mode of advertising influencing intention to buy product

Frequency Percent
Magazines and newspaper 17 17
Friends and relatives 40 40
TV Commercial 29 29
Online advertisements 6 6
Social Media – Blogs, forums, Social Networking sites 8 8
Total 100 100

Source: Field data.

Based on Table 4.10 above, the highest number of students, 40% of the respondents
were influenced to buy a product based on information provided by friends and
relatives, with TV commercials being second. Online advertisements was least in
influencing their decision at 6%. Therefore, friends and relatives were the major
influencers behind decision making. This depicts that traditional form of advertising
has an edge over internet advertising in terms of consumer preference to mode of
advertising. Traditional mode got over 86% preferences than that of internet
advertising which is a huge margin.

Secondly, the respondents were also asked to indicate whether the internet ads they
came across influenced their purchase decision. 52% of the respondents indicated that
the internet ads they came across never influenced their purchase decision while 48%
posited that the internet ads they came across influenced their purchase decision. This
depicts that the internet advertising influenced purchase decision of the customers to a
moderate extent as only nearly half of the respondents were influenced purchase
decision.

In order to further determine the relationship between internet advertising and

purchase decision, the respondents were requested to indicate their level of agreement
on relevant statements on effects of internet advertising on purchase decision. The
responses were rated on a five point Likert scale where: 5-To a very great extent, 4-
To a great extent, 3-To a moderate extent, 2-To a little extent, and 1-To no extent. The
mean and standard deviations were generated from SPSS and presented in Table 4.11.
Table 4.11 Statements on internet advertising and purchase decision
Statements on Internet advertising and purchase Mean Standard
decision deviation
Internet advertising influences customers’ purchase 4.21 0.513
decision
duration of page viewing is a strong determinant of 4.13 0.746
the ability to recall banner ads
Animation content, the shape of the banner ad, and 3.92 0.841
frequency of the ad (repetition) leads to higher
advertising recall
Companies should aim to strengthen customer 4.11 0.62
interactions with advertisements on the Web
Most companies provide a generic experience to all 4.01 0.738
customers rather than relying on customer analysis to
deliver a personalized experience.
When customers weigh benefits, they become 4.05 0.673
emotionally involved with advertising and
promotion.
Repeated advertising messages affect consumer 3.98 0.847
behavior. This repetition serves as a reminder to the
consumer.

Source: Field data.

The study established that Internet advertising influences customers’ purchase
decision (Mean=4.21) and duration of page viewing is a strong determinant of the
ability to recall banner ads. Other factors as repeated advertising messages affect
consumer behavior. This repetition serves as a reminder to the consumer
(Mean=3.98), and that animation content, the shape of the banner ad, and frequency
of the ad repetition leads to higher advertising recall .This implies that the 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.
 Inferential statistics
In determining the effectiveness of internet advertising on consumer behaviour, the
study conducted a multiple regression analysis to determine the nature of relationship
between the variables.

The regression model specification were as follows

Y=α+β1X1 +ε.
Where;
Y= consumer behaviour
X1= internet advertising
ε= error term
β=coefficient
α= constant

The study further applied multiple regressions to determine the predictive power of
the internet advertising on consumer behaviour. The researcher conducted a multiple
regression analysis so as to test relationship among variable (independent) on the
consumer behaviour. The researcher applied the statistical package for social sciences
(SPSS V 17.0) to code, enter and compute the measurements of the multiple
regressions for the study.

Coefficient of determination explains the extent to which changes in the dependent

variable can be explained by the change in the independent variables or the
percentage of variation in the dependent variable (consumer behaviour) that is
explained by the independent variable (internet advertising).

Table 4.12 Model Summary

Adjusted R Std. Error of
Model R R Square
Square the Estimate
1 0.919 0.845 0.789 0.6273

Source: Field data.

The independent variable that was studied, explain only 84.5% of the consumer
behaviour as represented by the R2. This therefore means that other factors not studied
in this research contribute 15.5% of the consumer behaviour. Therefore, further
research should be conducted to investigate the other factors that affect consumer
behaviour.

Table 4.13 ANOVA of the Regression

Model Sum of df Mean Square F Sig.
Squares
1 Regression 2.534 50 1.267 9.475 .000a
Residual 9.307 200 2.327
Total 11.841 250

Source: Field data.

The significance value is 0.000 which is less than 0.05 thus the model is statistically
significance in predicting how internet advertising affects the consumer behaviour.
The F critical at 5% level of significance was 3.23. Since F calculated is greater than
the F critical (value = 9.475), this shows that the overall model was significant.

Table 4.14 Coefficient of determination

Model Unstandardized Standardized t Sig.
Coefficients Coefficients

B Std. Error Beta

1 (Constant) 1.147 0.2235 5.132 0.000

Internet advertising 0.752 0.1032 0.1032 7.287 .000

Source: Field data.

Multiple regression analysis was conducted as to determine the relationship between
consumer behaviour and the one independent variable (internet advertising). As per
the SPSS generated table , regression equation
(Y=α+β1X1 +ε) becomes:
(Y= 1.147+ 0.752X1+ ε)
According to the regression equation established, taking all factors into account
(internet advertising) constant at zero, consumer behaviour will be 1.147. The data
findings analyzed also shows that taking all other independent variables at zero, a unit
increase in internet advertising will lead to a 0.752 increase in consumer behaviour;
This infers that internet advertising contribute most to the consumer behaviour. At 5%
level of significance and 95% level of confidence, internet advertising was a
significant, factor in predicting the consumer behaviour.

To quantify the strength of the relationship between the variables, the study used Karl
Pearson’s coefficient of correlation. The Pearson product-moment correlation
coefficient (or Pearson correlation coefficient for short) is a measure of the strength of
a linear association between two variables and is denoted by r. The Pearson
correlation coefficient, r, can take a range of values from +1 to -1. A value of 0
indicates that there is no association between the two variables. A value greater than 0
indicates a positive association, that is, as the value of one variable increases so does
the value of the other variable. A value less than 0 indicates a negative association,
that is, as the value of one variable increases the value of the other variable decreases.
The data presented before on internet advertising was computed into single variables
per factor by obtaining the averages of each factor. Pearson’s correlations analysis
was then conducted at 95% confidence interval and 5% confidence level 2-tailed. The
Table 4.15 below indicates the correlation matrix between the internet advertising and
consumer behaviour.

Table 4.15 Correlation matrix and the coefficient of determination

Consumer behaviour Internet advertising
Consumer behaviour (r) 1.000
(p) Sig. (2 tailed)
Internet advertising (r) 0.894 1.000
(p) (2 tailed) 0.018

Source: Field data.

According to the Table 4.15, there is a positive relationship between consumer
behaviour and internet advertising of magnitude 0.894. The positive relationship
indicates that there is a correlation between the consumer behaviour with internet
advertising.
This notwithstanding, all the factors had a significant p-value (p<0.05) at 95%
confidence level. The significance values for relationship between consumer
behaviour and internet advertising was 0.018. This implies that internet advertising
was a significant factor on consumer behaviour.

Discussion of findings
The study established 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 adopted by various companies in Kenya. Most of the
respondents had a positive attitude towards advertising as illustrated by their various
perceptions about the use of advertising. This clearly shows a positive attitude toward
advertising and hence is a good indication for marketers. The findings augment the
findings of Baltas (2003) who indicated that marketing is perceived by the internet
users as a major source of information on available product in the market as reflected
by their positive attitude in the world over. According to Calisir (2003) internet
advertising is an effective channel for marketing as the ad is attractive and appealing
which changes from time to time.

The study established that even though the reach of internet is much higher than that
of other modes, its ability to attract consumers for awareness creation is very low. The
study concludes that the reliability of internet advertising through recall was low as
only a small percentage of the respondents could recall the online ads they had seen..
The study found that TV ads are much reliable than internet advertising and other
forms of advertising. The findings are corroborated with Danaher and Mullarkey
(2003) who posited that TV ads are much reliable than internet advertising.
The study established that friends and relatives were the major influencers behind
decision making. This depicts that traditional form of advertising has an edge over
internet advertising in terms of consumer preference mode of advertising. Traditional
mode got high preferences than that of internet advertising which is a huge margin.
According to Cho (2003) in the developing economies the traditional form of
advertising has a greater market share compared with the internet advertising in terms
of consumer preference mode of advertising.
The study established that internet advertising influenced purchase decision of the
customers to a moderate extent as only nearly half of the respondents were influenced
purchase decision. The study established that internet advertising is a key determinant
of purchase decision of the customers. The study also established that internet
advertising has significant relationship with purchase decision of the consumers. The
findings augment earlier findings of Goldsmith and Lafferty (2002) that internet
advertising is a key determinant of purchase decision by the customers and that
internet advertising has an association with purchase decision of the consumers.
 CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS

Introduction
This chapter presents summary of findings, conclusion and recommendations of the
study in line with the objectives of the study.

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 than
4 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 was 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
Danaher and Mullarkey (2003). 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

Conclusion
The objective of the study was to determine the effectiveness of internet advertising
on consumer behaviour using a sample of University of Nairobi students. After
analysis of the study findings, the study concludes 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 adopted by various
companies in Kenya 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 with Danaher and Mullarkey (2003), that TV ads are much reliable than
internet advertising.

The study concludes that internet 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 to
the consumer behavior 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 a
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.

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, Calisir (2003). 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 their 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 to
ensure that the internet advertising initiatives being implemented suits the targeted
markets to improve product purchases. This is because there exist different contextual
realities between different markets Wolin (2002).

Suggestions for further studies

Since this study explored the effectiveness of internet advertising on consumer
behaviour: the case of University of Nairobi Students, the study recommends that a
similar study should be done in a private university for comparison purposes and to
allow for generalization of findings on the effectiveness of internet advertising on
consumer behaviour. As as suggested by Gong and Maddox (2003), “future research
can look into the impact of web advertising across different countries and cultures to
enhance the global understanding of web advertising effectiveness” (p: 46).
 REFERENCES
Alvin, J. S, Lisa R. K, and Ernst, R. B (2002), Intermedia Substitutability and Market
Demand by National Advertisers, (20:4)
Baltas, G., (2003), Determinants of Internet advertising effectiveness: An empirical
study. International Journal of Market Research, 45: 505-513.
Berthon, P.L., Pitt, F. and Watson, R.T.,(1996), The World Wide Web as an advertising
medium: Toward an understanding of conversion efficiency. Journal of
Advertising Research, 36: 43-54.
Bhat, S., Bevans, M. and Sengupta, S., (2002), Measuring users’ web activity to
evaluate and enhance advertising effectiveness. Journal of Advertising, 31: 97-
106.
Bloch, P.H., Sherrell, D.L. and Ridgway, N.M., (1986), Consumer search: An
extended framework. Journal of Consumer Research, 13: 119-126.
Calisir, F., (2003), Web advertising vs. other media: young consumers’ view. Journal
of Internet Research: Electronic Networking Applications and Policy, 13(5):
356-363.
Cho, C.H., (2003), Factors influencing clicking of banner ads on the WWW.
CyberPsychology & Behavior, 6: 201-215.
Danaher, P.J. and Mullarkey, G.W., (2003), Factors affecting online advertising
recall: A study of students. Journal of Advertising Research, 43: 252-267.
Dreze, X. and Hussherr, F.X., (2003), Internet advertising: Is anybody watching?
Journal of Interactive Marketing, 17: 8-23.
Ducoffe, R.H. (1996), Advertising value and advertising on the web. Journal of
Advertising Research, 36: 21-35.
Edwards, J., (2005), Pharma formulates plans to move marketing from TV.
Brandweek, 46: 5.
Faber, R.J., Lee, M. and Nan, X., (2004), Advertising and the consumer information
environment online. American Behavioral Scientist, 48: 447-466.
Goldsmith, R.E. and Lafferty, B.A., (2002), Consumer response to Web site and their
influence on advertising effectiveness. Journal of Internet Research: Electronic
Networking Applications and Policy, 12: 318-328.
Gong, W. and Maddox, L.M., (2003), Measuring web advertising effectiveness,
Journal of Advertising Research, 43: 34-49.
Kent W., Ian, F., (2010), The Essential Guide to New Media & Digital Marketing
Ko, H., Jung, J.,Kim, J.Y. and Shim, S.W.,( 2004). Cross-cultural differences in
perceived risk of online shopping. Journal of Interactive Advertising.
Kotler, P., (2004), Marketing management, 11th International edition– Prentice-Hall,
pp 706.
Korgaonkar, P. and Wolin, L.D., (2002), Web usage, advertising, and shopping:
relationship patterns. Internet Research: Electronic Networking Applications
and Policy, 12: 191-204.
Koyuncu, C. and Lien, D., (2003), E-commerce and consumer’s purchasing
behaviour. Applied Economics, 35: 721-726.
Kurtz, D., (2010), Contemporary Marketing Mason, OH: South-Western Cengage
Learning.
Lee H., Cho D. and Lee S., (2002), Impact of e-Business initiatives on firm value.
Electronic Commerce Research and Applications, 1: 41-56.
Malcolm Warner, International Encyclopaedia of Business & Management, 2nd
Edition
Menon, S. and Soman, (2002), Managing the power of curiosity for effective web
advertising strategies. Journal of Advertising, 31: 1-14.
Metha, A., (2000), Advertising attitudes and advertising effectiveness. Journal of
Advertising Research, 40: 67-72.
Newman, E.J., Stem Jr . and Sprott, D.E., (2004), Banner advertisement and web site
congruity effects on consumer web site perceptions. Industrial Management &
data Systems, 104: 273-281.
Palanisamy, R., (2004), Impact of gender differences on online consumer
characteristics on web-based banner advertising effectiveness. Journal of
Services Research, 4: 45-74.
Robinson, W., (1991), Promotional Marketing on the web.
Rodgers, S. and Thorson, E., (2000), The interactive advertising model: How users
perceive and process online ads. Journal of Interactive Advertising.
Rowley, J., (2000), Product search in e-shopping: A review and research
propositions. Journal of Consumer Marketing, 17: 20-35.
Schlosser, A.E., Shavitt, S. and Kanfer, A., (1999), Survey of Internet users’ attitudes
towards Internet, Journal of Interactive Marketing, 13: 34-54.
Silk, A.J., Klein, L.R., and Berndt, E.R., (2001), The emerging position of the Internet
as an advertising medium. 3: 129-148.
Smith, S.M., (2002), Electronic commerce issues for consumers and marketers.
Todd P. A., (1997), Consumer reactions to electronic shopping on the
World Wide Web. International Journal of Electronic Commerce, 1 (2): 59-88.
Tom, D. (2008), Principals of Advertising and IMC
Wanjoga, E., (2002), Consumer attitudes towards online advertising in Nairobi,
Research Project Report.
Wakukha, D., (2011), The use of internet advertising by Kenya mobile telephone
industry, Research Project Report.
Wolin, L.D. and Korgaonkar, P., (2003), Web advertising: gender differences in
beliefs, attitudes, and behavior. Journal of Internet Research: Electronic
Networking Applications and Policy, 13: 375-385.
Wolhandler H., (1999), Real numbers behind Net Profits. (6th annual survey of
online commerce).
Yoon, S.J., (2003), An experimental approach to understanding banner advertsing
effectiveness. Journal of Targeting, Measurement and Analysis for
Marketing,11:255-272.
 APPENDICES
APPENDIX I: RESEARCH QUESTIONNAIRE
SECTION A – BACKROUND INFORMATION
1. Year of study?
☐ Year I ☐Year II☐Year III ☐Year IV
☐Other, Specify 2. Age Group (yrs): ☐ up to 18 ☐19
to 25 ☐26 to 40 ☐41 to 55 ☐ 55 +
3. Gender: ☐ Male ☐ Female
4. Programme enrolled in?
☐ Module I ☐Module II
5. Where is your place of residence?
☐ University Hostels
☐Other, specify

SECTION B – ATTITUDES, REACH AND AWARENESS

6. Do you like Advertisements?
☐ Yes ☐ N
o
☐ Informative ☐ Irritating
☐ Entertaining ☐ Annoying
☐ Creates awareness ☐ Waste of time
7. How much time do you spend on?
TV, Movies ☐< 1hr ☐1 - 2hrs ☐ 2 - 4hrs ☐ 4 - 6hrs
☐> 6hrs
Newspaper, Mags ☐< 1hr ☐1 - 2hrs ☐ 2 - 4hrs ☐ 4 - 6hrs
☐> 6hrs
Radio ☐< 1hr ☐1 - 2hrs ☐ 2 - 4hrs ☐ 4 - 6hrs
☐> 6hrs
Internet ☐< 1hr ☐1 - 2hrs ☐ 2 - 4hrs ☐ 4 - 6hrs
☐> 6hrs
8. Do you watch the TV/ or listen to Radio commercials during commercial break?
☐ Yes ☐ No
☐ Informative ☐ Irritating
☐ Entertaining ☐ Annoying
☐ Creates awareness ☐ Waste of
time
9. I change the channel during commercial breaks…

i
☐ Never ☐sometimes ☐depends on ad ☐often
☐every time

ii
SECTION C: AD RECALL
10. Which is the last Newspaper/Magazine ad you remember? Which brand was it?

11. Which is the last TV commercial you remember? Which brand was it?

12. Name any three TV commercials you remember lately

1.
2. 3.
13. Do you see/check online ads/mails when you surf the internet?
☐ Never ☐ sometimes ☐depends on ad ☐ often ☐every time
14. Which is the last online ad you remember? Which brand was it?

15. Name any three online ads you remember lately

1.
2. 3.

SECTION D: INFLUENCERS, PREFERENCE AND PURCHASE DECISION

16. You use the internet for? (Rank them in order of your preference)
☐ Chatting and Social
Networking ☐
☐ Email ☐
☐ Information ☐

☐ Entertainment ☐

☐ E -Commerce ☐

☐ Downloading ☐

17. What mode of advertising influences you to buy any product?

☐Magazines and newspaper
☐Friends and relatives
☐TV Commercial
☐Online advertisements
☐Social Media – Blogs, forums, Social Networking sites
18. Which mode of advertising would you prefer? (Rank in order of preference)
☐ TV Commercials ☐

☐ Print Ads:
Newspaper, Magazines ☐
 ☐ Baners, Posters ☐

☐ Online Ads: Banners,

Emails, ☐
19. Have you made any purchases after seeing internet ads?
☐ Yes ☐ No

20. What is the relationship between internet advertising and purchase decision,
Please tick where appropriate: 5-To a very great extent, 4-To a great extent, 3-To a
moderate extent, 2-To a little extent, and 1-To no extent.

1 2 3 4 5
Statements on Internet advertising To no To a To a To a To a
and purchase decision Extent little moderate great very
extent extent extent great
extent
Internet advertising influences
customers’ purchase decision
duration of page viewing is a strong
determinant of the ability to recall
banner ads
Animation content, the shape of the
banner ad, and frequency of the ad
(repetition) leads to higher advertising
recall
Companies should aim to strengthen
customer interactions with
advertisements on the Web
Most companies provide a generic
experience to all customers rather
than relying on customer analysis to
deliver a personalized experience.
When customers weigh benefits, they
become emotionally involved with
advertising and promotion.
Repeated advertising messages affect
consumer behavior. This repetition
serves as a reminder to the consumer.