The Right Format of Internet Advertising (RFIA): A Structural Equation Model

The Right Format of Internet Advertising (RFIA): A Structural Equation Model

Payam Hanafizadeh (Department of Industrial Management, Allameh Tabataba’i University, Tehran, Iran) and Mehdi Behboudi (Department of Business Management, School of Management and Accountancy, Islamic Azad University, Qazvin Branch, Qazvin, Iran)
Copyright: © 2013 |Pages: 23
DOI: 10.4018/irmj.2013040102

Abstract

This study was designed to provide some insights into how Iranian marketers can find the right format of Internet advertising. Recent negative trends in Internet advertising, such as “banner blindness” and extremely low click-through rates, make it imperative to study various factors affecting the right format of Internet advertising. Therefore, this study builds a comprehensive theoretical model explaining how marketers are able to find the right format of Internet advertising. Accordingly, seven latent variables related to the right format of Internet advertising were examined: objective ad features, subjective ad features, product type, user types, ad types, advertising strategy, and ICT condition. It was found that these constructs successfully explain how marketers can find the right format of Internet advertising. Product involvement is found to be the most significant antecedent explaining the right format of Internet advertising.
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Introduction

According to Internetworldstats.com (2012), the number of Iranian Internet users reached almost 37 million at the end of 2011, ranking Iran first in the Middle East and fourth in Asia, which is home to 800 million of the 2 billion users in the world. In this situation, Iran—with one-twentieth the number of Asian users—is considered a very appropriate area for studying the Internet and its application as a channel for the distribution of information. This becomes more important if companies note that advertising through other channels, such as governmental TV, costs more than 500 dollars per second in Iran.

The IAB Internet Advertising Revenue Report for the full year of 2011 revealed the following:

Revenues soared to a landmark high of $31 billion. That milestone represents a 22 percent increase over 2010’s full-year number, which itself had been a record-breaker at $26 billion. … Also unveils that fourth quarter revenues for 2011 hit a best-ever at $9 billion, marking a 15 percent increase over the third quarter 2011, which came in at $7.8 billion, and a 20 percent growth year-over-year in comparison to 2010’s $7.4 billion. (Iab.net, 2012)

As these statistics indicate, the four major types of Internet advertising are (1) display ads (21%) including banners, hypertexts, and skyscrapers; (2) rich media (7%) including pop-up, pop-under, and interstitial ads; (3) sent emails (2%); and (4) digital video (3%). Despite the valuable studies that have been conducted on Internet advertising (e.g., Cho & Cheon, 2004; Hanafizadeh, Behboudi, Ahadi, & Ghaderi Varkani, 2012; Kelly, 2010; Ko, Chang, & Roberts, 2005; Rodgers & Thorson, 2000), insights into the effectiveness of the various formats of Internet advertisements and appropriate users of each format remain limited. For example, in their book, Hanafizadeh and Behboudi (2012) introduced 18 formats of Internet advertising and attempted to find appropriate ways of publishing each format. This issue and insufficient knowledge of the advertisers about online advertising strategies add more complexity to online advertising campaign. Having this in mind, it is useless to recommend that an advertiser use “the right format” (Heinz, 2004) when he or she does not have an idea about right format (Burns & Lutz, 2006). On the other hand, Iranian companies as new adopters of Internet advertising (Hanafizadeh et al., 2012) need to evaluate the benefits of various formats in selecting the best formats of Internet advertising for their needs. Hence, the present study is designed to provide some insights for those companies by gathering first-hand information to answer the following questions:

  • 1.

    How can Iranian marketers find the right format of Internet advertising?

  • 2.

    Different products need to have different ad formats; how this can be done?

  • 3.

    Which variables affect marketers’ decisions in advertising a certain product on the Internet?

Literature Review

Internet advertising is an Internet-based process by which advertisers communicate, interact with and persuade online users in order to position a brand; it allows a company to promote both consumer awareness and preference in a customized and personalized way and to decrease the time needed to make a buying decision. (Hanafizadeh & Behboudi, 2012, p. 22)

Since Hot Wired published the first advertisement on the web in 1994, many studies have been conducted to examine consumer attitude toward online advertising (Edwards, Li & Lee, 2002; Prendergast & Huang, 2003; Sheehan & Gleason, 2001; Yang, 2004), yet many gaps remain that need to be scrutinized. Here, a brief review on what have been done so far has been provided.

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