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Internet Advertising: An Assessment of Consumer Attitudes to Advertising On the Internet

Josephine Previte (Honours Student) and Associate Professor Forrest Griffith University- School of Marketing- Nathan Campus Queensland 4111 Australia Telephone: 617-3875-7642 Fax: 617-3875-7126 Email j.previte@qut.edu.au Email ed4est@orgo.cad.gu.edu.au

ABSTRACT To date, limited empirical research has been undertaken to explore Internet consumers attitudes to the rise of commercialisation and specifically, the increase in advertising on the Internet. This paper investigates consumer attitudes to commercialisation of the Internet, and specifically focuses on Internet users belief and attitudes about Internet advertising. Is there a relationship between Internet consumers attitudes to advertising on the Internet and their online experience with new technology? The major findings from the research identified the existence of relationships between attitudes towards advertising and online experience: Internet users with one year or less experience (newer users) have a less negative attitude to advertising on the Internet than users with four or more years experience (older users). Differences are apparent between new and older users on issues concerning advertisings function and role in providing product information, social role and image of advertising, and like or dislike of Internet advertising. Internet users have strong negative attitudes toward advertising in general and the societal effects of advertising, in particular.

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INTRODUCTION Using a model adapted from the research of Pollay and Mittal (1993) which details the primary structure of beliefs and attitudes about advertising in general, this research focuses on advertising messages delivered in an electronic marketplace. Thus, advertising attitudes have been defined herein as either macro-level societal beliefs about advertising, or micro-level personal beliefs about advertising. These dimensions are defined in the research by the following functions of Internet advertising: product information, social role and image, hedonic and pleasure, and good of advertising for the Internet economy. Internet users overall attitudes to advertising in general are also examined. The Internet originated as a communication channel, evolving from communication needs, where distributed computer networks provided the infrastructure to share information for work, or educational purposes (Kilker & Kleinman 1997). Nevertheless, electronic commerce emerged in the early 1990s, impacting on the previously free channels of communication on the Internet. Current Internet market research is dominated by online demographic research. However, given the increasing commercial push of Internet technologies, there has been limited research published detailing Internet users attitudes to commercial, or business activity. To date, research about the impact of new technology on marketing paradigms lacks a consumer-based perspective. The research undertaken in this study will begin to bridge this gap and investigate how Internet consumers perceive the practice of traditional commercial techniques in electronic media. Hearn, Mandeville and Anthony (1998 in press) argue that the Information Superhighway "will eventually have the potential to be more interactive rather than passive, customised rather than mass, dynamically heterogeneous rather than relatively homogenous, and aesthetically more compelling". It is consumers using new interactive technologies who will offer a new perspective on consumer research, as these new electronic consumers are active not passive consumers of advertising messages. Ducoffe (1996) further argues that "continuing developments in the area of new media technology represent the most important influence on the future of the advertising industry over the next 10 to 15 years". Determining how and why digital consumers use new media will be of central importance to advertisers, marketing practitioners and academics now, and in the future.

Research Rational According to SRI Internationals Business Intelligence Program, "those companies which have adopted a leading role in the operation and expansion of the worlds information infrastructure have been profoundly affected by it" (Internet Research 1996). How customers of these organisations are affected by the adoption of new technology for commercial purposes is of increasing interest to businesses and academicians across the globe. Consumers attitudes regarding the commercialisation of new technology is therefore an area worthy of academic research. Figure 1.1 illustrates several practical and theoretical grounds that justify the research effort. Figure 1.1: Justification for the Research The conceptualisation of Internet marketing and the evolution of a new marketing paradigm for electronic commerce has received academic attention (see specifically the work of Donna Hoffman and Thomas Novak <http://www2000.ogsm.vanderbilt.edu/>). However, the majority of the literature is dominated by a business focus and tends to lack a consumer conceptualisation of the issues of a market oriented
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approach in electronic media. This research therefore, is some of the first consumer based research offering an empirical study on attitudes to advertising in new media.

Research Aims The context of this research is exploratory, as it has investigated topics and issues involving the emergence of advertising in an electronic marketplace. Thus, the purpose of research is to explore Internet users attitudes to rising commercialisation on the previously commercial free channels of the Internet. Specifically, the research focused on Internet users attitudes to Internet advertising. Based on a primary structure of beliefs and attitudes about advertising, originally proposed by Pollay and Mittal (1993), the research has adapted their work to conceptualise Internet consumers attitudes to advertising on the Internet. Thus, the goals of the research were to become familiar with basic facts about Internet consumers and to generate ideas and tentative theories about Internet consumers attitudes towards advertising in an electronic marketplace. This research will therefore contribute a fresh approach to the study of Internet users, as well as providing indicators and guidelines to the advertising industry about new digital consumers empowered by the interactive environment of the Internet.

Hypotheses The research question and hypotheses in this dissertation have evolved from research questions raised by Raj Mehta and Eugene Sivadas in 1994, prior to the explosion of the World Wide Web (WWW). The research findings were published in the Journal of Direct Marketing in the summer 1995, entitled "Direct Marketing on the Internet: An Empirical Assessment of Consumer Attitudes". Mehta and Sivadas research surveyed newsgroups to ascertain attitudes toward advertising and direct marketing on the Internet. Results from their research indicated that respondents react negatively to untargeted cyberjunk, but were more favourable toward targeted marketing communication efforts. The research findings of this dissertation aims to extend Mehta and Sivadas assessment of consumer attitudes, as it will encompass Internet users experiences with the WWW since 1994. During this time the WWW has had a significant impact on commercialising new media technologies (Hoffman & Novak 1996). Thus, the first hypothesis is: H1: Given the commercial free beginnings of the Internet, it is expected that Internet users will have a negative attitude toward the institution of advertising. Examination of consumer attitudes to commercialisation is further explored by encompassing analysis of consumer attitudes to the functionality and benefits of advertising. Key advertising constructs have been replicated from research by Pollay and Mittal (1993) who examined attitudes to advertising in their article "Heres the Beef: Factors, Determinants, and Segments in Consumer Criticism of Advertising" (1993), published by The Journal of Marketing. Based on Pollay and Mittals (1993) primary structure of beliefs and attitudes about advertising, Hypothesis 2 examines attitudes to advertising based on the proposition that Internet users with more online experience will have different attitudes to Internet users who are new arrivals to cyberspace and are therefore accustomed to commercial activity on the Internet. Hypothesis 2 is stated as follows:
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H2: It is expected that Internet users with more online experience will have a negative attitude towards Internet advertising, where as Internet users with less online experience will have a more favourable attitude toward Internet advertising.

Methodology This research partially replicates Pollay and Mittals attitude research, adapting questions to convey information about the Internet as a medium, which delivers an advertising message. A quantitative social survey approach is utilised and questionnaires have been distributed to Internet users electronically and in traditional paper format. A convenience sample of 256 respondents was generated from 147 electronic volunteers and 109 student volunteers from university lectures. The questionnaire was divided into five sections, these are: attitudes to commercialisation and Internet advertising, attitudes to the institution of advertising, attitudes to targeted and untargeted advertising messages, Internet usage measures and demographics. The questionnaire predominantly utilises five point Likert scales to measure attitude responses. Likert scales were employed primarily as they offer advantages of speed, ease of coding for SPSS and administration (Neuman 1994; Tull & Hawkins 1993) and were also used by Pollay and Mittal (1993) in the previous study. For the sections detailing Internet usage profiles, scales where adopted from the previous technology study by Fisher, Margolis & Resnick (1996).

RESULTS Frequency distributions were carried out to summarise the attitude data on Internet advertising. The data are presented under the major dimensions established by Pollay and Mittal (1993) which defined the functions of advertising. In the current research, the functions have been adapted to make reference to the Internet and are defined as: product Information, social role and image, hedonic/ pleasure, good for the Internet economy and global attitudes. The results are presented in Tables 1.1 1.5. Also presented separately are respondents attitudes to advertising in general (see Table 1.6). The measures for respondents attitudes toward advertising were rated on a five point Likert scale ranging from "Strongly Agree to Strongly Disagree". Overall, respondents believed that Internet advertising provides product information. Approximately 69% of respondents learn about products and services from Internet advertising, 48.9% find brands with the features they are looking for through Internet advertising and 59.5% believe that Internet advertising keeps them up to date on product information. Table 1.1 presents the results below. Table 1.1 Product Information Strongly Agree/ Agree
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Strongly Disagree/ Disagree

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Learn about product & service availability Find brands with features up to date product & service availability

68.8

16

48.9 59.8

29.3 25

Overall, the responses to the construct of "social role and image" were very negative. Very few respondents recognised this dimension of advertising, or did not identify with it on a personal level. The majority of respondents did not believe they used Internet advertising to find products which impressed other Internet users (55.1%), nor reflect the sort of person they are (64.5%), nor to provide information about lifestyle and product purchases (48.4%). Table 1.2 Social Role & Image Strongly Agree/ Agree Learn about trends ... impress others What similar others buy on the Internet What reflects me 17.6 19.3 7.8 Strongly Disagree/ Disagree 55.1 48.4 64.5

Approximately 44% of respondents found Internet advertising amusing and entertaining. However, nearly 50% found Internet advertising less enjoyable than other media content on the Internet and only some (35.2%) found it pleasurable on recollection. Table 1.3 illustrates these results. Table 1.3 Hedonic/ Pleasure Strongly Agree/ Agree Amusing/entertaining Better than other media content on the Internet Pleasure in recall
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Strongly Disagree/ Disagree 25.4 49.4

44.2 29.1

35.2

38.3
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Survey respondents in general felt that Internet advertising helped build the Internet economy (62.9%) and 55.1% of respondents believed that Internet advertising promotes competition which benefits consumers. However only 34.4% believe that Internet advertising does waste of Internet resources. These results are illustrated in Table 1.4 Table 1.4 Good for the Internet Economy Strongly Agree/ Agree Helps build Internet economy (not) wasteful of resources Beneficial competition 62.9 34.4 55.1 Strongly Disagree/ Disagree 15.2 46.5 20.7

The overall global attitude toward Internet advertising indicate relatively positive attitudes from respondents. These responses show that Approximately 54.3% of the sample, thought Internet advertising was a "good thing", and 46.9% respondents generally held a favourable attitude toward Internet advertising. Of the sample, 38.2% liked Internet advertising, whereas 33.6% did not. Table 1.5 summaries the findings. Table 1.5 Global Attitudes to Internet Advertising Strongly Agree/ Agree % Advertising on the Internet a good thing Opinion of Advertising on the Internet is unfavourable 54.3 Strongly Disagree/ Disagree % 23.4

33.2

46.9

Strongly Like/ Like Overall, do you like or dislike Internet advertising?

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Strongly Dislike/ Dislike 33.6

38.2

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Attitudes to advertising in General General attitudes to the institution of advertising were mostly negative; these are illustrated in Table 1.6 below. Only 20.4% saw advertising as essential. In general, the majority of respondents believed that advertising did not provide economic benefits. Only 25.7% believed that advertising raised the standard of living, 36.8% believed that advertising led to better products, and 27.3% believed that advertising resulted in lower prices. The majority of respondents believed that advertising in general insults consumers intelligence (42.6%), encourages materialism (46.1) and does not present a true picture of the product (68.4%).

Table 1.6 Institution of Advertising Strongly Agree/ Agree % Economic Overall essential Better Living: Raise standard of living Better products Costs: lower prices Social Falsity/ Not Sense 25.7 36.8 27.3 46.5 41.4 48.4 20.4 61.6 Strongly Disagree/ Disagree %

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True picture of goods Insults consumers intelligence Materialism: should not buy

14.8 42.6 46.1

68.4 32.4 30.9

Hypothesis 1 H1: Given the commercial free beginnings of the Internet, it is expected that Internet users will have a negative attitude toward advertising in general. The results for hypothesis 1 are presented in Table 1.7. Overall, respondents displayed negative attitudes to the institution of advertising, from both a societal and economic perspective. An analysis of the variables, which defined social aspects, suggested that respondents believed that advertising was based on falsity and materialism. Responses to this construct showed a pronounced negative attitude to advertising in general. Therefore, the null hypothesis was rejected as respondents believed that, advertising insults the intelligence of the average consumer (t-value -2.469), does not present a true picture of products and services (t-value -12.840) and encourages consumers to purchase products they should buy (t-value: -2.487). Respondents beliefs about the economic benefit of advertising were also negative and therefore support rejecting the null hypothesis. Analysis suggests that consumers did not believe that advertising raises the standard of living (t-value: -5.069), results in better products for the public (t-value: -1.656), nor lowers the price of products (t-value: -4.828). However, although the results suggested that the respondents have a negative attitude to advertising in general, there was no evidence to suggest that the respondents believe that advertising in general is not an essential (t-value: 7.620) part of business and commerce.

Table 1.7 T-Test Values for Economic and Social Benefit of Advertising Variables No of Cases Mean Value t-value df Significance

Economic Overall: essential Better Living: raises standard of living 256 2.66 -5.069 255 p < 0.05
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255

3.57

7.620

254

p < 0.05

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better products Costs: lowers cost of goods

256 256

2.88 2.66

-1.656 -4.828

255 255

p < 0.05 p < 0.05

Social Falsity/No Sense true picture of goods (does not) insults intelligence Materialism: should not buy 256 2.83 -2.487 255 p < 0.05 256 256 2.28 2.83 -12.840 -2.469 255 255 p < 0.05 p < 0.05

Hypothesis 2 Hypotheses 2 explores the relationship between Internet user's experience online and their attitude to Internet advertising and is stated as follows: H2: It is expected that Internet users with more online experience will have a negative attitude towards Internet advertising, where as Internet users with less online experience will have a more favourable attitude toward Internet advertising. This was proposed as users who have been online for four, or more years would have joined the Internet community prior to the development of the WWW by commercial operators. Newer users, however, who have been online for one year or less, are assumed to be less sensitive to advertising as their experience has been gained whilst commercial practices have become more prevalent. Discriminant Analysis A step-wise discriminant analysis was utilised to explore Hypothesis 2. The main hypothesis and subsequent hypotheses assume that several variables may be good predictors of attitudes to advertising of users with one year or less experience on the Internet (n=65), and those users with four or more years of experience on the Internet (n=43). The analysis "grouped" 67.59% cases correctly. Overall the discriminating power of the model is acceptable at 0.793 and the between group difference accounts for approximately 21% of variance in the following predicting variables:
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Internet advertising is a good way to learn about what products and services are available (-.63026). Internet advertising tells me what people with life styles similar to mine are buying and using (.62268). Overall do you like (dislike) Internet advertising? (.87918) Therefore, the explained variance between more experienced and less experienced Internet users can be defined by: Their beliefs about Internet advertising providing information about products and service availability on the Internet; Their belief about Internet advertisings portrayals of social role and image; And, their overall like or dislike of Internet advertising.

Implications The research has implications for both the advertising industry and advertising theory in general.

Implications for the advertising indus try: There are three distinct benefits to advertising on the Internet: (1) a low overall cost; (2) a large audience reach; and (3) a message delivery combing sight and sound (Maddox & Mehta 1997, p. 47). However, the critical factor for Internet advertising is that digital consumers self-select advertising messages. Therefore, if digital consumers continue to be skeptical about Internet advertising, this may undermine its effectiveness, or even lead to calls for greater regulation. Implications for advertising theory: Ducoffe (1996) argues that what underlies advertising research, is largely unrecognised, and that "a theory of advertising persuasion will remain incomplete if restricted to studying how advertising accomplishes business goals to the exclusion of how it furthers the aims of consumers". In an electronic marketplace where consumers self-select advertising messages, furthering the aims of the consumer will become a central requirement. Digital consumers are no longer passive receivers of the advertiser's message, but will actively select the advertising message or completely disregard it. New theoretical models are emerging to explain the many-to-many communication processes evolving (Hoffman & Novak 1996) from Internet communication. However, theorising and further research needs to extend beyond the process to the structure of attitudes to Internet advertising, as has been proposed by the current research. Conclusion The current literature on Internet advertising and marketing focuses on a supply-side, technologically deterministic approach which overlooks the critical role empowered consumers will play in the future evolution of the marketing communication mix. This exploratory research is some of the first consumer based research offering an empirical study of attitudes to advertising in new media. The research findings will provide both academic and practical benefits to the advertising industry, marketing academics and practitioners by contributing to a better understanding of the emerging digital consumer.
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REFERENCES Ducoffe, R.H. 1996, Advertising Value and Advertising on the Web, in Journal of Advertising Research, September/October, pp.21-35. Fisher, B., Margolis, M. and Resnick, D. 1996, Breaking Ground on the Virtual Frontier: Surveying Civic Life on the Internet, in The American Sociologist , Spring, pp.11-29. Hearn, G., Mandeville, T., & Anthony, D. (in press), Digital Wisdom, Allen & Unwin, Sydney. pp. <http://www2000.ogsm.vanderbilt.edu/>. Hoffman, D.L. & Novak, T.P. 1996a, Marketing in Hypermedia Computer-Mediated Environements: Conceptual Foundations, in Journal of Marketing, vol. 60, July, pp. 50-68. Hoffman, D.L. & Novak, T.P. 1996b, A New Marketing Paradigm for Electronic Commerce, and Hoffman, D.L. Novak, T.P. & Chatterjee, P. 1995, Commercial Scenarios for the Web: Opportunities and Challenges, Project 2000 in Project 2000: Owen Graduate School of Management, Vaderbilt University,. <http://www2000.ogsm.vanderbilt.edu/>. Internet Research (1996), Communication and the Net, in Internet Research: Electronic Networking Applications and Policy, vol. 6, no. 1, pp.29-30. Kilker, J.A. & Kleinman, S.S. 1997, Researching online environments: Lessons from the history of anthropology in The New Jersey Journal of Communication, vol.5, no. 1, pp. 66-83. Mehta, R. & Sivadas, E. 1995, Direct Marketing on the Internet: An Empirical Assessment of Consumer Attitudes, in Journal of Direct Marketing, vol. 9, no.3, pp. 21-32. Neuman, W.L. 1994. Social Research Methods: Qualitative and Quantitative Approaches, 2nd edn, Allyn and Bacon, Boston. ODonohoe, S. 1995, Attitudes to Advertising: A Review of the British and American Research, vol. 13, no. 3, pp. 245-261. Pollay, R.W. & Mittal, B. 1993. Heres the Beef: Factors, Determinants, and Segments in Consumer Criticism of Advertising, in Journal of Marketing, vol. 57, July, pp.98-114. Tull, D. & Hawkins, D. 1993. Marketing Research: Measurement and Method, Macmillan Publishing Company, New York.

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