Chapter 10: Effectiveness Solutions in Online Advertising

Payam Hanafizadeh and Mehdi Behboudi

1 EFFECTIVENESS CRITERIA Lavidge and Steiner (1961) introduced the hierarchy of effects or CAB (Cognitive, Affection, and Behavior).

2 EFFECTIVENESS CRITERIA Researchers believed that setting goals and measuring advertisement effectiveness should be done with all three criteria of CAB rather than using one or two of them because customers have complete emotional responses to promotional efforts based on a combination of cognitive, affective and psychological responses (Kershel, 1984).

3 Criteria and Control Ownership The completing variable in CAB hierarchy is interaction, which was a minor consideration in previous studies because there were no interactive tools for communicating between advertisers and customers like there are today. One of the critical subjects in interaction and effectiveness criteria is control ownership.

4 Criteria and Control Ownership To describe and distinguish the control between user and advertiser, Pavlou and Stewart (2000) conducted a study introduced two distinctive aspects of control:  Process control  Result control

5 Criteria and Control Ownership Leckenby (2004) showed a classified measuring model of CAB and control ownership aspects. Their model states that users with low efficiency in searching are less interactive; this is a cognitive function.

6 MANAGING ADVERTISING CAMPAIGNS Double Click (2006) has an appropriate fourth step procedure by which marketers can improve their advertising campaigns. That framework includes:  Setting explicit goals  Segmenting the users  Optimizing the media  Revising, evaluating and improving

7 Strategic Website and Its Role How can we control frequency to get the maximum reach?  The first method is to position a frequency primer in a publisher’s or advertiser’s server so that cookies prevent the over-displaying of the advertising to previous users.  The second method is the most efficient way to control frequency. In this method, the advertisement is positioned in a strategic website.

8 MANAGING GEO-TARGETING Organizations which operate locally, and whose products or services are available in regional or domestic markets, use geo-targeting. These advertisers should also pay attention to their non-targeted markets as their non- targeted advertisements may be seen by international users.

9 TRACING VIEW THROUGH EFFECT The click-through rate is a new advertising paradigm in which a company’s potential and active users are able to respond directly to online advertising and obtain immediate information.

10 However, the main objective of advertising campaigns is not to increase the click-through rate ! This type of advertising is developed in order to influence the target market’s attitude toward the brand and to create a buying intention. TRACING VIEW THROUGH EFFECT

11 TRACING VIEW THROUGH EFFECT When the advertising objective is to attract and push the user to the website, clicking is secondary; the users who are exposed to the advertisement and do not click on it may visit the website later to satisfy their needs. This is called the view-through effect.

12 TRACING VIEW THROUGH EFFECT Studies show that half of customer visits from marketers’ websites are affected by advertising view-through effects rather than direct clicks or click- through rates (Double Click, 2006).

13 CREATING CURIOSITY A knowledge gap is defined as the difference between two quantities: the information someone knows, and the information someone would like to know.

14 CREATING CURIOSITY Curiosity flourishes when people are aware of the knowledge gap in special fields or are faced with inconsistent, unclear and incompatible stimuli or that which reverses their expectations. These situations magnify their knowledge deficiency (Menon & Soman, 2001).

15 CREATING CURIOSITY The initial challenge in advertisement effectiveness is to make sure that the advertising not only draws the attention of target customers, but also creates a sense of interest in the advantages of the products (Aker, Batra, & Myers, 1992).

16 CREATING CURIOSITY To increase advertisement effectiveness, Menon and Somen (2001) conducted a study in which advertising strategies based on curiosity were introduced in four elements:  Creating curiosity by making a gap in current knowledge.  Creating a clue to redirect the existing involvement toward clarifying the curiosity.  Enough time to overcome the curiosity and build confidence that there are solutions for puzzling out the curiosity.  Evaluating customer involvement and learning in order to measure advertisement effectiveness.

17 USING LARGE FORMATS When advertising is aimed at getting a direct response from customers and also is focused on brand awareness, large formats are preferred.

18 EFFECTIVENESS OF DIFFERENT FORMATS According to IAB (2007), percentages of revenue for each eight methods of online advertisement formats are as follows:  Banners 21%  Searches 42%  Lead Generation 7%  Classified Ads 14%  Sponsorships 3%  Digital Videos 2%  s 2%, and  Rich Media or Animated Advertisements 9%

19 BANNER EFFECTIVENESS IAB (1996) determined eight standard sizes for banners and increased these to 14 standard sizes in In improving the effectiveness of this kind of format, the main focus was on direct response or the click-through rate.

20 BANNER EFFECTIVENESS Recognizing the reduction in the banner click-through rate, researchers looked for new ways to both increase the click- rate and make it more effective. After that, the attitudes toward advertisement effectiveness changed, and clicking on a banner did not indicate online advertising effectiveness.

21 BANNER EFFECTIVENESS It was proven that a banner can increase brand awareness and cognition perception because when users are online, and especially when surfing at the website, they are exposed to the brand’s advertising which causes a change in the user’s attitude toward the brand (Briggs & Hollis, 1997). Thus, two factors in advertising seem crucial in order for marketers to reach the above-mentioned outcomes:  Physical features  Right placement in website get-results/

22 Sponsorship Effectiveness One feature which plays an important role is the degree of alignment between the brand and the host website’s content. The extent to which the advertisers’ brands are published on websites that have similar content or the same business model is an indicator of how successful they will be.

23 USING RICH MEDIA Rich Media usually has an advanced flash format which has the possibility of zooming beyond standard size and attaching to all web pages. They also may have or be attached by video clips. The large, image-based Rich Media also usually have a higher click-through rate than standard image-based advertisements.

24 Digital Video Effectiveness Digital video methods have been transferred from TV to the Internet with one big difference: the span of control has been divided between customer and advertiser (Dynamic Logic, 2007).

25 Digital Video Effectiveness There are two ways for conveying a brand scenario in a video advertisement. First concerns the display sequence of an advertisement, and the second is exaggerating in advertising.

26 Digital Video Effectiveness According to studies, video advertisements are the most applicable formats for encouraging users to become interested in and purchase a brand (Double Click, 2006).