1. 1 Ravi Vatrapu vatrapu@itu.dk Theories of Internet Advertising Micu, A. (2007). Theoretical Approaches in Internet Advertising Research. Chapter 03 of Internet Advertising. Course Portal: http://www.itu.dk/~rkva/2011-Spring-EB22http://www.itu.dk/~rkva/2011-Spring-EB22 Facebook: http://www.facebook.com/group.php?gid=133258548012http://www.facebook.com/group.php?gid=133258548012 Etherpad: http://ietherpad.com/7y3drhMCnqhttp://ietherpad.com/7y3drhMCnq Thursday, 17-Feb-2011 EB22: Online Marketing: Lecture 08 Auditorium 4, ITU, Copenhagen, Denmark

2. Survey of Theories  65 studies reviewed  25 theoretical approaches identified Four categories 1.Attitudes towards Online Advertising 2.Specific Factors (Website and Consumer) 3.Measures & Terminology 4.Related Aspects 2

3. 1. Attitudes towards Online Advertising 1.1 Consumer Attitudes 1.1.1 Hierarchy-of-Effects Approach  Cognition  Affect  Behavior 1.2 Advertiser Attitudes 1.2.1 Integrated Marketing Communications Approach 1.2.2 Diffusion of Innovation 3

4. 2. Specific Factors in Online Advertising Influence of: 2.1 Actual Website and Ad Characteristics 2.2 Consumer Characteristics 2.3 Interactivity and Website Personality 4

5. 2. Specific Factors in Online Advertising-1 2.1 Actual Website and Ad Characteristics 2.1.1 Distinctiveness & Attribution 2.1.2 Elaboration Likelihood Model (ELM) 2.1.3 Intrusiveness and Annoyance 2.1.4 Learning Theory 2.1.5 Habituation-Tedium Theory 5

6. 2. Specific Factors in Online Advertising-2 2.2 Consumer Characteristics 2.2.1 Hierarchy-of-effects 2.2.2 Attribution Theory 2.2.3 Theory of Buyer Behavior 2.2.4 Uses and Gratifications 2.2.5 Media Dependency Theory 2.2.6 Knowledge Gap Theory 6

7. 2. Specific Factors in Online Advertising-3 2.3 Interactivity and Website Personality 2.3.1 Schema Theory and the Concept of Flow 2.3.2 Uses and Gratifications 2.3.3 Social Learning Theory 2.3.4 Elaboration Likelihood Model 2.3.5 Expectancy Theory 2.3.6 Theory of Personality and Congruity Theory 2.3.7 Vividness, Telepresence, and the Virtual Experience 2.3.8 Perceived Interactivity and Attitude Toward the Website 7

8. 3. Measures and Terminology ad impression: Each time someone views an advertisement online. ad networks: A company that sells ad inventory in aggregated packages to advertisers. One example of an ad network for blogs is called BlogAds.BlogAds banner ad: Graphical advertisement on a web page that allows people to click through to a special advertiser's site. behavorial ads: Advertising that's served up according to a person's recent online web surfing, matching their interest even if they are not currently on a relevant site. clickthrough rates (CTR): The percentage of times that a person seeing an ad online clicks on the ad. cost per action (CPA): A type of ad in which the advertiser only pays the publisher for each time someone completes a transaction, whether that's registering for a site or buying a product. cost per thousand (CPM): The rate it costs for the ad to reach a certain number of viewers online. So a site with a $10 CPM would charge $100 for every 10,000 viewers reached. pay-per-click (PPC): An ad in which the advertiser only pays for each click made by viewers, with the price set by bidding against other advertisers online. opt-in marketing: Ads or commercial emails sent with the prior approval of recipients. rich media ads: Display ads online that use animation, flashy graphics, audio or video to pop off the page for viewers. spam: Commercial email messages sent without the recipient's approval. http://www.pbs.org/mediashift/2007/06/your-guide-to-online-advertising178.html 8

9. 4. Related Aspects 4.1 Context Communication Theory 4.2 Category Management 9

10. Discussion Exercise 06 (in-class)  http://www.doubleclick.com/insight/pdfs/dclk_2008be nchmarks_0906.pdf http://www.doubleclick.com/insight/pdfs/dclk_2008be nchmarks_0906.pdf 10