EFFECT OF INTERNET ADVERTISING ON CONSUMERS' PURCHASE DECISION

(A STUDY OF JUMIA ONLINE STORES IN LAGOS)

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Advertising has been in existence for many decades. It is one means of promotional mix which has its ultimate function to inform, persuade and promote ideas in order to sell goods and services (Akinkugbe 2006; Kotler, 2009). Advertising, over the years, has grown to become a prominent form of marketing communication, and as a marketing communication tool, it utilizes various forms of mass media to get sales messages across to a large number of people. The traditional mass media for advertising include TV, broadcasting, magazines and newspapers (Belch & Belch, 1998). However, with the increasing development in information technology, the Internet in addition has become another interesting advertising media commonly used nowadays by advertisers and markets to communicate messages to consumers (Ashraf and Mohammed, 2012).

Internet advertising, (also known as online advertising) is the delivery of advertising messages and marketing communications through websites. It can be delivered through various electronic platforms including mobile phones, iPods, desktop computers, and laptops etc. As a marketing communication tools (Esiri, Kolade, Oloyede,  and Ogungbamigbe, 2014) internet advertising takes a multitude of forms, ranging from Search advertising to Banner and Rich Media Adverts (i.e. ads that incorporate sound, animation and interactive digital video commercials).

Regardless of the particular format, displaying advertising content to online users is driven by two major objectives: (a) build new or reinforce existing brands, and (b) stimulate purchases. For that reason, the success (or effectiveness) of internet advertising has been traditionally measured by the number of clicks attracted by the adverts, or the ratio of the number of clicks over the number of impressions. In addition, many advertising experts argue that the mere exposure of online users to the advertising message can be beneficial in terms of building brand awareness (Flores, 2000) and increasing purchase intentions (Hollis, 2005). However, various factors may influence the rate of clicks attracted by online adverts, and it is the burden of this study to examine these factors in Nigerian context and to also find out how they influence purchase attitude and decision of consumers.

1.2 Statement of the Problem

Internet advertising is the delivery of advertising messages and marketing communications through the Websites. It has presented sustainable revenue growth since its inception in the mid-1990s. Internet advertising takes a multitude of forms, ranging from the "traditional" banners to today's rich media ads. Due to its wide success, internet advertising currently constitutes a significant marketing channel for a large number of firms, ranging from news agencies to car manufacturers and retailers, and it is thus gradually gaining attention in the context of communications strategy, planning and implementation.

However, due probably to its infancy in Nigerian media market, there has been relatively little knowledge and empirical research on the factors that affect the success of online advertising in Nigeria. Consequently, when relying on insufficient knowledge to make decisions about their internet marketing strategy, companies run the risk of missing marketing opportunities, lost patronages, decline profits, and damaging image. To this end, this study attempt to make a number of contributions to the body of actionable knowledge pertaining to the factors that may influence success of online advertising campaigns using KJMIA online marketing company as a case study.

1.3     Aim and Objectives of the Study

Generally, the main aim of this study is assess the effect of internet advertising on consumers purchase decision. However it is set to:

       i.            Examine the influence of background characteristics of online users on internet advertising success.

     ii.            Assess the effect of online products advertisement on internet users.

  iii.            Assess the effect of online adverts on consumers’ decision purchase for products.

  iv.            Examine the impact of internet source or medium on consumers decision purchase for advertised products. 

     v.            Assess the influence of demographic, advertisement, website and product characteristics on consumer buying decision.

1.4     Relevant Research Questions

The following questions are relevant to the study

i.                   Do background characteristics of online users have significant influence in internet advertising success?

ii.                 What influence does online products advertisement have on internet users?

iii.              To what extent have online adverts affected consumers’ decision purchase for products? 

iv.              Does the source of online advertised product influence consumer’s decision purchases? 

v.                 Do demographic, advertisement, website and product characteristics have any significant effect on consumer buying decision?

1.5     Research Hypotheses

The following null hypotheses were stated for the study

H01:   There will be significant influence of sex, age , marital status, education and occupation of internet users on internet advertising success

H02:   There will be significant influence of online products advertisement on internet users.

H03:   There will be no significant effect of online adverts on consumers’ decision purchase for products.

H04:   There will be no significant influence of internet source on consumer’s decision purchases.

H05:   There will be significant effect of demographic, advertisement; website and product characteristics on consumer buying decision.

1.6     Significance of the Study

Essentially this study will benefit business organizations and corporate bodies in the e- retail shopping industry as it will elaborate on the factors that may enhance/impede success of online advert. Findings will also enable online shop owners to be aware of those features and product elements that consumers considers very important in their purchasing intention and shopping experience. By extension, this would enable the manufacturers to improve on their products.

It is hoped that through the completion of this investigation, a body of knowledge is added to the marketing communication and promotion area of advertising.

1.7     Scope of the Study

This research is to examine the effects of internet advertising on the consumer buying decision. Investigation was limited to the vicinity of University of Lagos, using all categories of students who are mostly the users of internet facilities either for information, education, social interaction or shopping purposes. The focus of study was however restricted to various online platforms used by JUMIA online shopping mall. It concentrate on finding out if online advertising affords the students the opportunity of getting to know and continuously patronize products advertisedby JUMIA electronic shopping websites.

1.8 Definition of Terms

The following terms were described according to their usage in the study

Advertising: This is a form of communication used to help sell products and services. It is sometimes use to persuade consumers to switch from some popular brand to less known brands.

Advertisement: Communication in the media paid for by identifiable sponsor(s) and directed at a target audience with the aim of impacting information about a product, services, idea or opinion.

Advertiser: A person or organization who pays for the placement of an advert.

Internet Advertising: Internet advertising is the delivery of advertising messages and marketing communications through the company Websites