EFFECT OF ONLINE ADVERTISING ON CONSUMER BUYING BEHAVIOUR OF INTERNET USERS IN LAGOS STATE PDF

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Ilorin Journal of Human Resource Management (IJHRM) Vol.4, No.1, 2020 EFFECT OF ONLINE ADVERTISING ON CONSUMER BUYING BEHAVIOUR OF INTERNET USERS IN LAGOS STATE Onewo Theophilus Tobi1; Morakinyo Dauda Ayodele2 & Akintan Akinyemi Akindele3 1,2 Department of Business Administration, Osun State Uni...

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EFFECT OF ONLINE ADVERTISING ON CONSUMER BUYING BEHAVIOUR OF INTERNET USERS IN LAGOS STATE Akintan Akindele, theophilus onewo ijhrm

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Ilorin Journal of Human Resource Management (IJHRM) Vol.4, No.1, 2020

EFFECT OF ONLINE ADVERTISING ON CONSUMER BUYING BEHAVIOUR OF INTERNET USERS IN LAGOS STATE Onewo Theophilus Tobi1; Morakinyo Dauda Ayodele2 & Akintan Akinyemi Akindele3 1,2

3

Department of Business Administration, Osun State University, Osogbo, Nigeria. 1 [email protected] [email protected]

Department of Business Administration, Rufus Giwa Polytechnic, Owo, Ondo State, Nigeria.

[email protected] ABSTRACT The era of globalization has demanded a paradigm shift in the area of advertising. Hence, the phenomena the internet has made possible has tremendously changed the advertising landscape as many numbers of companies are turning to the internet to advertise their products and services. The broad objective of the study was to examine the effect of online advertising on consumer buying behaviour among internet users in Ikeja metropolis Lagos State. The specific objectives of the study were to examine the effect of corporate website advertising on purchase decision and to examine the effect of online advertising credibility on the purchase decision. A questionnaire was designed using structured questions to obtain primary data from internet users in Ikeja metropolis, Lagos State. A total of three hundred and eighty-four copies of questionnaire were administered out of which three hundred and eighty-one were adequately filled and returned. The formulated hypotheses were tested using regression analysis. The findings of the study revealed that; Corporate website advertising affects purchase decision R 2 value of 0.65 and p-value of 0.000 < 0.05 level of significance. Online advertising credibility has an effect on purchase decision with R2 value of 0.666 and p-value of 0.001 < 0.05 level of significance. Hence, it was concluded that online advertising has a significant effect on consumer buying behaviour since the majority of the variables were statistically significant with one another. Therefore, it was recommended among others that organizations should improve on their level of utilization of online advertising to trigger positive consumer purchase behaviour. Furthermore, they should launch and advertise more on their corporate websites. Keywords: online advertising, internet, buying behaviour, credibility, corporate website. INTRODUCTION As a means of information, persuasion and promotion, advertising has existed as a promotional mix element since ancient times. Societies used symbols, and pictographic signs to attract their product users, this continued over centuries for the promotion of products. Before the advent of the internet, consumers have been exposed mainly to the traditional mass media for advertising; the traditional advertising media include television, radio broadcasting, newspapers, magazines, billboards etc. However, with the increasing development in information technology, the internet, has become another fascinating advertising media generally used by advertisers to communicate messages to current and prospective consumers (Ashraf & Mohammed, 2012). The internet is growing because of the number of users, and due to its unique characteristics of flexibility, interactivity, and personalization, numerous numbers of companies are now utilizing the internet to advertise their products and services. Online advertising began in 1994 when Hotwired, the digital counterpart to the hip wired magazine, started a web with about a dozen 171

Effect of Online Advertising on Consumer Buying Behaviour of Internet Users

sponsors who paid to have advertising banners embedded throughout the sites. The advent of online advertising enables manufacturers of consumer products to target specific customer segment, gather information, assess sales potential and ensure product exposure across geographic boundaries cost-effectively and profitably to the manufacturers of these products. Advertising through all mediums influence audiences, but the internet does not only influence the individual’s attitude but his behaviour and lifestyle (Latif, Abdul, Saleem, Salman, Abideen & Zain, 2011). The Nigerian internet initiative started with the effort of the Nigerian internet group by late 1994. The only access to the internet during this period was through Nigeria Telecommunications Limited (NITEL) leased acts which were then exorbitant. Therefore pressure was put on NITEL to build the infrastructural mainstay to make this service more accessible and relatively inexpensive to make an effort and awareness drive worthwhile (Usman, 2011). However, the inclination of people towards online advertising in Nigeria is still in its infancy period. The people are somewhat reluctant to buy things online, and this may be because of the perceived risks associated with it. One of the crucial problems of organizations is the knowledge of consumers’ response to various strategies that will be used for achieving organisational goals. Hence, the study of consumer behaviour has become a concern for marketers. The foremost aim of advertising is to influence buying behaviour; however, this influence on brand is strengthened or changed frequently through people’s memories. Memories about the brand are formed by associations that are related to brand name in the consumer mind. These brand cognition influence consideration, evaluation, and finally purchases. (Shadman, 2017). Statement of Problem The internet revolution is phasing out the traditional means of advertising. However, Internet penetration in Nigeria is very low compared to Europe, South East Asia and the United States. Nigeria is a growing economy. Despite the several advantages of online advertising and sales over other forms of commerce, many Nigerians are yet to adopt this technology in their daily buying and selling activities. Some don’t notice the online adverts, and others are ignorant of online purchase and those who are not, visit the websites only to source for information but yet make their purchases traditionally; they are sceptical about making online purchases due to factors like fraud, distrust, privacy risk, data insecurity etc. The question, then, is what should be done by web advertisers, to make Nigerian consumers patronize products and services seen on the internet. It has been observed that some organizations lose patronage and customers because they fail to build a formidable online advertising strategy that could help capture a sizable market share of the industry. Some organizations fail to design an attractive website and find ways to get customers to visit the site, stay around and come back often. These organizations spend little effort in providing adequate information about their products on their corporate website. A useful website is typically designed to collect customers’ feedback and supplement other sales channels as well as sell the company’s product direction. These company’s website does not offer a wide variety of information and other features to answer customer’s questions, build closer customer relationships and to create a sustainable platform for the organization. Even though the existence of several studies in this field, very few studies have considered the effect of online advertising on consumer buying behaviour in a developing country context. Moreover, most studies focused on the effect of online advertising on organisational performance 172

Ilorin Journal of Human Resource Management (IJHRM) Vol.4, No.1, 2020

while few studies draw their conclusions focusing on the customers’ angle. However, due probably to its infancy in the Nigerian media market, there has been relatively little knowledge and empirical research on the effect of online advertising on consumer buying behaviour, more studies need to be done in the different areas of the country to aid generalization. Furthermore, while email advertising, content advertising, search engine advertising and social media advertising strategies have been heavily worked on by researchers, corporate website advertising, and online advertising credibility has sparsely been worked on. Consequently, companies are at risk of lost patronages, missing marketing opportunities, decline profits, and damaging image by relying on insufficient knowledge to make strategic internet marketing decision. The broad objective of the study was to examine the effect of online advertising on consumer buying behaviour. In the quest to achieve the general objective, the following specific objectives were set to: i. ii.

examine the effect of corporate website advertising on the purchase decision. examine the effect of perceived online advertising credibility on the purchase decision.

LITERATURE REVIEW The Concept of Online Advertising Online advertisement is a promotional tool that uses the internet and world wide web to deliver marketing messages to attract customers (Tutaj, 2012). Ha (2017) defines online advertising as deliberate messages placed on third-party web sites, including search engines and directories available through internet access. The author adds that online advertising can be categorized into a variety of functions, including creating awareness, attractiveness and visual image and slogans. Online advertising is a form of promotion that uses the internet and world wide web to deliver marketing messages to attract customers. Example of online advertising includes contextual ads on search engine results pages, banner ads, blogs, rich media ads, particular networking advertising, interstitial ads, online classified advertising, advertising networks and e-mail marketing, including e-mail spam etc. Corporate Website as means of Advertising A corporate website is a website used by organizations to transmit information about their products or services. There is disagreement among marketers whether corporate websites should be considered as an advertising media, but in recent years there has been a growing consensus that it should. A study conducted by Singh and Dalal (1999) showed that companies websites can perform similar functions (to inform and to persuade) as other media network and should therefore legitimately be considered as an advertising medium. Singh and Dalaal (1999) explained that a website advert differs from a traditional advert in essential ways. For instance, it is accessible to the consumer on-demand at any time of the day, and a surfer may as well visit a web site from any place. Furthermore, a website offers a user the ability to interact with the site and to navigate to various pages. A company can as well make tremendous amounts of information available on its website using a combination of media, text, graphics, and video. Moreover, the content of a company’s website can be continually updated. Designing useful advertising messages is a key ingredient in creating an ideal customer. The website must provide the right information content, and it should have a design and outlook that persuades a viewer to explore the site as well as engage in other favourable behaviours such as bookmarking the page and revisiting the site. If the website fails in its informative/persuasive role, the visitor is likely to move on to other attractive sites. 173

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Online Advertising Credibility Credibility is the consumer’s perception towards the credibility, trustworthiness, believability, and convincible of an online advertisement. Salem, Che and Mohamad (2016) perceived advertisement credibility influences customer’s purchase decision. Consumers who use the internet are more concerned about risks to privacy. This is because consumers provide personal information about themselves. This personal information can be accessed by unauthorized users (Dwyer, Hitlz & Passerini, 2007). Perceived privacy risk can be defined as the consumer’s perception of risk when marketers attempt to collect, use or distribute information about consumers and their behaviour (Myerscough, Lowe & Alpert 2006). Customers are faced with the risk of their private information being accessed by unauthorized users because the information can easily be transferred between social media sites. (Rose, 2011). According to Dinev, Hart and Smith (2013), customers perceived privacy risk could be reduced by providing customers with control (over their information) and by increasing their level of trust. Zimmer, Arsal, Al-Marzouq and Grover (2010) established that information relevance directly influences perceived risk. When a consumer perceives the information being collected as relevant, their level of perceived risk is reduced, and therefore they are more willing to give personal information. Marketers using third-party social media channels should ensure that their marketing campaigns don’t encourage any party to involve in practices that would violate the social media company’s privacy policy. At the same time, marketers should also ensure that they are abiding by the policies as well. Furthermore, companies that administer their websites or other social media platforms should maintain comprehensive policies that disclose the company’s data collection, use, and storage practices, and any responsibilities that third parties have regarding privacy and data security (Steinman & Hawkins, 2010). Trustworthiness is consumers’ confidence in the source, which includes the characteristics of honesty, objectivity and good faith. Trust influences online purchaser and enhances the customer’s intention to buy (McCole, Ramsey, & Williams, 2010). Souter and Kerretts-Makau (2012), opines that consumers must have confidence about the product information and reliability of the trading partner. People are now more than ever concerned more with issues surrounding improper use of personal data, identity theft and other security issues like credit card fraud. Trust, which is closely related to security, is a crucial factor in the online buying process. In general, the buyer cannot feel, smell, or touch the product; neither can they look into the salesperson’s eyes (Steinman & Hawkins, 2010). Therefore, these ways of developing trust are excluded on the internet. However, brand trust usually contributes to a reduction of uncertainty. So, it is evident that brand trust can help to overcome some of the internet’s disadvantages, e.g. to overcome perceptions that the internet is an unsafe, dishonest, and unreliable marketplace. Third-party approval is also a tool to generate trust. Consumer Behaviour Pant (2007) defines consumer behaviour as the study of individuals, groups or organizations and the processes they use to select, secure, use and dispose of products, services, experiences or ideas to satisfy needs and the impacts that these processes have on the consumer and society. Consumer behaviour is also defined as the study of how people buy, what they buy when they buy, and why they buy. It refers to the buying process that occurs to anyone willing to buy, from individuals to households, groups or organisations (Kotler & Keller, 2011). Consumers behaviour is influenced by internal and external stimuli. Three of the most common stimuli are 174

Ilorin Journal of Human Resource Management (IJHRM) Vol.4, No.1, 2020

cultural factors, social factors and personal factors. Besides, the consumer’s factors such as perception, motivation, memory and learning comprise an influence on how the consumer responds to the marketing stimuli. (Kotler & Keller, 2007). There are different ways of measuring consumer behaviour; conducting market research regularly allows businesses to know their customers and take them into account when making business decisions. This dramatically improves business performance and profits. Factors influencing consumer behaviour include economic factors, sociological factors and psychological factors. The Consumer Decision Process Kotler and Keller (2007) introduced a five-stage model of the consumer buying process Problem Recognition

Information search

Evaluation of Alternatives

Purchase Decision

PostPurchase behaviour

Source: Marketing Management, Philip Kotler AIDA Model According to Lewis (1987), the role of an advertisement is to attract customers. AIDA is an acronym that stands for Attention, Interest, Desire and Action. Awareness - The consumer becomes aware of a product or brand through advertising. Interest - The consumer becomes interested in learning about brand benefits & how the brand fits with lifestyle. Desire - The consumer develops a favourable disposition towards the brand. Action - The consumer forms a purchase intention, shops around, engages in trial or makes a purchase. An advertising message must capture attention, maintain interest, create desire and finally lead the customer to Action (purchase). AIDA Model was adopted because it explains the effects of advertisement on consumers and the stages, they pass through in choosing a product or brand. The consumer passed through the stages of Attention, Interest, Desire, Action. The effect of advertisement will determine whether consumers will intend to or eventually purchase the product, which will affect the brand loyalty, market share, competitive advantage and continuity of an organization. EMPIRICAL REVIEW Athma and Joseph, (2018) studied the effectiveness of internet advertising on consumer buying behaviour towards mobile phones using internet users; from Vengeri, a town in Kozhikode Municipal Corporation of Kerala as a case study. Fifty copies of questionnaire were administered to collect relevant information for the study. It was found out from the study that male and female are influenced by internet advertising, but females are not more influenced than male. Similarly, the age group and income group are not factoring that determine how much internet advertisement can influence consumer buying behaviour. Ashraf and Alkubise (2012), this study seeks to explore the factors that contribute to the effectiveness of online advertisements and affect consumer purchasing intention from the perspective of developing countries. Based on a five dimensions theoretical model, this study empirically analyzes the effect of online advertisement on purchasing intention using data collected from 339 Jordanian university students. Results show that Income, Internet skills, Internet usage per day, advertisement content and advertisement location are significant factors 175

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that affect the effectiveness of online advertisement. However, two notable findings emerged: first was the key significant role of website language and secondly and maybe most importantly is the impact of other people opinions on the effectiveness of online advertisement. Salem et al., (2016), in his study focussed on the determinants of online advertising and the role of the mediating variable “attitude towards online advertising” in the relationship between perceived advertising value and consumer purchase intent. The results show that online advertising value depends positively on its informativeness, credibility and entertainment value. They also indicate that credibility and online advertising value affect consumers’ attitude towards this type of advertising. Finally, the study shows that attitude plays a mediating role between perceived advertising value and purchase intent. ...