What does advertising in the new millennium look like? - Chapter 8

Internet is a critical platform for advertising. Digital and other forms of interactive advertising has some great advantages over regular advertising. First, communication is more synchronous than is the case in regular advertising. Second, consumers have more control over contact with advertisers and sometimes over web content. Third, the Internet is generally characterized by less social presence than real life. Finally, communication on the Internet is typically more anonymous than in face-to-face settings.

What does online advertising entail?

Goldfarb offers a useful framework for online advertising. He underscores a key difference between online and offline advertising, namely the potential for targeting. The Internet provides the opportunity to identify and reach segments of consumers with specific and shared characteristics (such as shared preferences) and matches the core message of advertising to these characteristics. Because of the technology behind online advertising, this targeting brings lower costs with it than offline advertising. Goldfarb states that there are three forms of targeting:

1. Demographic targeting: Here advertisers use basic demographic data – gender, age group, socio-economic status, lifestyles, values and product and brand use – of websites to tailor the ads so that they are maximally congruent to the target group that visits the website (most basic form).

2. Contextual targeting: Here advertisers try to match their ad with the content of the host website.

3. Behavioural targeting: Here advertisers actively use the log data of individual consumers to base their message on past Internet behaviour by the consumer (most sophisticated form).

Three types of online advertising

Goldfarb divides advertising into three subtypes:

1. Search advertising: the banner ads that accompany search results in search engines, which are shown as a function of specific search words the consumer entered in the search engine. Advertisers most often pay whenever someone clicks on the ad (cost-per-click construction).

2. Classified advertising: the online pendant of classic classified ads also found in magazines and newspapers. They usually appear on websites that don’t feature other media content, such as online jobsites.

3. Display advertising: the online depiction of offers on any kind of website, except for search engines. For example pop-ups, video-ads or advertising on social media.

Research findings have shown that matched and obtrusive ads improve consumer purchase intentions. Surprising is that these two characteristics – matching and obtrusiveness – interacted in a negative way. That is, a matched, obtrusive ad negatively affected these intentions. Possibly consumer respond with reactance because they are aware of the manipulative intent on the part of the advertisers. A specific type of online advertising that possibly evokes such resistant responses more than any other is spam. However, research findings have revealed that while consumers rigorously dislike spam, it sometimes can still be effective in influencing buying behaviour, particularly in older consumers.

How can persuasion be promoted through online advertising?

The fact that advertisers and marketers spend a great amount of money on online advertising suggests that online advertising might appeal to consumers. Not only the impact of spam email, but also the fact that most people regularly engage in online purchasing confirms this.

A critical precursor to online persuasion: online trust

Online trust is the key person variable that directly affects the extent to which someone can be persuaded online to engage in online purchase. Since online transactions work very different from physical transactions, trust is a critical construct. With this in mind, some of the key features of the Internet mentioned earlier – particularly the anonymity and reduced social presence, and possibly also the asynchrony and time leg of Internet communication – work against the establishment of trust.

Building online trust

Schlosser et al. have distinguished between three trust dimensions, namely beliefs about (1) the ability – beliefs about the skills and competencies of a firm, (2) the benevolence – beliefs in a general positive orientation toward the consumer (not just a mere profit making attitude), and (3) the integrity of a company – beliefs that the firm is loyal to moral, professional and legal standards regarding interaction with consumers. Research findings have revealed a professional and has a slick design has the largest impact on trust an ability beliefs, and that ability beliefs directly drive purchase intentions. Security/privacy cues do seem to affect benevolence and integrity beliefs, but this doesn’t seem to influence purchase intentions. These findings suggest that involvement is an important moderator of effects on consumer online persuasion and behaviour, just like it is for consumer offline persuasion and behaviour. Consumers that pursue a specific goal consciously search for information and assess the true merits of an offer.

Online trust and regulatory focus

Other research findings have shown that security related cues do affect consumer risk perception, attitudes and even behavioural intentions. However, this only seems to be the case for consumers with a prevention focus. Higgins developed the Regulatory Focus Theory (RFT), in which he stated that people who have the chronic or acute goal to focus on achieving gains and acquire positive outcomes, have a promotion focus. People that are more motivated by preventing losses and negative outcomes are thought to have a prevention focus. So the ability-related website features could affect consumer online persuasion and behaviour when consumers have a promotion focus, but when consumers have a prevention focus, things might be different. Research findings have supported this theory by showing that benevolence and integrity related safety cues positively affected consumer risk perceptions and increased persuasion, but only among individuals with a prevention focus, and not among those with a promotion focus.

How banner ad placement and content affects online persuasion

Research has shown that banner ad placement plays a role in gaining consumer attention. Pictorial banner ads seem to be most persuasive when they are positioned on the left side of a webpage, whereas textual banner ads seem to be most persuasive when they are right-placed. However, since banner ads often consist of a small surface and are especially characterized by a reduced social presence, they aren’t optimal carriers of information-dense ad messages. One way to overcome this reduces social presence is to make use of the human face – preferably one with an averted gaze – in banner ads.

Conscious vs. unconscious processes in promoting persuasion

Like offline persuasion, online persuasion probably features both conscious, systematic, central processes as more unconscious, heuristic, peripheral processes. The conscious processes are probably more important when consumers are highly involved or have a salient promotion or prevention focus, because high involvement will make a consumer actively browse the web in search of product information and process online advertising in a conscious matter. However, since the Internet is filled with unsolicited commercial messages, it is very likely that unconscious consumer processes also account for a great portion of online persuasive effects, especially given the chronic cognitive load our permanent online connectivity causes. According to the Threated Cognition Theory (TCT), proposed by Salvucci and Taatgen, high levels of cognitive load foster conditions that promote automatic, heuristic processing. TCT states that tasks may require distinct consumer resources (such as vision and working memory), which in spite of all being serial in their operation can operate in parallel. So engaging in multitasking won’t bring any problems and hence no load, as long as the simultaneous tasks involve different resources (for example, chatting with a friend while listening to music). When multitasking does require the same resources this will cause problems. So reading a webpage and at the same time reading an online ad on this same page produces interference, which then produces cognitive load. Since this is the rule rather than the exception, chronic online connectivity may result in a chronic cognitive load, which makes people susceptible to the principle of automaticity (chapter 7) and its tendency for heuristic processing, judgement and decision-making.

Online heuristics

Besides the expertise and beauty heuristic, Internet seems to have its own, unique heuristic, namely the computer=true heuristic, which is characterized by the idea people have that if it comes from a computer it must be true. This heuristic qualifies as an Internet-specific expertise cue and can be used for consumer online persuasion. Two other heuristic principles in the online sphere are liking and social proof (or social validation). Especially social validation appears to play a role in online social influence. The evidence regarding the role of likeability is less clear. Research findings suggest that likeability isn’t effective in fostering compliance in Internet influence settings. This is possibly due to the fact that Internet communication is characterized by a mainly written form with reduced social presence of communication sources. This might counteract the impact of source-related persuasion variables. Another explanation is that not only the construction of online messages, but also their reception and processing is relatively deliberate. The receiver of the message can determine the pace of processing him/herself. This makes the information processing more conscious and deliberate than is the case with externally paced information processing. More research on this subject is needed.

How does persuasion through decision support systems work?

Besides the explicit and blatant persuasion tools discussed earlier in this chapter, there is also a large class of information and persuasion tools – the decision support systems – that are more subtle in nature. These tools use information that is available in a computer-mediated environment to structure, arrange and/or recommend choice alternatives. Decision support systems can both arrange a set of product alternatives in term of predefined attributes (information function), as well as actively suggest the alternative that best fits the costumer’s need (persuasion function). Comparison matrices (information function) and recommendation agents (persuasion function) are two manifestations of such decision support systems. The first allows consumers to compare brands and products and select the one that best fits their need, for example, Google Shopping). The second recommend an alternative based on the consumer’s previous choice, for example the website section saying ‘You might also like’ or ‘Customers who bought this also bought’. Both comparison matrices and recommendation agents have proven to improve decision-making quality, the latter showing a tendency for superior performance. However, under certain conditions recommendations can be seen as obtrusive and may result in feelings of reactance, particularly when consumers already have a prior attitude toward a particular choice option in a set of alternatives and the recommendation is discrepant with this specific attitude. In this case consumers can’t simply follow their own opinion or the recommendation, but they have to resolve the conflict between the two and make a choice. This may eventually result in dissatisfaction regarding whatever decision is made. Research findings have also shown that this effect on feelings of reactance is more noticeable when the recommendation source is considered to be credible and/or expert. The most fascinating consequence research findings have revealed, was on the behavioural level. That is, if a recommendation runs counter to a specific attitude triggers reactance, which then results in an active and hostile drive to restore a sense of freedom of choice, then the recommendation may backfire and consumers in this state may actively resist the recommendation and follow their own gut by choosing the option for which they already had a prior attitude.

Online stereotyping

Searches and offerings become more and more personalized and comparison and recommendation agents will increasingly turn out a constrained set of items. Two potentially disturbing effects of this are: (1) the latitude of any search or recommended result will decrease, and as a consequence (2) consumers will increasingly be exposed to mainly or only those results that match their previous preferences. This may lead to increased stereotyping in judgement and choice and people becoming less open to opinions and preferences other than their own.

What are the effects of being online?

How Google affects consumer memory

Internet can be seen as a transactive memory system, that is, an external reservoir of declarative knowledge that complements our own storage of declarative (and procedural) knowledge in our own memory system. People spend a lot of time searching information via Google or other search engines, particularly when we’re faced with difficult questions. So looking up things in search engines has become relevant to our daily lives. Research findings have shown that search engine names come to mind more easily and as a consequence become more mentally accessible. As a result we almost automatically don’t think for ourselves, but consider the Internet as the prime reservoir for generating knowledge. Other research has revealed that when people don’t think they need to remember something (since they can look up information), they don’t, even when asked to do so. However, when people know information is saved somewhere other than their own mind, they do have improved memory performance for the location where the information is stored. These results suggest that it is very possible that in time our proportion of declarative knowledge will decline, while the proportion of procedural knowledge may increase.

We and our devices

The close connection between people and the online sphere may cause the natural distinction between man and machine to fade. We more and more include these machines and their performances into the self. In support of this notion, research findings have revealed an overlap in the neural representation of one’s hand and one’s own cellphone. On a more psychological level we also tend to ‘own’ knowledge provided by the Internet as if it was our own to begin with.

Implications for advertising: an online ‘truth effect’?

There are several factors that facilitate an online truth effect: (1) the ‘computer=true’ heuristic; (2) the chronic state of cognitive load that typical online behaviour seems to induce; and (3) the access to a transactive memory that is not yet available in our own mind, and so its merits can’t be assessed.

How does persuasion through online interpersonal communication work?

Next to explicit and more subtle online advertising tools, there exists a third class of persuasive and affective messages, namely consumers chatting with each other online about products. Think of blogposts, product review sites and in particular online social networks (OSN) such as Facebook. For most people in Western cultures OSNs have become a part of their daily lives, so much that the online and offline worlds seem to have merged. Looking at Facebook gives the impression that people frequently present themselves and the lives they lead in a better light. So there seems to be a strong tendency for self-enhancement on Facebook. However, research appears to suggest otherwise. Results have suggested that user profiles on Facebook are quite an accurate reflection of someone’s offline self. This could be explained by the factor that people most often become friends offline and only after that online. So if people present themselves in an inaccurate way, most of their friends would immediately notice this discrepancy.
An extension of the ‘beauty/attractiveness-halo’ effect can also be found on OSNs. Research has shown that people are more motivated to become online friends with attractive people. Furthermore, posts on one’s own Facebook page by very attractive people seems to have a positive effect on the perceived attractiveness of the page owner, as compared to posts placed by less or unattractive people.

Company effects of online chatter

Research on the impact of online chatter volume and valence has shown that it is the volume of chatter that has the greatest positive influence on stock performance. Valence seems to have an inconsequential effect on stock performance when reviews are positive, but when negative, reviews do appear to have a negative impact. This impact comes quickly and goes slowly. Research findings have also shown that an increase in regular offline advertising can serve as an effective means of reducing the volume of negative online chatter.

How emotion and online diffusion affect each other

Sometimes content on the web goes ‘viral’, which refers to the spreading of content over the web at an accelerated pace and on a huge (sometimes even global) scale. They role of emotions on online virality seems to be particularly modulated by physiological arousal; high arousal of both positively as well as negatively arousing emotions produces higher virality rates. Less arousing emotions, on the other hand, seem to produce a decrease in virality. Virality depends on active behaviour of recipients of the message: it only gets spread if people are motivated to share the message with others. So achieving online virality would be like winning the lottery for advertisers and marketers. However, since it is very difficult to evoke a high arousing emotional response in a viewer, especially by commercial news or entertainment content, true viral campaigns remain a rarity.

Other research has shown that not only can emotion affect diffusion, but that the opposite is also possible, namely that diffusion can shape online emotions. This evidence comes from a field experiment conducted by Kramer, Guillory and Hancock, who used actual Facebook users as participants. The results show that spreading of emotions in an OSN (in this case Facebook) appears to produce emotional contagion, which refers to people’s tendency to adopt and experience the same emotions as other members within their proximate social group or network.