The Internet has replaced traditional methods of carrying out the business long ago. People started using it as a primary source of information, which is why it became an integral part of their marketing activities (Alonzo 2006).
Internet and interactive media are now especially frequently used in e-commerce: “Consumers can now research, compare products, make purchases from their home or workplace and obtain far more information more efficiently than they could before” (Gratton 2003, p. 2).
Therefore, there is absolutely no wonder that the Internet and interactive media are now used as a new advertising tool. A number of researchers agree in the idea that the greatest benefit of the use of the Internet and interactive media as an advertising tool is that they are extremely cost-efficient, while other researchers state that their greatest value is in improving customer interaction and communication; the findings of these researchers have to be compared and contrasted in order to discover the real value of the Internet and interactive media as advertising tools.
The value of the Internet and interactive media for advertising has long been underestimated. This is why their use as advertising tools is quite a new phenomenon (Crew and Kleindorfer 2009).
The Internet began to be actively used as an advertising tool closer to the end of the 20th century: “In 1997 $900 million was spent on Internet advertising and, whilst current revenues are small by comparison with more traditional media (such as television and radio), its growth is outpacing them” (Morgan and Pritchard 2000, p. 308).
With every year, these numbers were growing since Internet advertising was getting more and more popular. Mohr, Sengupta, and Slater (2005, p. 320) mention that “advertising spending on the Web declined steadily from 2000 to 2002.
In 2003, the Internet’s share of advertising spending was expected to remain flat at 2.5 percent with a total value of $6.3 million.” This shows how much the investments into Internet advertising have increased since 1997; besides, these numbers have grown significantly in 2008, just like it was expected (Mohr et al. 2005). At present, the Internet and interactive media are one of the most popular means of advertising.
Types of Internet advertising and interactive media are numerous. One of the most widespread types is banner ads. This type of Internet advertisements is easy to ignore in case the consumer does not need it. Banners are quite effective, though not always: “In a study of 2000 companies that do Internet advertising, only 20 percent expressed satisfaction with the results from banner ads” (Mohr et al. 2005, p. 320).
An impact on the consumers is made by means of the creativity of the banners’ designers. The main advantage of the banners is that they are not expensive; at this, however, they allow reaching a great number of customers. Mohr et al. (2005, p. 320) assert that “banner ads, like traditional advertising, are better at long-term brand building rather than generating short-term sales.”
Interactive media allows making banners especially attractive. Recently, there have emerged live banners that allow presenting rich media ads and interstitial ads that are extremely colorful; they can talk, move, and are accompanied by sounds or music. Apart from these, there also exist pop-ups, e-mail marketing, ad networks, and other types of Internet advertising.
The issue of the effectiveness of Internet advertising is rather controversial. On the one hand, it seems effective because it increases communication between the consumer and the advertiser. The customers can participate in different poles or in product quality improvement.
This all makes a particular company and the products it manufactures attractive for the consumers, thus contributing to increasing the regular consumer base, customer loyalty, and brand recognition. On the other hand, however, interactive advertising is mostly aimed at a specific layer of the population.
For example, banners can be viewed only by people who have regular access to the Internet (as a rule, those are people aged 14-55, those who either use the Internet for studies or those who use it for work). The rest of the age groups are easier to access through the traditional advertising tools (radio, television, newspapers).
Another issue that Internet advertising raises is cost-efficiency. Just like any other advertising, the interactive one requires certain expenses to be done. Since the banners (that are, perhaps, the cheapest Internet advertisements) are not always effective, more expensive types of advertising have to be used. The cost-efficiency of these types is what most of the researchers argue about.
There are some studies that disprove the value of advertising with the help of the Internet and interactive media. Thus, for instance, the American Marketing Association (2000) argues that a number of companies refuse to practice Internet advertising because they consider the use of Web technologies too expensive.
This becomes one of the main problems that the companies face when making decisions regarding the use of interactive advertising. Nevertheless, a number of researchers hold the opposite view. Ferrel and Hartline (2007, p. 288) assert that “online advertising provides an opportunity to reach highly specialized markets at a relatively low cost.”
The cost being the reason, as the authors continue, approximately $8 billion is spent annually for interactive advertising. Pavlou and Stewart (2000) also support this idea; the researchers argue that interactive advertising is beneficial in terms of costs not only for the advertisers who spent less money for advertising but for the consumers who, through interactive advertising, get a possibility to make purchases online and save costs on the transportation of the purchased items.
The effectiveness of the use of the Internet and interactive media as advertising tools is also often questioned by the researchers. While Sweeny (2001) states that the effectiveness of the Internet advertising cannot always be guaranteed, Ormeno (2007), as well as Robinson, Wysocka, and Hand (2007) believe that Internet advertising is one of the most effective ways to reach customers and to promote the company’s products.
Robinson et al. (2007) have discovered that the effectiveness of interactive advertising is indisputable; moreover, it depends on the size and attractiveness of the banners in the first place. Ormeno (2007), in his turn, agrees with this idea.
The author states that interactive advertising not only allows attracting a larger amount of customers but “is useful for building brand recognition and for triggering behavioral responses from the target audience, precisely the objectives pursued with issue communication” (Ormeno 2007, p. 280).
The greatest value of the interactive advertising, as these authors conclude, is that it promotes communication between the consumers and advertisers and, sometimes, even between the consumers and the manufacturers themselves. In addition, it contributes to the promotion of products and increases customer satisfaction. This allows the researchers to conclude that it is quite effective to use the Internet and interactive media as advertising tools.
Thus, the studies researching the issue under consideration can be grouped according to two main findings. The first group considers the cost efficiency of Internet advertising. The opinions of the researchers with regards to this problem differ.
Some state that Internet advertising is relatively cheap, while others believe that most of the companies do not use it because the cost is high, while the profits obtained are not. Another group explores the issue closely connected with this one, the effectiveness of Internet advertising.
The findings within this group also differ with some researchers denying the effectiveness of Internet advertising and the others trying to prove that it is effective not only for the advertisers but for the consumers as well. So, there is no unity of opinion regarding the cost efficiency and effectiveness of Internet advertising.
Therefore, the literature reviewed on this topic shows that the researchers’ ideas regarding the effectiveness and cost-efficiency of Internet advertising differ.
This is possibly connected with the fact that the Internet and interactive media started to be used as tools for advertising only recently, and their value and effectiveness have not yet been measured.
However, since the number of researchers who argue for the effectiveness and cost-efficiency of Internet advertising is prevailing, it can be stated that with time, the real value of Internet advertising will be recognized.
Alonzo, R 2006, The Upstart Guide to Owning and Managing a Bar Or Tavern, Kaplan Publishing, New York.
American Marketing Association 2000, Marketing theory and applications, Routledge, London and New York.
Crew, MA and Kleindorfer, PR 2009, Progress in the competitive agenda in the postal and delivery sector, Edward Elgar Publishing, Northampton.
Ferrel, OC and Hartline, MD 2007, Marketing strategy, Cengage Learning, London.
Gratton, E 2003, Internet and wireless privacy: a legal guide to global business practices, CCH Canadian Limited, Ontario.
Mohr, JJ, Sengupta, S and Slater, SF 2005, Marketing of high-technology products and innovations, Pearson Education, New Jersey.
Morgan, N and Pritchard, A 2000, Advertising in tourism and leisure, Butterworth-Heinemann, Oxford.
Ormeno, MO 2007, Managing corporate brands: A new approach to corporate communication, Springer, London.
Pavlou, PA and Stewart, DW 2000, ‘Measuring the effects and effectiveness of interactive advertising: A research agenda,’ Journal of Interactive Advertising, vol.2, no. 1, pp. 62-78.
Sweeney, S 2001, 101 internet businesses you can start from home: How to choose and build your own successful e-business, Maximum Press, Ontario.