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INFLUENCE OF ONLINE ADVERTISING ON THE PURCHASE BEHAVIOUR OF FCT, ABUJA CONSUMERS.

Project topic for Mass Communication department.

CHAPTER ONE

INTRODUCTION 

1.1 Background of the Study 

Online advertising, also called online marketing or Internet advertising or web advertising is a form of marketing and advertising which uses the Internet to deliver promotional marketing messages to consumers Otubo (2010). The internet is an ongoing emerging source that tends to expand more and more and is growing exponentially in both its applications and number of users due to its unique characteristics of flexibility, interactivity, and personalization. Internet as an advertising medium is versatile and this is where it stands apart from the traditional advertising mode. It is a highly flexible mode that allows consumer to make changes during the course of the campaign as and when required without incurring much additional cost. This makes internet all the more important in a country like Nigeria where the business scenario is highly dynamic and changes with each passing day. Online marketing media allows the consumer to make changes as and when required to meet the latest demands of the market.

The number of internet users is on a rapid rise worldwide and the internet is being used by consumers of all age and types. Internet has become one of the major medium for communication, entertainment and is indeed in the process of replacing traditional entertainment, promo products, and informative media's. Likewise, traditional marketing forms such as television, radio, newspaper, magazines, etc., are becoming a thing of the past. Most of the companies and organizations nowadays are relying on digital advertising and marketing techniques to improve their overall sales and revenue. Online marketing has so far proved to be effective and efficient when compared with other forms of advertising and marketing.

It includes email marketing, search engine marketing (SEM), social media marketing, many types of display advertising (including web banner advertising), and mobile advertising. Like other advertising media, online advertising frequently involves both a publisher, who integrates advertisements into its online content, and an advertiser, who provides the advertisements to be displayed on the publisher's content. Other potential participants include advertising agencies who help generate and place the ad copy, an ad server which technologically delivers the ad and tracks statistics, and advertising affiliates who do independent promotional work for the advertiser.

Advertising function is the pivot around which all other functions rotate. Goods and services are not produced for their owner‘s sake, but for the satisfaction of the consumer need. As it is always said that business does not exist in a vacuums it must interact with certain factors, so is advertising.

Internet has grown tremendously in both its applications and number of users due to its unique characteristics of flexibility, interactivity, and personalization. It has been a very useful tool for communication, entertainment, education, and electronic trade. The revolutionary change brought forth by information technology has an important impact on the daily lives. It has transformed the way we do business by allowing retailers to offer unlimited range of products and services to all consumers from around the world at any point in time. The Internet has emerged as an advertising medium (Silk et al., 2001). Many companies have turned to the Internet to advertise their products and services; and the Internet is deemed to be the most significant direct marketing channel for the global marketplace. Companies are pouring billions of dollars into Internet advertising to obtain greater return on investment on ads. The Internet has given consumers more control in accessing information on products and services. There are several factors that contribute to consumers pull for online content—consumers are the one who decide when, where, what, and how much commercial content they wish to view. The Internet enables consumers to access an unlimited range of products and services from companies around the world, and it has reduced the time and effort they spend on shopping.

It has become a major source of information consumption, and to some extent, has replaced old media such as the radio, television and the newspaper. The main advantages of the Internet include its mass availability and its almost instant access to current information. As a result of the public's reaction to these advantages, Madison Avenue realized the potential of the new media and soon incorporated it to its budget. Convinced by the initial web publications of the early '90s, companies soon instilled momentum in the new channel. Today, more than 700 million people use the Internet daily, mostly so in developed countries (USA, China, Japan, Germany and Britain, e.g). The most popular uses of the Internet are searching through data and information, and the purchasing of products and services. In light of these, it is understandable why many companies advertise their products and services online. In addition, advertisers can quickly benefit from changing advertising scripts, from the possibility of better segmenting their market, and from relatively low costs.

Consumers play a much more active role in searching for information online with some goal in mind, and that goal can influence individual behaviours and responses to online information and advertisements (Smith, 2002). With the rapid advancement in the computer industry, many companies have made the Internet as part of their advertising media mix to take advantage of the online technologies. The Internet has become a popular advertising platform because marketers found that the Internet possess greater flexibility and control over the advertising materials. Since the Internet can be used as an efficient marketing to communication tool, both scholars and practitioners are interested in understanding how to take full advantage and maximizing the value of this communication medium Encyclopedia Britannica (1999) gives the following definition of advertising as: Advertising is the techniques and practices used to bring products, services, opinions or causes of notice for the purpose of persuading the public respond in a certain way toward what is advertised‖. Advertising is an essential part of our life and the important source of income for the media. Many people say they don‘t like TV commercials in the middle of the favourite movie, advertising on a radio, billboards and so on. According to

Benson-Eluwa, (2005), Advertising is a form of non-personal method of communicating information which is usually paid for by sponsor through various media‖. These definitions can tell one that advertising is a persuasive communication, because it tries to persuade the reader, viewers or listeners to take to the sponsors‘ point of view and also to take some appropriate actions towards something.

The essence of being in business by any business outfits is to produce the sales and make profits. In order to remain in business, an organization must generate enough sales from its products to cover operating costs and post reasonable profits. For many organizations, sales estimate is the starting point in budgeting or profit planning. It is so because it must be determined. In most cases, before production units could be arrived at, it will turn to material purchases.

The economists believe that advertising is persuasive because they agree that advertising is not interested much in fulfilling that desire of consumers, people taste are changed so that they will buy what has been manufactured.

The criticism in reality is a negation of the concept of consumer sovereignty, which claims that the free market generates the flow of production along the lines that satisfies consumer taste. Here, taste determines what shall be produced; producer sovereignty governs the consumer versus producer sovereignty in the market place.

For us to fully know the meaning of advertising we should also know the various ways advertising can be performed and some of these ways are:

Through media, this can be broadcast media (television and radio) or print media (newspaper, magazine or pamphlets) these are means or channels where information on the product can be disseminated to a scattered audience usually at the same time and successfully. It requires a lot of research before it can be done properly.

It can also be done through displays of the product on a moving vehicle, shops or buildings.

It is usually done in a catching way in order to catch the attention of the people.

Another is through billboards which are a large signpost or boards placed on busy roadsides, creating the awareness of the existing product to all the people passing by.

Traditionally, these are ways to advertise a product with the use of hawking, town crying and calls to the village members with any significant symbol depending on the culture of that place. The Federal Capital Territory is a mega city, which according to the Master Plan, is meant for high class and high flying career civil servants, corporate and professionals as residents. This means Abuja residents are expected to be educated people and by this, should be in tune with global marketing trend. There are many modern markets as well as supermarkets and mall in Abuja where consumers can go for shopping for their needs. Majority still patronize all these markets, but some would rather sit in the comfort of their homes and make online purchase which is convenient and takes the stress of them, as the good will be delivered right to their doorsteps. This is why this study is intended to look at the relationship between online advertising and consumer behaviour in Abuja. 

1.2 Statement of the research problem

Online advertising or internet marketing has become a growing marketing phenomenon for business organisations globally. Online advertising has grown rapidly in the last decade. By 2000 online advertising spending in the United States alone reached $8.2 billion dollars (Hollis 2005). These numbers have increased to $12.7 billion as more people are connected and spend more time online. Additional devices (such as mobile phones and televisions) are able to provide further internet connectivity. Despite the growing trend and convergence of businesses online for marketing purpose, some  researchers believes online advertising concept effect on customer motivation from various perceptive such as happiness, fantasy, awakening, sensuality, and enjoyment on marketing globally. Business used electronic commerce (EC) tools to build marketing strategy, establish customer relationships, and customer purchase behavior because of potential market segmentation.

Moreover, in online advertising, market factors like security, privacy and consumer perceptions are important in affecting consumer‘s decision in the purchase. However, consumers may be dealing with remote salespersons, they have never met and products that cannot be touched and felt. Likewise, consumers tend to be unwilling to conduct businesses based only on the information provided by EC merchants in market because some information may not be reliable. It is against this background that the researcher intends to study the impact of online advertising on consumer behaviour as well as motivation, towards acceptance and purchase of any products or service. This will be studied using some parameters as a measure.

1.3 Objectives of the Study

The objectives of carrying out this study are the following:

To study the impact of online advertising on Consumer Behaviour.

To find out what influenced customer‘s buying decision online

Determine the relationship between internet advertising and consumers buying behaviour

To determine if Consumer buying behavior is affected by the consumer choice of online advertisement

Determine the effectiveness of internet advertising on reach and creation of awareness

1.4 Research Questions

i.      What is the impact of online advertisement on consumer purchase behavior? ii.       What are the factors that influence customer‘s purchase decision online?

iii. What is the relationship between internet advertising and consumers purchase behaviour?

iv. To what extent is Consumer buying behavior affected by the consumer choice of online advertisement?

Which of the mode of advertisement do consumers prefer between online and physical shopping?

Does online advertising concept have effect on consumer motivation?

1.5 Research Hypotheses 

Two hypotheses will be tested in this study. They are stated below.

Hypothesis One:

H0: There is no significant relationship between online advertising and consumer behaviour

H1: There is a significant relationship between online advertising and consumer behaviour

Hypothesis Two:

H0: Consumer buying behavior is not affected by the consumer‘s choice of online advertisement

H1: Consumer buying behavior is affected by the consumer‘s choice of online advertisement

1.6 Significance of the Study 

The study would help the advertisers to understand the extent to which online advertising is beneficial to promoting their businesses. This study will bring facts about how advertiser‘s can use social sites to make their products popular. This study will also be beneficial for research scholars to analyze how consumers perceive the online advertisements and what are their parameters for purchasing products and services from the online sites.  The study will be beneficial for the marketers and web designers to understand the right criteria and the consumers preference for considering the online advertisements and liking them.

1.7 Scope of the Study

The study is aimed at understanding the role of online advertising in consumer behaviour and the change in advertising trend after internet revolution. It will cover Internet buying behaviour analysis and change in characteristics. Therefore, the study is to be conducted in Federal Capital Territory, by administering questionnaire on the identified categories of respondents who are internet savvy and educated: University students, civil servants, corporate staff and the general public. 

1.8 Limitation of the Study 

The study has been confined to Abuja Municipal Area Council, where respondents who have access to internet connection and educated are assumed to be residing and working. Hence the entire findings are limited and refer to urban consumers in Abuja municipal only. Since the geographical coverage is limited to FCT, it is not sure whether the findings will apply to the whole country.

Also, respondents below 18 years of age were not included in the present study, as it was assumed that respondents of the age 18 years & above can answer questions relating to Internet advertising and are assumed to be in the university or working and have access to internet. This is a limitation as respondents below 18 years also use the Internet and if they had been included in the sample, their opinion on issues relating to Internet advertising may have given important insights into the subject. 

The time allocated for the study is short and could have been more in order to cover more geographical locations. 

1.9 Definitions of Concepts

Internet Marketing: is referred to as the marketing (generally promotion) of products or services over the Internet. I Marketing is used as an abbreviated form for Internet Marketing. Internet marketing is considered to be broad in scope because it not only refers to marketing on the Internet, but also includes marketing done via e-mail and wireless media

Search Engine Marketing(SEM): a form of marketing that seeks to promote websites by increasing their visibility in search engine result pages (SERPs) through the use of either paid placement, contextual advertising, and paid inclusion, or through the use of free search engine optimization techniques.

Electronic Commerce (EC): the type of marketing strategy that involves the use of internet for promotion of products by delivering the marketing messages to the larger consumers. It includes delivering ads to internet users via websites, e-mail, ad supported software‘s, text messaging and internet enabled cell phones. 

Email Marketing: Email marketing is directly marketing a commercial message to a group of people using electronic mail email. In its broadest sense, every email sent to a potential or current customer could be considered email marketing. It usually involves using email to send ads, request business, or solicit sales or donations, and any email communication that is meant to build loyalty, trust or brand awareness. Email marketing can be done to either cold lists or current customer database.

Search Engine Optimization (SEO): the process of improving the visibility of a website or a web page in search engines via the "natural" or un-paid ("organic" or "algorithmic") search results

Consumer buying behaviour: The process by which individuals search for, select, purchase, use, and dispose of goods and services, in satisfaction of their needs and wants (Business dictionary, 2016) 


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