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(Solved) The Impact of Content and Design Elements on Banner Advertising Ciick-through Rates RITU LOHTIA Georgia State University This study investigates the...


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Zara Ambadar - Pinch & Kesler (2011) “How Aunt Ammy Gets Her Free Lunch"

Summary: This study addressed the following research questions: who are Amazon’s top reviewers, why do they invest the massive effort required to review tens of thousands of products, and how are changes at Amazon changing the way these reviewers help us decide what to buy? The authors surveyed 166 of top-thousand Amazon reviewers. These reviewers were mostly educated people with advanced degrees. They derived a strong sense of identity from their review work, and they worked hard on building their community.

Assessment: The authors took great care in designing and conducting their study. They also took a lot of time carefully inspecting and explaining their findings. They were careful about drawing their conclusions. The qualitative data are used very well for building new theoretical conjectures. This was not the first study on Amazon reviewers. However it's probably the most extensive one examining more issues than any other studies. The authors used deductive reasoning: There is no free lunch (as a universal principle)àPeople do everything (that requires effort) for a rewardàWriting reviews requires effortàTherefore, people must be writing reviews for some sort of reward. The authors also used inductive reasoning: Based on the reviewers' responses, the authors theorized that they had a strong identity about their review work.

Reflection: I learned something new with this study. First of all, I never realized that I could do a research study like this. It made me think that when I design my ad campaign, I should consider whether the clicks are valid or fraudulent. In addition, we could set up an experiment of a real ad versus a fake ad and see if the click-through rate would differ. Can people tell if an ad is real or not?

The Impact of Content and Design Elements
on Banner Advertising Ciick-through Rates RITU LOHTIA Georgia State University This study investigates the impact of content and design elements on the
click-through rates of banner advertisements using data from 8,725 real banner [email protected] advertisements. It is one of the first empirical studies to examine banner advertising
NAVEEN DONTHU Georgia State University
[email protected] effectiveness (measured by click-through rates) and also one of the first to examine
the differences between business-to-business (B2B) and business-to-consumer (B2C)
banner advertisements. EDMUND K.
HERSHBERGER
Southern liiinois
University Content elements examined include the use of incentives and emotional appeals.
Design elements examined include the use of interactivity, color, and animation.
Results suggest that content and design elements do not work the same way for B2B [email protected] and B2C banner advertisements. IN 1994, the now ubiquitous banner advertisement was first introduced. In the eight years since,
the internet advertising industry has exploded.
According to the Interactive Advertising Bureau
(IAB: www.iab.net), internet advertising in 2001
was approximately a $7.2 billion industry in the
United States alone. About 35 percent of that was
accounted for by banner advertisements (Interactive Advertising Bureau, 2002).
Evidence about the effectiveness of this advertising medium has come mainly from industry
reports. Five recent reports conclude that internet
advertisements build brands (i.e., increase advertisement awareness, brand awareness, brand image, or intent to purchase). These studies suggest
that size, use of interactive elements (such as flash
or DHTML), and advertisement position (such as
interstitial) increase branding (Interactive Advertising Bureau, 2002). The authors acknowledge the
financial and data support of
Michael Moore and Marianna
Dizik in the conduct of this
study. Industry beliefs also suggest that creative execution impacts branding. Advertisements that perform best reveal the brand early on. Similarly,
lighter backgrounds, high contrast, and dynamic
messages improve branding. Another study concludes that limiting clutter, using larger brand
logos, and depicting human faces improves brand- 4 1 0 JOORRRL DF RDOERTISIRG REBERRCH December 2 0 0 3 ing. Keeping the message simple and straightforward helps advertising performance (Briggs, 2001b).
This study, based on a large sample of real data
from an online advertising company, comprehensively explores the effectiveness of internet banner advertising. The objectives of this research are
twofold: to define what constitutes an effective
banner advertisement and to analyze if there are
differences in what constitutes effectiveness across
business-to-business (B2B) versus business-toconsumer (B2C) banner advertisements.
While a lot of resources are being spent on
internet banner advertising, there has been little
formal empirical research that provides guidelines for effective banner advertising. Most industry reports are based on market polls or experiments
and have examined the effectiveness of banner
advertisements on branding. Market polls ask respondents for their opinions about banner advertising effectiveness and are qualitative in nature.
In experiments, groups of consumers are shown
an advertisement and their branding scores (or
other dependent measures) are examined before
and after the advertisement is shown. Any changes
in branding scores compared to a control group
are attributed to the banner advertisement (InterDOI: 10.1017/S0021849903030459 CLICK-THROUGH RATES active Advertising Bureau, 2002). Most of
this research, however, has examined the
effectiveness of only a few advertisements (ranging from 1 to 45), and often
advertisements of well-established brands
(Li and Bukovac, 1999). Thus the results
may not be generalizable. Further, subjective inferences are made to determine what
makes certain advertisements more effective (Briggs, 2001b; Briggs, Sullivan, and
Webster, 2001a, 2001b, 2001c). Consumers
need to agree to participate in these research studies, and this can bias the results. In addition, while branding is
important, click-through is the most commonly used measure of success in the
advertising industry. Market polls and experiments often do not measure clickthrough rates (CTRs).
This study overcomes some of the limitations of previous research. It uses a
large sample of real banner advertisements to examine what constitutes the
effectiveness of banner advertisements. We
used 10,000 actual advertisements placed
by an internet advertising company on
different websites for its customers over a
period of time. The click rate used in the
analysis is the actual click rate recorded
by the advertising company for each of
the advertisements. Further, the consumers were not aware that they were involved in an advertising effectiveness
study. Using judges to code the advertisements with respect to their characteristics,
we empirically examine what banner advertising characteristics impact the effectiveness of B2B versus B2C advertisements.
This research makes several contributions to both practice and theory. First, it
is one of the first empirical studies to
examine what constitutes banner advertising effectiveness (measured by CTRs).
Second, it is based on an extremely large
sample of real banner advertisements,
making the results extremely reliable.
Third, it is one of the first to examine . . . people tend to process information differently depending on their level of involvement with the message. the differences between B2B and B2C banner advertisements. Very few studies have
focused on comparing B2B and B2C advertising (Lambert, Morris, and Pitt, 1995).
This research will help B2B and B2C media planners use their online dollars more
effectively.
DEPENDENT VARIABLE: CLICK-THROUGH
RATE(CTR) While there is no industry standard for
measuring the effectiveness of a barmer
advertisement, one specific metric that has
been used extensively is CTR. According
to a recent online advertisement measurement study (PriceWaterHouseCoopers,
2001), a click is a "user-initiated action of
clicking on an ad element, causing a redirect to another web location" (p. 17).
Clicks and advertisement impressions, i.e.,
number of times an advertisement is
served to a user's browser, are the top
two metrics used for advertisement delivery reporting and audience measurement.
CTR is the ratio of number of times an
advertisement is clicked to the number of
advertisement impressions.
The role of advertising context in banner
advertising effectiveness It is well established in the literature that,
depending on certain environmental, personal, or contextual characteristics, people utilize different information processing
approaches (Meyers-Levy and Malaviya,
1999; Petty and Cacioppo, 1986). The primary driver of information processing
strategy is involvement, resulting in what
is known as the dual-process model of
information processing. The basic tenet to
this model, also known as the Elaboration Likelihood Model, is that people tend to
process information differently depending on their level of involvement with the
message. For a high-involvement situation, people tend to use "central route"
processing, meaning that they make a cognitive effort to evaluate statements or attend to claims or other message stimuli. It
has been shown that during central route
processing, nonessential stimuli, such as
colors or sound, are not processed very
heavily. Because these "secondary" elements do not convey any specific information, they merely exist as a background
to the content that is most important,
namely the more cognitive elements of
the advertisement, such as incentives.
On the other hand, in situations of low
involvement, people tend to use "peripheral route" processing, meaning that they
are engaged in more subconscious processing where they simply do not make
an effort to attend to any specific message elements. Affective components take
the lead in this situation, and attitude
change is effected through the use of peripheral cues, such as color, animation,
or music.
To apply this model to this research, we
utilized the context of the banner advertisements (B2B versus B2C) as a moderating variable. It is a common belief that
business purchase decisions are more likely
to be high involvement compared to consumer purchase decisions. Products purchased are often customized, are seldom
impulse purchases, and are usually the result of group decision making. The purchase cycles are also longer, and purchase
scales are considerably larger. Because involvement drives the information process- December 2 0 0 3 JOURRRL OF RDUERTISIRG RESERRCR 4 i i CLICK-THROUGH RATES ing task, we suggest that viewers will volve the viewer at a cognitive or affec- Design elements process banner advertisements differently tive level. Message content is often used To assess the design characteristics of a based upon the advertisement context. B2B to deliver a message making some claim banner advertisement, we selected three advertisements should be more cognitive and utilizing some appeal type. We look criteria: interactivity, color, and anima- in nature, because in high-involvement sit- at two message content characteristics, one tion. While there may be other design uations, people tend to use central route cognitive and one affective. We chose the elements that could be considered, these processing where cognitions are used heav- use of incentives to measure cognitive three seem to be emerging in the industry ily. B2C advertisements should be more af- message elements. It is thought that while as key factors to banner advertising success (Krishnamurthy, 2000). fective in nature, because low-involvement banner advertisements are typically more situations are more conducive to periph- useful for improving brand attitude or As with the content elements, design eral route information processing. recognition, action can be generated if the elements can be used to elicit either a advertisement offers an incentive for ac- cognitive or affective response. Inter- INDEPENDENT VARIABLES: MESSAGE tion (Krishnamurthy, 2000). For example, active elements of a banner advertise- CONTENT AND ADVERTISEMENT DESIGN a banner advertisement could offer a ment attempt to elicit a cognitive response To determine the advertisement character- doUars-off coupon in return for clicking by allowing the viewer to submit searches, istics that may have an impact on CTR in on a banner advertisement. According to enter forms, or simply click to visit the these two contexts, we examined adver- a survey conducted by Greenfield Online advertiser's website. By allowing inter- tising research in traditional media such Inc. (Mullaney, 1999), most web surfers activity, the advertiser is attempting to as print, broadcast, and billboards (Bhar- are looking for incentives to read an ad- increase viewer involvement by creating gava, Donthu, and Caron, 1994; Henssens vertisement before they click to another two-way communication, instead of the and Weitz, 1980; Lohtia, Johnston, and page. For example, 66 percent look for an usual one-way communication that most Aab, 1995; Stewart and Furse, 1986; Wells, advertisement containing a free offer. traditional types of advertising accom- Burnett, and Moriarty, 2000). This re- For the affective message element, we plish. There is evidence that interactivity search suggests that both the content and measured the use of emotional appeals. A of banner advertisements has a substan- design of banner advertisements should popular method of gaining attention and tial impact on CTR (Mand, 1998). How- impact click-through. Within each of these generating action from any type of adver- ever, superfluous interactivity can be types of variables, we selected variables tising is through the use of an emotional distracting and should be avoided (Inter- to represent both cognitive and affective appeal (Holbrook and Batra, 1987). Emo- active Advertising Bureau, 2001). components. Thus, we identified banner tional appeals can take the form of fear. Affective components are intended to advertisement characteristics for each of love, happiness, etc. By eliciting an emo- elicit some type of emotional or feeling re- four groups: cognitive content, affective tional response from an advertisement, sponse, usually invisible to the viewer. Typ- content, cognitive design, and affective we expect greater CTR through increased ical ways that advertisements can be used design (see Table 1). involvement with the advertisement. Re- to elicit affective response are through the search suggests that, in general, consumer use of color and animation. The amount of Content elements advertisements are less factual and more color used in advertising has been shown Content elements include message, ap- emotional in appeal (Lambert, Morris, and to impact advertising effectiveness in tra- peal type, and offers made and can in- Pitt, 1995). ditional media (Gronhaug, Kvitastein, and
Gronmo, 1991). Past research suggests that
there may not be a direct positive relation
between color and effectiveness. Gronhaug, Kvitastein, and Gronmo (1991) found Cognitive and Affective Content and Design Variables
Variables Cognitive Affective Message content Incentives Emotional appeal f^??^^rtisement design Interactivity Color, Animatiori 4 1 2 JOUeOm DF lyERTISinG RESCBRCII December 2 0 0 3 while adding more colors beyond that had
no effect at all. This suggests that there may
be an optimum level of color in an advertisement. Perhaps too much color detracts
^^^^ ^^^ message. According to a survey CLiCK-THROUGH RATES done by Greenfield Online Inc. (MuUaney,
1999), bright colors in web advertising were
of interest to few respondents. However,
Doubleclick, an Internet advertising agency,
recommends the use of bright colors in
banner advertisements (http://www.
doubleclick.com:8080/learning_center/
research_findings/effectiveness.htm).
The final independent variable is animation. The first banner advertisements
were simply static images containing advertising content, much akin to print advertisements. However, new technologies
such as plug-ins, Java script, and streaming media have transformed banners in
remarkable ways (Wells, Burnett, and Moriarty, 2000, p. 277). Many advertisers have
begun to implement loop-animated banners to deliver a progressive and sequential image. It is well known that television
is one of the most intrusive, involving
media forms because of its ability to use
moving images. When banners use animation, they also take on the character of
television advertisements, and this may
suggest that animated banner advertisements will attract more attention and hence
be clicked more (Wegert, 2002). Studies of
side-by-side performance of advertisements for different companies conducted
by ACNielsen suggest that animation increases click rate (Briggs, 2001b).
Based on an experiment, Li and Bukovac (1999) illustrate that animation increases response times and recall of barmer
advertisements. They use distinctiveness
theory to suggest that animated banner
advertisements are distinctive from static
ones and are more likely to attract attention. Li and Bukovac state that banner
advertisements are likely to " . . . create
unique memory traces" (p. 342) and result in better recall.
Looking at our five independent variables (Table 1), incentives and interactivity
deal more directly with central route processing, i.e., both of these variables deal with active, cognitive thought processes. We suggest that B2B advertisements are viewed
more often in high-involvement situations
and hence are processed through more central route processing. The other three independent variables (emotional appeal, color,
and animation) are usually not actively processed and can be considered peripheral
cues. Therefore, emotional appeals, color,
and animation are likely to be used more
in low-involvement situations. We have suggested that B2C advertisements are more
likely to be viewed in low-involvement situations. Based on the above discussion, we
present the following hypotheses:
Hla: When the banner advertising
context is B2B, the relation between incentives and CTR is
stronger than when the banner
advertising context is B2C.
Hlb: When the banner advertising
context is B2B, the relation between interactivity and CTR is
stronger than when the banner
advertising context is B2C. H2a: When the banner advertising
context is B2B, the relation between use of emotional appeals
and CTR is weaker than when
the advertising context is B2C.
H2b: H2c: When the banner advertising
context is B2B, the relation between color level and CTR is
weaker than when the advertising context is B2C.
When the banner advertising
context is B2B, the relation between animation and CTR is
weaker than when the advertising context is B2C. METHODOLOGY The empirical study was conducted at the
individual banner advertisement level. A large online advertising company provided us with 10,000 banner advertisements that were randomly selected out of
an inventory of real world banner advertisements that were online in the previous
months. Five independent judges remotely coded these advertisements. The
judges were marketing doctoral candidates that completed a joint training session where they were familiarized with
the coding scheme. An online coding tool
was developed, and each coder had a
unique password to the website where
the banners could be viewed and coded.
We measured incentives by evaluating
the banner advertisements for the presence or absence of incentives to click. The
literature has conceptualized emotion in
different ways (Batra and Ray, 1986;
Chandy, Tellis, Macinnis, and Thaivanich,
2001), either treating each emotion as a
construct itself or treating all emotions as
a scale from negative through neutral to
positive (Bagozzi and Moore, 1994). In
this research, we followed the latter route.
We assessed banner advertisings' use of
emotional appeals by capturing a range
of positive and negative emotions. Some
advertisements used no emotional appeal
at all. Because less than one percent of the
advertisements used negative emotions,
we defined emotion as a binary variable
to capture the use of emotions or the lack
thereof.
We measured interactivity by evaluating the barmer advertisements for the presence or absence of interactive elements.
To assess the impact of color on the level
of banner advertising effectiveness, we
evaluated the impact of the number of
colors present. Then we collapsed that
scale to low, medium, and high color. We
conceptualized animation to be either
present or not, and we measured it on a
two-point scale.
The judges were instructed to check boxes
for the banner advertisement's appeal, num- December 2 0 0 3 JOURORL OF RDUERTISIRG RESERRCR 4 1 3 CLICK-THROUGH RATES TABLE 2
Mean Usage of Content and Design Elennents in Banner Advertisements
Incentives Interactivity Emotional Appeals Low Color Moderate Color High Color Animation B2B advertisements 35% 36% 55% 4% 42% 53% 29% B2C advertisements 32% 37% 54% 5% 37% 58% 27% ber of colors, inclusion of interactive ele- to be dominating in either type of adver- ment CTR. Hypothesis Hlb suggests that ments, animation, and direct incentives to tisements. The ANOVA (results in Table 3) for B2B advertisements, the relationship click. They also were instructed to code the confirms that for all the relationships the between interactivity and CTR is stronger advertisements' context as either B2B or moderating effect of advertisement con- than for B2C advertisements. This moder- B2C. To ascertain interjudge reliability, all text is significant at the 0.01 level. ating role of advertisement context as il- judges coded a subsample of 100 randomly To support our hypotheses that ad- lustrated in Figure 1(B) is supported by selected advertisements. For all indepen- vertisement context moderates these rela- ANOVA. It appears that interactivity ac- dent variables, we estimated the inter- tionships, we need to see a significant tually lowers CTR; however, in B2C ban-

judge reliability coefficient using Rust and difference in CTR between the interaction ner advertisements, the losses are far less Cooil's (1994) proportional reduction in loss term measures. Consistent with Hypoth- than those for B2B banner advertisements. (PRL) reliability measure, which can be eval- esis Hla, the results show that for B2B The second set of hypotheses dealt with uated using the same criteria as evaluating banner advertisements, the relationship design elements, namely the use of emo- Cronbach's alpha—i.e., 0.70 is acceptable, between incentives and CTR was stronger tional appeals, color, and animation. Hy- 0.90 is desirable. All reliabilities were high than for B2C advertisements. Figure 1 (A) pothesis H2a suggested that the relationship and in the desirable range (mean = 0.94). demonstrates the dramatic impact of ad- between the use of emotional appeals and The actual CTR for each banner adver- vertisement context on this relationship. CTR is stronger for B2C advertisements than tisement was provided by the online It also shows that, while the presence of B2B advertisements. Figure 1(C) shows that advertising firm; however, not all adver- incentives does not influence the CTR of advertisement context plays a substantial tisements had click data. Those advertise- B2C banner advertisements, the presence role in the effect of emotional appeal use. ments without click data were eliminated of incentives hurts B2B banner advertise- For B2B banner advertisements, emotional from the data, leaving a total of 7,421
B2C advertisements and 1,304 B2B advertisements, for a total of 8,725 advertisements. The banner advertisements TABLE 3 included in the sample represented a wide ^ ^ Q ^ ^ f^^ Testing Moderating Effect of Advertisement variety of products and services. Analysis of variance (ANOVA) was used
to test the moderating effect of advertisement context. The results of this analysis ^ontext on the Impact of Content and Design Elements
On U I K
Source F Incentives x advertisement context 11.196* RESULTS Interactivity x advertisement context 33.286* Table 2 shows the usage of the various
elements in B2B and B2C banner adver- Emotionai appeai x advertisement context
^ . , , j Color ievei x advertisement context l.?-689*
r^. ^.^.^
24.642* are discussed in the following section. tisements. It appears that both kinds of
advertisements use all the elements. No Animation x advertisement context specific content or design strategy seems 'Significant at the .01 tevd. 4 1 4 JOURIIHL or eOUERTISlOG RESEHRCH D e c e m b e r 2 0 0 3 7.524* CLICK-THROUGH RATES A. Effect of Incentives on CTR B. Effect of Interactivity on CTR 7% 12% 10% B2B S 4% B2C I 6% i 4% • B2B
B2C f 3%
" 2%
1% No Incentives Used No Interactivity Incentives Used Interactivity Used 0%
D. Effect of Coior Level on CTR C. Effect of Emotional Appeals on CTR
6% 7% 5% 6%
B 4% a 5%
B2B g 3% • B2B I 4%
B2C .c
= 2% O
2% 1% 1% 0%
No Emotional Appeals Low Color Emotional Appeals Moderate Color High Color E. Effect of Animation on CTR 5%
5%
4% S 4% I '* B2B I 3%
i 2% B2C S 2%
1%
1%
Not Animated Animated Figure 1 Interaction Effects appeals decrease CTR; however, for B2C
banner advertisements, there is an increase
in CTR when emotional appeals are used.
According to Hypothesis H2b, color would
have a greater impact on CTR for B2C ad- vertisements than for B2B advertisements.
The results, however, show (see Figure 1 (D)
and Table 3 results) that color has a strong
impact for both B2B and B2C banner advertisements. For both B2B and B2C banner
December advertisements, a medium level of color produces the highest CTR. As hypothesized in
H2c, the interaction effect between context
and animation is significant and is illustrated in Figure 1 (E). We see that animation 2 0 0 3 JOURRRL UF RUUERTISIRG RESERRCR 4 1 5 CLICK-THROUGH RATES lowers CTR in B2B advertisements, but increases CTR in B2C advertisements. It is possible that the presence of incentives and interactivity detracts from the content of B2B advertise- DiSCUSSiON After analyzing the CTRs of a large sample of banner advertisements, the main
conclusions are:
1. Contrary to our expectation, the presence of incentives and interactivity lowered the CTR of banner advertisements.
This was especially true for B2B banner advertisements than B2C banner
advertisements.
2. As expected, the presence of emotion
and animation increased the CTR for
B2C banner advertisements and decreased the CTR for B2B banner
advertisements.
3. Medium level of color was better than
low or high levels of color for B2B and
B2C banner advertisements.
4. B2B banner advertisements had higher
CTR than B2C banner advert...

 


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