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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 numerous 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 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 properly filled and returned. The formulated hypotheses were tested using
regression analysis. The findings of the study revealed that; Corporate website advertising
affects purchase decision R2 value of 0.65 and p-value of 0.000 < 0.05 level of significance.
Online advertising credibility has effect on purchase decision with R 2 value of 0.666 and p-
value of 0.001 < 0.05 level of significance. Hence, it was concluded that online advertising
has significance effect on consumer buying behaviour since 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 a
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 promotion of products. Prior to
the advent of the internet, consumers have been largely exposed 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 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 in a cost-effective and profitable manner to the
manufacturers of these products. Advertising through all medium 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 the 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, 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 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, 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.
An effective website is typically designed to collect customers’ feedback and supplement
other sales channels as well as sell the company’s product directly. These company’s website
does not offer a rich variety of information and other features to answer customer’s questions,
build closer customer relationships and to create a sustainable platform for the organization.
Despite the existence of several researches in this field, very few studies have considered the
effect of online advertisement on consumer buying behaviour in a developing country
context. Moreover, most studies focused on effect of online advertising on organisational
performance while few studies draw their conclusions focusing on the customers’ angle.
However, due probably to its infancy in 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.
Literature Review
The Concept of Online Advertising
Online advertisement is a promotional tool that uses 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
worldwide web to deliver marketing messages to attract customers. Example of online
advertising include contextual ads on search engine results pages, banner ads, blogs, rich
media ads, special 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
important ways. For instance, it is accessible to the consumer on demand at anytime 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 effective 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
favorable behaviors such as bookmarking the page and revisiting the site. If the website fails
in it informative / persuasive role, the visitor is likely to move on to other attractive sites.
According to Dinev, Hart and Smith (2013) customers perceived privacy risk can 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 doesn’t encourage any party to involve in
practices that would violate the social media company’s privacy policy while 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 discloses 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
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 obvious 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. A 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 cultural factors, social factors and personal factors. In addition, 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 greatly 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.
AIDA Model
According to Lewis (1987), the role of an advertisement is to attract the 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 by 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 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 the consumer buying behaviour.
Ashraf Bany Mohammed and Mohammed 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 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.
Jenyo and Soyoye (2015) evaluated online marketing and consumer purchase behaviour: a
study of Nigerian firms’ samples of thirty (30) companies are drawn from Lagos metropolis
to participate in the research and one hundred and twenty (120) questionnaires are
administered to them to draw conclusion and analysis from their responses. This explicitly
indicates that there is a significant relationship between online marketing and consumer
purchase decision in Nigerian firms. Also, there is a significant relationship between
consumers purchase decisions and infrastructure for the Internet. Finally, there is a significant
relationship between consumers purchase decisions and Internet security.
METHODOLOGY
This study used descriptive research design. The population of the study consisted of internet
users in Lagos State which was given as 13,840,000 (Nigeria Bureau of Statistics 2018).
Primary data was the major source of data collection for the study. The primary data was
obtained directly from respondents through the administration of questionnaire. The sample
size of this research was calculated using Cochran (1977) sample size determination formula.
Cochran recommended sample size formula for calculating a sample size for proportions of
Z 2 pq
large or undefined population is shown: n0 = n0 =384
e2
Regression analysis was used in this study to reveal the degree of effect of online advertising
on consumer behaviour.
Results and Discussion of Findings
Table 1 Response Rate
Response Rate Frequency Percentage (%)
Returned 381 98.96%
Unreturned 3 1.04%
Total 384 100%
Source: Researcher’s Computation, 2020
Table 1 shows that 381 (98.96%) of the respondents accurately filled and returned the
questionnaires while 3 (1.04%) of the respondents didn’t accurately fill and return the
questionnaire.
Table 2 Demographic Characteristics of Respondents
Characteristics Category Frequency Percentage
Gender Male 201 52.8%
Female 180 47.2%4
Total 381 100.0%
Age Less than 25 years 57 15.0%
26 – 30 years 270 70.9%
31 – 35 years 94 29.6%
36 – 40 years 42 11.0%
41 years and above 12 3.2%
Total 381 100.0%
Marital Status Single 289 75.9%
Married 81 21.3%
Widowed 8 2.1%
Divorce 3 0.8%
Total 381 100.0%
Educational Qualification SSCE 46 12.1%
OND/NCE 56 14.7%
HND/B.Sc 240 63%
MBA/M.Sc. 33 8.7%
Ph.D 6 1.6%
Table 4 ANOVAa
Model Sum of SquaresDf Mean Square F Sig.
Regression 120.370 1 120.370 26.431 .000b
1 Residual 104.830 379 .888
Total 225.200 380
a. Dependent Variable: PURDECv
b. Predictors: (Constant), CORPWEBv
Source: Researcher’s Computation, 2020
The table shows that corporate website variables used in the selected study area significantly
predicted the level of Purchase Decision (PURDECv), F (1,380) = 26.431, p < 0.05 F –
statistical indicates that the overall regression model is highly statistically significant in terms
of its goodness of fit since the value of Ftab (3.94) < Fcal (26.431). Therefore, null hypothesis is
rejected. The study concludes that there is positive relationship between corporate website
advertising and Consumer Purchase decision in the selected area.
Table 5 Coefficientsa
Model Unstandardized Standardized T Sig.
Coefficients Coefficients
B Std. Error Beta
The model summary table gives R2 value of 0.666. This shows that Consumer perceived
Data Security (DATSECv), Consumer Perceived Privacy (PPv) and Consumer perceived
Trust in Advertising Appeals (TRUSTv) has positive influence on the Purchase Decision.
Thus, this model is predicting 66.6% of the variance in the level of Purchase Decision
pooling all factors together simultaneously; meaning that 66.6% of the variance is determined
by the predictors captured in this model. The remaining 33.4% is due to other variables not
captured in this model.
Table 7 ANOVAa
Model Sum of Squares Df Mean Square F Sig.
Regression 8.678 3 2.170 78.995 .001b
1 Residual 424.117 376 1.087
Total 432.795 380
a. Dependent Variable: PURDECv
b. Predictors: (Constant), DATSECv, PPv, TRUSTv
Source: SPSS print out, 2019.
The table shows that Online Advertising (OACRED) variables used in the selected study area
significantly predicted the level of Purchase Decision (PURDECv), F (3,380) = 78.995, p <
0.05 F – statistical indicates that the overall regression model is highly statistically significant
in terms of its goodness of fit since the value of F tab (2.46) < Fcal (78.995). Therefore, the null
hypothesis is rejected. The study concludes that there is positive relationship between Online
Advertising Credibility and Consumer Purchase Decision in the selected area.
Table 8 Coefficients
The table shows the contribution of the predictors. In this case, Trust in Advertising appeals
(TRUSTv) contributes highest with Beta value = 1.094, sig < .05 and t-value = 1.883. The
contribution is statistically significant to the level of Purchase Decision (PURDECv).
Consumer Data Security (DATSECv) contributes with Beta value = .116, sig < .05 and t-
value = 2.369. The contribution is statistically significant to the level of Purchase Decision
(PURDECv). Consumer Perceived Privacy (PPv) contributes with Beta value = .014, sig < .
05 and t-value = .320. The contribution is statistically significant to the level of Purchase
Decision (PURDECv). Hence, the null hypothesis is rejected, and the study concludes that
Online Advertising Credibility have positive relationship with the Consumer Purchase
Decision (PURDECv) in the selected area.