An Integrated Review of the Efficacy of Internet Advertising: Concrete Approaches to the Banner Ad Format and the Context of Social Networks

Abstract

Advertising investment on the Internet is currently growing at a faster rate than in all other means of communication. Specifically, companies’ integrated marketing communications (IMC) are using the Internet as a main means of advertising and, increasingly, social networks as part of their communication strategies. Given their growing importance, this chapter performs an exhaustive theoretical analysis of the efficacy of online advertising. First, we perform a detailed inventory of the main forms of advertising used on the Web and social networking sites. Afterward, we analyze the variables shown, through literature, to be most influential on online advertising effectiveness, paying special attention to the banner ad format. Next, the topic of advertising effectiveness in the specific context of social network sites is discussed. In conclusion, some relevant implications for practitioners and research opportunities are presented.

Appendix

Summary of relevant conclusions on the variables that affect the efficacy of the banner format on the Internet

Physical characteristics of the banner
Color (coherence)	• The banner’s color in relation to its containing website affects the perception of coherency and affects attitudes towards the ad	Moore et al.(2005)
	• The incoherence between a banner and its containing website produces a favorable effect on memory and recognition, generating more attention and leading to a more thorough process of the message
	• The font’s color attracts attention towards the ad in cases of high contrast between the background and the font, while ads with low contrast do not affect attention
Size or shape	• The larger the ad’s size, the better the impression it makes on the consumer	Baltras (2003)
	• Horizontal banners work better than skyscrapers (vertical banners)
	• The ad’s shape is less important than its content	Dreze and Hussherr (2003) and Lapa (2007)
	• The banner’s size is less relevant than the location it occupies within the website	Dos Santos (2007)
	• Users show a certain cognitive regularity in the processing of banners with distinct sizes. There is not empirical evidence that indicates that larger banners are more remembered than smaller banners
Animation level: dynamic	• Animation generates greater attention, a greater number of clicks (CTR) and better recall	(Li and Bukovac, 1999)
	• Animation reduces blindness towards the banner	Bayles (2000)
	• Animation does not produce an effect on ad recognition	Bayles (2002)
	• Animation does not produce an effect on memory of recognition	Dreze and Hussherr (2003)
	• Having a dynamic banner is preferable to a static one as it generates greater attention	Sundar and Kalyanaraman (2004)
	• The animated banner is irrelevant as there is a tendency to ignore it	Burke et al. (2004, 2005)
	• It delays visual exploration and reduces memory
	• Animation speed matters	Sundar and Kalyanaraman (2004)
	• Greater speed, greater attention
	• Animation improves the attitude towards the ad but worsens the ad towards the product	(Sundar and Kim 2005)
	• Excessive animation can generate negative cognitive and emotional effects. If the banner is perceived as coercive, it causes skepticism and distrust, negatively influencing the user’s attitude towards the website, brand or their intentions to revisit the site	Yun and Kim (2005)
	• Animation increases CTR, prolongs navigation time, and reduces the focus of the user’s attention, causing them to examine fewer elements which affects their search process	Hong et al. (2007)
	• Dynamic banners are better remembered than static banners but this does not coincide with a significant effect on recognition of the message	Kuisma et al. (2010)
	• Negative effects of animation are moderated by loyalty to the website and by the users’ need for knowledge	Thota et al. (2010)
Animation level: static	• Lack of animation attracts the users’ attention, while the presence of animation increases the likelihood of clicking and purchasing	Hong et al. (2007)
Banner content
Creativity	• Users prefer banners with short, clear messages to ones with long messages	Baltras (2003)
	• Promotions and encrypted messages to have an impact on visitors
	• Complex creativity that lengthens download time has a negative influence, leading to users changing websites or to not seeing the ad
	• Creative banners are more efficacious in terms of increased CTR when compared to large banners with large messages and an absence of promotional incentives	Robinson et al. (2007)
Incorporated graphic images	• Inclusion of visual elements such as a cursor (mouse) does not improve CTR	Lees and Healy (2005)
Source credibility	• Source credibility is vital for understanding the efficacy of online advertising. When a source is highly credible, there is an increase in the ad’s relevancy, positive attitudes towards the brand and purchasing intentions	Choi and Rifon (2002)
Location within the website
Page position	• Ads located in a website’s periphery play a different role than those shown at the top of the page	Benway (1999)
	• Flash banners in a website’s periphery accelerate the decision-making process, although users infrequently glance at them in response to their flashes	Day et al. (2006)
	• Peripheral banners, instead of attracting participants attention, elevate their arousal level, which in turn, increases their decision making speed when faced with a decision between several choices
	• Users regularly remember a banner’s content independently of its position	Dos (2007)
	• When sizes are similar, users better remember banners found at the bottom of the website over those found at the top of the page. Therefore, position outweighs size in terms of affecting memory
Order of the webpages layout	• Users pay more attention to banners situated in the first pages encountered during navigation	Hsieh and Chen (2011)
	• The first page is always the best at attracting the users’ attention towards the ad. However, the first text-based pages or mixed text/image-based pages are worse at capturing attention than pages based solely on video or images
	• Navigating different pages, within a single website, with distinct types of information affects attention towards the ad. Also, users are more affected by the ad’s content when it is placed on the landing page in comparison to any other page of a website
	• In image or video based pages, attention towards the banner is reduced as the user follows the natural order of a site’s distinct pages
	• Websites with ads based in videos or images do a better job of capturing the users’ attention than websites whose ads are solely based in text or in a mixture of text and images
	• Video-based websites are the best at attracting the users’ attention towards the ad
Coherence with the website	• In the absence of coherency between the advertised products and the website, the message will largely be seen as irrelevant and little interest will be aroused. This results in a lower CTR.	Cho (1999)
	• Coherency between the advertised product and the website’s content has an effect on the sources credibility	Kim and Choi (2010)
	• In the case of highly credible businesses, coherency between advertised and website product will lead to the banner being more persuasive
	• Businesses with low credibility do not benefit from banner-website coherency
Exposure level	• Banner repetition increases recall and recognition. It also improves affect and the user’s cognition towards the ad	Yaveroglu and Donthu (2008)
User characteristics
Gender	• Men mostly use the left hemisphere of their brain, which leads to them establishing global rules and categorical concepts during information processing	Meyers-Levy and Malaviya (1999)
	• Women tend to process with the right hemisphere, which leads to them fixating more on specificities and intrinsic values implied in the stimulus or information
	• Men process holistically and with a general approach, while women process advertising messages in a more detailed and elaborate fashion
Influence of user’s culture	• Individualism has a high explanatory power of attitudes towards a banner ad	Möller and Eisend (2010)
	• Consumers who come from individualistic cultures value banner ads less and less likely to click on them than consumers from collectivist cultures
Web experience	• High Internet expertise users will tend to unconsciously ignore banner ads when developing a sequential navigation process.	Burns and Anderson (1993)
	• Less experienced Internet users click on banners more often than more experienced users	Dahlen (2001)
	• Less experienced users show higher levels of change in their knowledge and attitude towards a brand based on their interaction with a banner than experienced users
	• The effect of experience with animated formats can reduce distraction, produced by the animation, from the user’s task	Hong et al. (2007)
	• The user’s level of experience with animated banners reduces the animation’s effects
	• When users lack experience with a particular website, they pay greater attention to ads during their first visits	Lapa (2007)
	• After familiarizing themselves with a website’s design, the user’s attention continually diminishes
Familiarity with the brand or product	• Familiarity implies growing accustomed to a stimulus, paying less and less attention to it	Cacioppo et al. (2007; pág. 166), Sternberg and Mio (2008, p. 137)
	• Familiarity occurs automatically and does not imply conscious effort. Thus, the stimulus’s relative stability and familiarity govern this process
	• Ads from known brands receive, on average, a greater number of clicks than ads from unknown brands	Dahlen (2001)
	• For known brands, the number of clicks decreases with repeated exposure to the banner
	• For unknown brands, the number of clicks decreases with repeat exposure
Involvement with the product or task	• At low levels of involvement, animation increases CTR	Cho and Leckenby (2003)
	• At high levels of involvement, animation does not influence CTR
	• At high levels of involvement, the odds of the user clicking on the banner are increased when it contains information about the product
	• In cases of low levels of involvement with the product, the odds of the user voluntarily seeking exposure to the banner by clicking on it is lower
	• Involvement leads to higher levels of memory and recognition	Yun et al. (2004)
Relevance of the message	• Relevance does not increase distraction	Cho (1999)
	• Relevance increases CTR in users with a positive attitude towards the website.
	• Relevance leads to a positive attitude towards the ad. When a message is relevant for users, they will tend to follow the so-called central route, as shown by the ELM model	Lapa (2007)
	• If the message is relevant, time spent by users at the website does not affect their attitude towards the message or its efficacy
Attitude towards the brand	• Attitude towards the ad is affected by the ad’s dimensions of evasion, which change depending on the degree of forced exposure to the ad	Fang et al. (2007)
Type of navigation	• For users who navigate in a task-oriented manner, ads with animation diminish the users’ efficiency. In this case, animation also negatively affects users’ perception of the ad	Hong et al. (2007)
	• In the case of exploratory navigation, the negative effects caused by animation are worse than in the case of purpose-drive navigation
	• In the case of free or exploratory navigation, the longer the exposure time, the better memory and recognition of the ad are. This is effect is lesser in the case of users with goal-directed navigation	Danaher and Mullarkey (2003)
	• Participants navigating freely recognize banner ads that include a URL address significantly better than banners with information about the advertised service but without a URL address	Calisir and Karaali (2008)
	• Users navigating in a goal-oriented fashion, show better recognition of ads compared to users with exploratory behavior only when the banner includes some information about the advertised service and a URL address
	• For participants with a goal-directed navigation style, there are no significant differences in recognition of the banner’s distinct content types
Type of position	• Voluntary exposure to the ad, captures the users’ attention and activates the cognitive learning process more intensely than involuntary exposure	Cho (1999)
	• Clicking on the banner is a precondition for beginning of the active processing of information. This, in turn, has positive effects on memory and therefore, on the degree of memory about the ad
	• Forced exposure to a banner makes the user perceive the ad in a more explicit manner. It also increases CTR and attention paid to the banner	Cho et al. (2001)
	• If exposure of a banner is forced upon a user, it can generate a favorable attitude towards the ad and the brand. This furthermore produces an increase in purchasing intention
	• However, at certain levels of forced exposure, feelings of annoyance arise as well as irritation, which induces evasion (e.g. cognitive and physical)