Professional Documents
Culture Documents
A LITERATURE REVIEW
Nabil Y. Razzouk, Cal State University, 5500 University Pkwy, San Bernardino, CA
92407. nrazzouk@csusb.edu
Victoria Seitz, Cal State University, 5500 University Pkwy, San Bernardino, CA 92407.
vseitz@csusb.edu
Eric Newman, Cal State University, 5500 University Pkwy, San Bernardino, CA 92407.
enewman@csusb.edu
Ali Caglar Kepekci, Cal State University, 5500 University Pkwy, San Bernardino, CA
92407.
Abstract
and services. However, many companies have become disenchanted with the Internet, as
they have not achieved the commercial potential anticipated. Some suggested the Internet
is better suited for interpersonal communication and personal sites rather than for
marketing products. However, researchers suggest that value-based advertising is the key
concept behind their success. The paper reviews the nature and role of value-based
Introduction
Since 1996, The World Wide Web has captured significant public attention.
Exponential growth in Internet hosts and personal computer adoption has led to dramatic
increases in online activity. There are 88 million Internet users in the United States. This
number is expected to reach 143 million by the end of 2004 (Gilbert, 2001). Millions of
people are online for various reasons such as sending e-mail (52%), reading news (22%),
surfing on the web for fun (21%), buying products (4%), participating in auctions (3%),
for reaching millions of potential customers. Since then, marketers have adapted value-
based advertising strategies to the Internet. Advertising revenues in 2000 were reported at
$8.2 billion in the United States. This has been achieved in just six years. Forecasters
predict that advertising revenues will top $14 billion by the year 2002 (Netvalue, 2000).
to develop new services and products (Hanson, 1999). However, many companies have
become disenchanted with the Internet since they have not achieved the commercial
potential promised. Some have suggested that the Internet is better suited for
interpersonal communication and personal sites rather than for commerce. Some reports
indicate that companies are removing their ads and writing off their investment with
executives questioning whether the potential is real or just hype (Schlosser & Kanfer,
1995).
Hence, the purpose of this paper is to review the nature of value-based advertising
web sites and their content and the level of consumer involvement with the product
(Ducoffe, 1996). Value-based advertising meets the needs of consumers to aid in making
involvement product.
Literature Review
Regarding the Internet, Berthon, Pitt, and Watson (1996) and Lamb, Hair and
McDaniel (1996) suggest that marketers need to understand the true nature of this
medium to enhance its effectiveness. They add that “value” is a factor that plays an
important role in the overall effectiveness of the web sites. Value relates directly to the
Barker and Groenne (1996) investigated the type of value strategies being used on
the Internet and concluded that value in Internet advertising is provided in three ways:
information, entertainment and purchase facilitation. Furthermore, the authors argue that
the level of customer involvement should be taken into consideration when selecting the
type of value strategies to implement. This assertion is consistent with those of Rossiter,
Percy, and Donovan (1991). , and with the Elaboration Likelihood Model (Chaudhuri &
Buck, (1995).
information is vital for high involvement product web sites, while entertainment content
may be more fit for low involvement product sites (Chaudhuri & Buck, 1995; Petty &
Cacioppo, 1983).
Additionally, the primary reason fo r distinguishing between high and low product
involvement is that habit, intuition and convenience sometimes guide the actions of
develop effective value-based strategies. Aaker and Norris (1982) state that an
low involvement situations is the basic criteria before selecting an advertising strategy.
Ducoffe (1996) notes the importance of value-based ads in the traditional media
suggests that “… from a consumer point of view, a satisfactory exchange is one where
the value of the advertising itself is considered to meet or exceed expectations. According
In their research, Stayman, Aaker, and Bruzzone's (1989) revealed that 47 percent
of television viewers watch an ad because of its information content and 45.6 percent
perspective, the ability to supply information is the primary reason for watching
advertising.
Howard (1989) further explored the role of advertising content and argued that the
more pleasure, arousal and dominance in advertising content, the more effective the
advertising. In another study, Ducoffe (1996) found that the value of entertainment lies in
as information. Furthermore, the researcher argued that emotional content was imperative
shown in Table 1.
Table 1
Sluggishness
Altheide and Snow (1979) stated that entertainment calls forth behaviors based on
emotion but that this content of an advertisement may not be perceived directly. Various
tools may be applied to enhance the emotional content including humor, animation,
celebrity endorsements, psychological appeals (comfort, safety etc.) music, and semiotics
In their research, Steward and Furse (1984) found that information and
entertainment are essential content for value-based advertising. If value is provided to the
Barker and Gronne (1996) state that while the traditional media approach to
site is to receive a valuable, lasting and positive impression with the customer in the
interactive context of the web, it needs to provide value in return for the time the
However, Berthon, et al., (1996) assert that capturing the attention of Web users
briefly on the Internet is inadequate. The ad must retain and reward their attention in
order to get the right exposure. The authors introduce a conceptual framework of a six-
stage conversion process (Figure 1) to point out the importance of value on the Internet.
According to this model, value plays a crucial role in the efficiency of the contact stage.
Contact efficiency measures the conversion of web site “hits” into “visits.” A visit
compared to a “hit” implies greater interaction between the surfer and the web page.
Moreover, the structure of the model implies that the conversion rate of “hits” into
“visits” may convert “hits” into purchases of the product. Consequently, from a
possible.
.
Figure 1
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empirically tested the consistency of these strategies for the Internet and found that
information and entertainment are value-based strategies used on the Internet the same as
research and found that purchase facilitation was another value-based strategy on the
advertising.
Information Strategy
Barker and Groenne (1996) and Ducoffe(1996) indicate that information is the
most prominent strategy on the Internet, particularly for high involvement product sites.
Prospective high involvement product buyers are more likely to require more extensive
information than low involvement product buyers. The more product information
provided, the greater the possibility of creating value and satisfaction for the web site.
Additionally, Resnik and Stern (1977) identified a fourteen- item scale to measure
the information content of a particular advertisement. These included: price (on which
most consumers base value), quality, performance, components and contents, availability,
research, and new ideas. This protocol has been used in many studies to measure the
Automobile web sites may serve as an example for intense information content.
Most sites contain extensive information including details about the car, the engine,
accessories, performance, safety features, and price as well as detailed information about
company and its investors. They also provide the opportunity to compare the different
models as well as different makes. Other valued information may include warranties,
shipping and refund difficulties are the most common impediments to Internet shopping,
but can be transformed to become a strong facilitator of purchase transactions on the
Internet. The web site may include sufficient information regarding delivery and any
additional costs that may be incurred, such as fees for overnight delivery.
is made are less likely to be sold via the Internet. However, in the
book.
relevant for low involvement products usually sold via mail order
clothing.
• Standardized goods such as compact discs and books are also well
suited for online sales, since the customer knows which quality
level to expect.
reports.
• High-risk goods such as cars or jewelry are ill suited for online
One of the best-known Internet web sites that combines purchase facilitation
function with advertising is Amazon.com. The products sold by Amazon.com fall within
the suggested range of products that can be sold via the Internet and the company uses a
to the site can search for books on specific topics, retrieve specific information regarding
the book such as price, read reviews from the publisher and comments from cus tomers.
After a specific book has been selected, the customer can purchase the book via the
Internet. Clearly explained purchase steps, fast download time, online price specials, as
well as a variety of personal services encourage customers to buy from Amazon (Gilbert,
2001).
Entertainment Strategy
advertising, researchers suggest this strategy is appropriate for low involvement products.
Barker and Groenne (1996) indicate the possibility of creating entertainment focused
advertising on the web for products with low involvement, low information intensity and
researchers includes different incentives for customers to visit and stay on the web site.
As noted earlier, the longer a visitor stays on the site, the higher the probability for
advertising success.
little to do with the product presented. Because of this, advertainment strategies can
theoretically be used for all kinds of products. Where commercials compete for attention
in sites with related content, advertainments compete for attention with both related and
unrelated sites (Barker & Groenne, 1996). Advertainments are also likely to attract those
that just surf the Internet rather than those who are searching for information to purchase
a product.
Additionally, Barker and Groenne (1996) found that interactivity in the site
provides unique opportunities for creating advertisements with a high entertainment value
and a high degree of customer involvement. Examples are: chat services, competitions,
through advertainment strategies can improve the company’s image and build brand
preferences.
Summary
The research presented indicates that the Internet, in many ways, is similar to
developed to add value to the site. Furthermore, classification of target market’s product
the type of value-based strategy to be utilized, thus, enhancing the Internet’s ability to
Much remains unkno wn about the future of advertising on the Internet. However,
what is known from the experience of most of the defunct dot.com companies is that
content, frequency, and dollar expenditures are insufficient to impress web surfers.
Value remains the caveat of efficient and effective advertising. Marketers can provide
marketers need to formulate strategies that provide value and encourages consumers to
interact with the site. The basic premise underlying successful Internet advertising is that
if marketers do not provide value for the customer, they will find it highly difficult to
REFERENCES
Berthon, P., L. F. Pitt, and R. T. Watson (1996). “The World Wide Web As An
Chaudhuri, A., & Buck, R. (1995). The Elaboration Likelihood Model: A basic
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Prentice Hall.
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Lamb, W. L., J. F. Hair, and C. McDaniel (1997). Marketing, Englewood Cliffs, NJ:
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Marquez, F. T. (1977). “Advertising Content: Persuasion, Information or Intimidation?”
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