Wednesday, April 11, 2012

Course Work

I am currently pursuing a master of marketing research degree, and through the course of the program I do a steady amount of writing for papers and projects of all shapes and sizes. I think it's a shame to put so much effort into writing something, turn it in, and then that work never sees the light of day. So I am going to start posting papers that I write here. Why the heck not?

One of the ongoing assignments that I'm working on now in my Advertising Research class is to write summaries on articles that are given as required reading during the course. Often they are scientific studies used to gain insight into some part of the advertising puzzle. After the summary we were asked to write two hypothetical questions that may be used in part to construct the questions used on our exams. Here goes.

A Summary of “The Impact of Content and Design Elements on Banner Advertising Click-through Rates”

            The first banner advertisement was introduced in 1994.  Since then internet advertising has developed into an entire industry, which generated approximately $7.2 billion in revenue by 2001 in the United States alone (Lohtia et al. 2003). About 35 percent of this was generated by banner advertisements.
            The study in this paper defines its goals as twofold.  First, it attempts to define what makes a good banner advertisement, and second it attempts to show the differences in what is effective between business to consumer (B2C) and business to business (B2B) advertisements (Lohtia et al. 2003).
            Despite the frequency of use and size of budget of this medium, much of the information regarding the success rate of banner ads comes from the industry itself in the form of unempirical reports. These reports make claims that banner ads improve branding, and that size, use of interactivity, and positioning of the ad have a further impact on branding effectiveness. What little scientific testing that does take place often has several weaknesses: the use of samples comprised of brands that are already well known, the use of small samples, and the use of volunteer respondents that are likely aware that they are participating in a study.  All of these factors can contribute to bias and can throw the generalization of findings into question (Lohtia et al. 2003).
            The study in this paper overcomes these shortfalls by using a large body of real data on advertisements, and by concentrating on what contributes to the usefulness of banner ads (Lohtia et al. 2003).
            The study focused on click through rate (CTR) as a dependent variable that can illustrate the effectiveness of a particular banner advertisement.  The context of the ad was also thought to be important, with different variables affecting a choice when the choice was either high or low involvement. Independent variables were defined as cognitive content, affective content, cognitive design, and affective design. Content was measured by the use of incentive on the cognitive side, and on the affective side it was measured as the use of emotional appeals. Cognitive design was measured by examining the interactivity level of the ad, while affect was accounted for by looking at the colors used in an ad. Lastly, the level of animation was deemed to be a factor that would likely affect the CTR of the advertisement (Lohtia et al. 2003).
The hypothesis was then applied to a sample of 10,000 banner ads from the real world.  Findings were numerous.  One interesting result was the revelation that the presence of incentives in banner ads is worse than ineffective.  While it has influence on the CTR of B2C advertisements, it has a negative effect on B2B ads. Animation had a negative effect on B2B but a positive one on B2C.  Both groups preferred a moderate amount of color in their banner ads (Lohtia et al. 2003).
This information will help web designers and banner advertisement producers to fine tune their strategies in order to increase their effectiveness when targeting both businesses and consumers.

Lohtia, Ritu, Naveen Donthu, and Edmund K. Hershberger (2003), “The Impact of Content and Design Elements on Banner Advertising Click-through Rates,” Journal of Advertising Research, (December), 410-418.

1. In the Lohtia article, click through rates and consumer opinion are two metrics used to show the effectiveness of banner ads.  What is another metric that could be used? 2. In the Lohtia article, why was the study done not a true scientific experiment?

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