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Consumer Perceived Advertising Value and Attitude CONSUMER PERCEIVED ADVERTISING VALUE AND ATTITUDE Abstract With Internet-based advertising spending taking a down turn and many studies attempting to study different reasons, it is important to understand what consumers on the receiving side of the ads think about online advertising. It is also important to further find out if consumers have different perceptions toward traditional and online advertising. Literature in advertising and information systems suggests that the following four factors contribute to consumers’ perceived advertising value and attitude for both traditional and Internet media: entertainment, irritation, informativeness, and credibility. We believe that interactivity is another factor that influences consumers’ perceptions. The present study extends the existing literature by (1) introducing interactivity as another contributory factor, and (2) measuring consumers’ perceived value and attitude of advertising for different purposes (brand building and directional advertising) and different media (traditional and Internet-based). The findings indicate that (1) the model originally developed by Ducoffe and extended by Brackett and Carr is a valid model in general; (2) interactivity is a necessary factor that contributes to consumer perceptions of advertising attitude; (3) the differences between traditional media advertising and the Internet-based advertising do not exist in the model but reflect on different perceived levels of entertainment, informativeness, credibility, irritation, value and attitude; and (4) advertising value is not a mediator between the antecedents and advertising attitude. A parsimonious model of measuring advertising attitude can be better illustrated by removing value from the model. In addition to adding findings to the literature from a theoretical perspective, this study provides practical guidelines for advertising designers and marketers to better strategize their advertising designs, especially for Internet-based advertising. Keywords: Internet-based advertising, traditional advertising, consumer perception, advertising value, attitude toward advertising, interactivity 1 Introduction While the top 100 U.S advertisers spent 64 billion on advertising in 1998 and the spending in all media totaled 231.3 billion in 2001, advertising efficiency has been in question (Luo, 2001; Coen, 2002). Practitioners would like to know the efficiency of advertising into which they have poured huge investment and how to improve their advertising strategy. To their disappointment, literature in advertising and Information Systems suggests that advertising in both traditional media and the Internet is either easily ignored by the audience or is perceived to have little value. The intrusive tactics advertisers employ when competing for consumers’ attention can be “annoying” to the audiences (Sandage & Leckenby, 1980; Rettie, Robinson & Jenner, 2001). The intrusive advertisements can also be costly to decrease viewers’ information seeking task performance (Zhang 2000). Limited time and mental resources make it difficult for the audience to dedicate sufficient attention to most advertisements. Moreover, the development of the Internet is resulting in great growth of online advertising, exposing the audience to an ever-increasing number of promotional messages (Fitzgerald, 1999; Clutter 2000). It not only has the competition for attraction more intensive, but also makes consumers develop a more sophisticated and selective attention for advertising. All of the above enhances the challenge for advertisers to attract attention from the audience. Consequently, studies tend to show a generally negative public attitude toward advertising (Alwitt & Prabhaker, 1994; Zanot, 1981; Zhang 2002). Consumers’ ignorance also reflects on the falling click-though-rate (CTR) of online advertisement. Statistics show that CTR of advertising have plummeted down from an average 2-3% to 0.24% in December 2000 (Hoffman 2001). CTR of sales promotion through emails during August 2001-August 2002 is only 1.7% (Internet Advertising Bureau 2002). However, the above findings may not be sufficient to eliminate the accountability of advertising as a vehicle of conveying information to the intended audiences. Of interest is the continuing and steady rise of online traffic well after the subsiding of enthusiasm associated with the dot-com craze. The Internet has become a proven medium for advertising and has become a viable alternative to traditional media such as television and billboards. Although current figures fail to meet previous expectations, the online environment has established itself as a unique venue for commerce that has high growth potential. Ducoffe (1996) argues, “The vast majority of advertising exposures reach individuals when they are not shopping for the product or service being advertised, so most messages are simply not relevant to consumer concerns at the time of exposure” (p.22). This places researchers and practitioners in the position of refining their understanding of online advertising in order to better utilize the strengths of the Internet environment. Therefore, the importance of an advertising strategy that caters to consumers’ needs has emerged. It also reveals that the focal point for the development of effective advertising strategy, especially focusing on how the Internet should be differentiated from more traditional means of advertising (Eighmey, 1997; Bezjian, 1998; Chen & Wells, 2000), is in grasping factors that contribute to positive values and favorable attitudes of consumers. Among the fruitful studies on online advertising, some do not differentiate the fundamental differences of advertising purposes, thus making the studies hard to compare or interpret. Advertising can be classified into two categories: brand building and directional (Fernandez and Rosen, 2000; Lohse and Rosen, 2001). Brand building advertising is synonymous with product advertising and is commonly seen in traditional mass media, including TV, radio, magazine, and 2 newspaper. Brand building advertisements tend to be product/service (or retailer) oriented with the purpose of establishing a positive image and creating demand for a product or service that leads to eventual purchase (Barrow, 1990; Rosenberg, 1995). The communication route is typically one-to-many and is designed to reach a mass audience by using a tactic of “intrusion” aimed at capturing the attention of viewers. Directional advertising is designed to help potential buyers locate interesting information (Fernandez, 1995). The communication route is typically one-to-one and it is assumed that a potential buyer brings himself or herself to ads. Advertising in this case is catering to customers’ needs. There is modest research on “directional media” such as Yellow Pages, catalogs, newspaper classifieds, movie listings, directories and industrial guides while there is considerable research on advertising placed in traditional mass media. Advertisements in directional media differ from those in traditional mass media. For example, ads in directional media are placed in goal-oriented and highly organized settings (Fernandez, 2000) that allow consumers to collect and process information at a desired pace. Conversely, advertisements in traditional mass media can be within a distracting and unorganized environment where little room is spared to the audience to critically evaluate the quality of the product and/or service. These two fundamentally different types of advertising are sometimes undistinguishable in several research studies, making their findings difficult to apply. The literature of advertising and Information Systems has studies measuring the efficiency of advertising from both advertisers’ and consumers’ perspectives. Studies represent perspectives of advertisers tend to focus on the amount of sales and consumers purchasing behaviors (Simon and Arndt, 1980; Ekici, Commuri and Kennedy, 1999). There are also studies that focus on consumer advertising behavior (Chatterjee, et al. 1998), or effective online ad designs (Bhatnagar & Papatla, 2001; Langheinrch, et al.; Dreze and Zufryden, 1997; Palmer and Griffith, 1998; Rararski, 2002). On the other hand, effectiveness of advertising can be measured from a consumer’s perspective by studying consumers’ perceived advertising value and their perceived favor in advertising, or their attitude, which have implications to the consumer’s future advertising intention and behavior (Ajzen, 1991). In this study, we examine consumers’ perceptions on the values and attitudes between the Internet-based advertising and traditional advertising for both brand building and directional advertising purposes. By doing so, we intend to clarify some conceptual confusions in the current literature on advertising attitude and value, to validate and to extend some existing models on advertising attitude and value. We believe that the Internet and Web have the potential to support goal-oriented consumers. This can be utilized by well-designed directional online ads through data based marketing. We hope that this research can provide practical suggestions on how to design effective online ads to fully utilize the advantages of the online medium. A Model of Advertising Value and Attitude Existing advertising literature shows some confusion between the two constructs used in studying advertising perceptions. Some do not draw a distinction between advertising value and attitude (Alwitt & Prabhaker 1994; Metha, 2000; Chen & Wells, 2000;
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