1. CONSUMERS’ ATTITUDE
TOWARDS
INTERNET ADVERTISING
AN EMPIRICAL STUDY
Guided by :
Dr. Sita Mishra
Submitted by :
Amit Dhawan (11EX-006)
Bishnu Kumar (11EX-013)
Harendra Singh Rawat (11EX-020)
Kumar Abhishek (11EX-028)
Pankaj Mohindroo (11EX-038)

2. Contents
What is IA ...................................................................................................................................................... 3
Background ................................................................................................................................................... 4
Consumer Response to Internet Advertising ................................................................................................ 5
Research objective ........................................................................................................................................ 6
Research Methodology ................................................................................................................................. 7
Questionnaire Methodology ..................................................................................................................... 7
Sample Size ............................................................................................................................................... 7
Methodology of analysis ........................................................................................................................... 7
Sampling Technique .................................................................................................................................. 8
Demographics ............................................................................................................................................... 9
Questionnaire ............................................................................................................................................. 11
Results and conclusions of Data Analysis ............................................................................................... 13
1. General........................................................................................................................................ 13
2. Advertising Utility........................................................................................................................ 14
3. Indignity ...................................................................................................................................... 15
4. Trust ............................................................................................................................................ 16
5. Price Perceptions ........................................................................................................................ 17
6. Regulations.................................................................................................................................. 19
Factors affecting general attitude towards Internet advertising........................................................ 21

3. What is IA
According to consumers, IA includes many forms of commercial content—from
electronic advertisements that are similar to traditional advertisements (e.g.,
billboards, banner ads) to formats that are different from traditional
advertisements, such as corporate Web sites. Thus, it appears that there are
idiosyncratic differences in consumers’ perceptions of what constitutes IA such that
any specific definition of IA is likely to be a bad fit for measuring IA perceptions.
Because the goal of the present research Project is to assess consumer perceptions
of IA, IA is described broadly as any form of commercial content available on the
Internet that is designed by businesses to inform consumers about a product or
service. Hence, IA can be delivered via any channel (e.g., video clip, print or
audio), in any form (e.g., an e-mail message or an interactive game), and provide
information at any degree of depth (e.g, a corporate logo or an official Web site).

4. Background
Despite the limited understanding of how consumers judge IA, there has been
substantial commercial growth on the Internet of many forms of advertising.
In addition to anticipating the monetary growth of the Internet, the majority of on-
line businesses believe the Internet is here to stay and will generate sales in the
future. Furthermore, the adoption curve for the Internet is quite steep, especially in
comparison to other media introduced in this century (radio, television, cable. Thus,
as many have predicted, investment in IA is likely to escalate
into the billions in the near future.
Studies of consumers’ reactions to IA typically have quantified customers’
judgments of Web sites in terms of consumers’ behavioral traces at the site (i.e.,
counting the number of “clicks” and “hits”. These measures have been shown to
both overestimate and underestimate the number of visitors and exposures,
however. Moreover, the indirect nature of these methods makes it difficult to
ascertain the meaning behind the results (e.g., whether clicking on a link was an
accident or intended behavior, and whether the loaded site satisfied the consumer’s
expectations).
Coinciding with the growth in IA, there has been a plethora of guidelines about how
to best reach and persuade the consumer market with the Internet. Many of these
recommendations have been based upon assumptions (rather than actual
assessments) of how consumers react to IA relative to General Advertising.
Relatively little is known about how consumers judge Internet advertising
and which components make up these attitudes

5. Consumer Response to Internet Advertising
Most of the direct-response measures administered to consumers have assessed
consumers’ perceptions and usage of the Internet and its services. For instance,
research has explored consumers’ attitudes toward on-line services and purchasing
online ; Web usage ; recall of the sites visited; actions taken toward intrusive
advertising ; effect of banner ads on brand judgments ; attitudes toward Internet
advertising policies; awareness of the Internet itself. Yet, relatively less is known
about consumers’ evaluations of IA specifically.
In an important exception, Mehta and Sivadas (1995) assessed Internet user’s
attitudes toward advertising on newsgroups and through e-mail. They found that
consumers held negative attitudes toward newsgroup and e-mail advertising, even
when the message was directly relevant to the special interests of the group.
However, their sample was limited to those who posted messages to the group.
Those who merely read messages were not included in the sample. As a result, it is
possible that these unfavorable attitudes are due to this vocal sample’s perception
that they are competing with electronic advertisements for the group’s attention.
In addition, attitudes toward newsgroup/e-mail advertising may not generalize to
all forms of IA, including less intrusive ads (such as Web sites). Consequently, it is
unclear whether the results would generalize to the entire Internet population’s
attitudes toward IA in its many forms

6. Research objective
The objectives of the present research are to address following two questions:
 What is consumers’ attitude ( positive or negative ) towards Internet
Advertising
 What are the factors that resulted in above attitude

7. Research Methodology
Questionnaire Methodology
Consumers’ attitude towards Internet Advertising will be first studied through a
general question and 5 other factors. Based on the following 6 points, questionnaire
was designed and responses were collected. Factors considered for noting
consumers’ attitude is as below :
1. General
2. Advertising Utility
3. Indignity
4. Trust
5. Price Perceptions
6. Regulations
Sample Size
Responses were collected from 122 participants, having different gender, age,
education and income.
Methodology of analysis
Five options ranging from Strongly Agree to Strongly Disagree were provided to
participants to answer each question. Scores were assigned to each option from 5
to 1 respectively.
We have assumed Strongly Agree and Agree responses as positive while Strongly
Disagree and Disagree responses as negative.
No. of participants voting for Strongly Agree and Agree were counted and
percentage from total participnats have been calculated which will give us the
participants having positive responses.
Similarly No. of participants voting for Strongly Disagree and Disagree were
counted and percentage from total participnats have been calculated which will give
us the participants having negative responses.

8. Percentage of participants having neutral reponse were also calculated.
Graphs of these percentages have been plotted and analysis have been made.
This analysis will solve the first objective of our Research Project
Sampling Technique
Regression have been applied for solving the second objective of our research. i.e.
to know that which factor leads to consumers’ attitude ( positive or negative ).
Coefficient of Determination R2 have been calculated.
Coefficient of Determination is a tool which actually tells us that how much
percentage change in dependent varaiable can be explained by the Independent
Variable.
In our Research Project Attitude of Consumers’ ( General question ) have been
taken as Dependent Variable and 5 factors will be take as Independent Variable.

9. Demographics
Gender Analysis of Participants
Male
40%
Female
60%
Age-wise Analysis of Participants
14-18
14%
25-34
46%
18-24
40%

10. Education-wise Analysis of
Participants
Studying in High
School
11%
Studying in
Graduate
course
Post Graduate 13%
30%
Graduate
32%
Studying in Post
Graduate
course
14%
Income-wise Analysis of Participants
50000-59999
60000
per month
and
11%
above
10%
Less than 20000
per month
40000-49999 38%
per month
17%
30000-39999 20000-29999
per month per month
13% 11%

11. Questionnaire
S.No. Description Stron Agree Neutral Disagree Strongly
gly Disagree
agree
4 3 2 1
5
1 In general do you like or
dislike Internet
Advertising
ADVERTISING UTILITY
2 Most Internet advertising
is informative
3 I like to look at most
Internet advertisements
that I am exposed to
4 How often do you use
Internet advertising to
help make your purchase
decisions?
5 In general, how confident
do you generally feel
using information you see
in an Internet ad to make
a purchase decision?
INDIGNITY
6 Most Internet advertising
insults my intelligence
7 How often do you feel
offended by Internet
advertisements?
8 How often have you felt
misled by Internet
advertisements?
TRUST
9 In general, I feel I can
trust Internet
advertising

12. 10 Products that I have
used usually live up to
the promises of quality
and performance made
in their Internet
advertisements
11 How comfortable are you
about purchasing an
item directly through an
address or phone
number in an Internet
advertisement
PRICE PERCEPTIONS
12 In general, Internet
advertising results in
lower prices for the
products I buy
13 I usually get better value
for my money in Internet
advertised brands of
products than in
unadvertised brands
14 What effect do you think
Internet advertising has
on the prices of
advertised products?
REGULATIONS
15 I think the government
should put less effort
into regulating the
content of Internet
advertising I see
16 Internet Advertising
regulation should be
done by the advertising
industry through its
member associations
rather than by the
government
17 How do you feel about
the amount of regulation
which the government
currently places on
Internet advertising

13. Results and conclusions of Data Analysis
1. General
Positive Neutral Negative
S. No. General Question
Response Response Response
1 In general do you like or dislike 38 28 35
Internet Advertising
General Liking / Disliking
Negative Positive
Response Response
35% 37%
Neutral
Response
28%

14. 2. Advertising Utility
S. Advertising Utility Positive Neutral Negative
No. Questions Response Response Response
Most Internet advertising
1 62 19 19
is informative
I like to look at most
2 Internet advertisements 38 13 49
that I am exposed to
How often do you use
Internet advertising to
3 15 18 67
help make your purchase
decisions?
In general, how confident
do you generally feel using
4 information you see in an 45 25 30
Internet ad to make a
purchase decision?
Advertising Utility
Positive Response Neutral Response Negative Response
4 45 25 30
3 15 18 67
2 38 13 49
1 62 19 19
The first factor consisted of items related to the value or effectiveness of
advertising in meeting consumers’ needs.—that is, how informative and
entertaining the advertising is and how useful it is for making purchase decisions.
Indeed, informativeness and entertainment have been identified as positively
contributing to the perceived value of IA. The informational item loading on this
factor was, “Most Internet advertising is informative.” The majority of participants

15. agreed either somewhat or strongly that IA is informative (62%). However, they
did not hold such a favorable view of IA’s enjoyableness.
In response to the entertainment item, “I like to look at most of the advertisements
on the Internet that I am exposed to,” nearly half of the respondents disagreed
either somewhat or strongly (49%). Only a little over a third enjoyed looking at IA
(38%).
3. Indignity
Positive Neutral Negative
S. No. Indignity
Response Response Response
Most Internet advertising insults my
1 intelligence 54 22 24
How often do you feel offended by
2 Internet advertisements? 15 14 71
How often have you felt misled by
3 Internet advertisements? 16 16 68
Indignity
Positive Response Neutral Response Negative Response
3 16 16 68
2 15 14 71
1 54 22 24
Overall, relatively few respondents felt insulted, offended, and misled by IA. Again,
this is not a global view of advertising by this demographic group: fewer felt
indignant toward IA. For instance, only a quarter of participants (24%) agreed that
“Most Internet advertising insults my intelligence”. In addition, few felt at least

16. sometimes offended (29%) or misled by IA (32%). Because consumers are in
control of the IA viewed, they may perceive the self-selected IA to be appropriate
for them—essentially, less insulting, offensive, and misleading.
4. Trust
Positive Neutral Negative
S. No. Trust
Response Response Response
In general, I feel I can trust Internet
1 48 21 31
advertising
Products that I have used usually live
up to the promises of quality and
2 37 51 12
performance made in their Internet
advertisements
How comfortable are you about
purchasing an item directly through
3 21 20 58
an address or phone number in an
Internet advertisement
Trust
Positive Response Neutral Response Negative Response
3 21 20 58
2 37 51 12
1 48 21 31
In addition to confidence in using IA to make a purchase decision, more participants
felt they could generally trust IA than felt they could not trust IA (48% vs. 31%. In
fact, a higher percentage felt they could trust IA than liked IA (38%) from
Advertising Utility Factor.

17. Only 12% of IA respondents agreed that the products they use generally fail to live
up to IA promises. This small percentage, however, is likely due to consumers’ lack
of experience (or association) between IA and their purchase behavior. Indeed,
over half (51%) neither agreed nor disagreed with this statement.
Consistent with the findings for trustworthiness, 41% of the IA sample reported
feeling somewhat or very comfortable purchasing an item directly through an
address or phone number in an Internet ad. Overall, therefore, it appears that the
Internet population finds IA to provide relatively trustworthy information
5. Price Perceptions
Positive Neutral Negative
S. No. Price Perception
Response Response Response
In general, Internet advertising
1 results in lower prices for the 34 35 30
products I buy
I usually get better value for my
money in Internet advertised
2 22 50 28
brands of products than in
unadvertised brands
What effect do you think Internet
3 advertising has on the prices of 28 56 15
advertised products?

18. Price Perception
Positive Response Neutral Response Negative Response
3 28 56 15
2 22 50 28
1 34 35 30
Most did not perceive IA to increase prices. In fact, 35% stated that IA has no
effect on the prices of products they buy and 34% stated that IA lowers prices of
the products they buy.
This persistent and commonly- held perception is likely due to consumers’
(1) awareness that Internet Advertising is comparatively less expensive than
General Advertising and/or (2) experience in price comparisons between generally
advertised and advertised items through Internet.
The relatively high percentage of neutral responses again may be due to lack of
experience in using IA to make purchase decisions.
When asked whether IA in general increases, decreases or has no effect on product
prices, the majority of the sample said that IA has no effect (56%).
This may appear contradictory to the previously mentioned agreement that “In
general, [IA] results in lower prices for the products I buy.” However, it may be due
to the difference in focus between “products I buy” and products in general. For
instance, perhaps respondents have used IA primarily to find the
least expensive product. Or perhaps wording the question in terms of “products I
buy” may have triggered thoughts about their own proficiency in using the Internet
to locate good bargains.

19. 6. Regulations
Positive Neutral Negative
S. No. Regulations
Response Response Response
I think the government should put
1 less effort into regulating the content 60 11 28
of Internet advertising I see
Internet Advertising regulation
should be done by the advertising
2 industry through its member 67 10 22
associations rather than by the
government
How do you feel about the amount of
regulation which the government
3 24 54 22
currently places on Internet
advertising
Regulations
Positive Response Neutral Response Negative Response
3 24 54 22
2 67 10 22
1 60 11 28

20. The majority of the IA sample (60%) wanted less government regulation of the IA
that they view (vs. 28% wanting more). Most felt that IA regulation should be done
by the advertising industry (67%).
The majority view that industry (rather than government) should regulate IA
Sentiment against government regulation of IA seems to apply mainly to ads that
respondents themselves view; when rating government regulation of IA in general
terms, most respondents were satisfied (54% say the amount of government
regulation is just right).

21. Factors affecting general attitude towards Internet advertising
In this section, the relation between the different questionnaire items within
individuals is examined.
In order to examine which factors contributed to respondents’ judgments of IA, the
items within each of the five factors were averaged and then regressed on overall
IA attitudes (i.e. the degree to which respondents liked or disliked IA) using
stepwise regression procedures.
R2 (Coefficient of determination) was calculated, which explains that what
percentage variation in dependent variable can be explained by variation in
independent variable.
The results indicated that 43% of the variance in overall IA attitudes could be
explained by the advertising utility factor alone.
The next relevant factor, the indignity factor, led to an additional 2% explanation of
the variance.
With all of the factors in the model, an additional 4% of the variance was
explained beyond what the advertising utility factor could explain, indicating that
the advertising utility factor alone accounted for much of the variance in overall IA
attitudes.
To examine which specific items contributed (and to what degree contributed) to
respondents’ IA attitudes, the 16 attitudinal items were separately regressed on
overall attitudes towards IA using stepwise regression procedures.
The results indicated that 42% of the variance in attitudes toward IA could be
accounted for by responses to two of the four items in the advertising
utility factor:
how informative IA is
how enjoyable it is to look at
Conclusions
 Hence, even when the questionnaire items were entered separately into the
regression equation (rather than aggregated into their respective factor and
then regressed), the majority of the advertising utility items contributed
most to IA attitudes.

22.  More importantly, the enjoyment item contributed most to IA attitudes and
the behavioral item contributed nearly equally to the informativeness item.