When would online advertising work?
Posted by imark | Under online advertising Wednesday Jul 9, 2008Well! that’s the question which is been troubling me for some time now. There have been times when I ask myself why has online advertising not reached to its full potential even in those countries where internet penetration is high? Why does internet still stand at relatively week 6th position after television, direct mail, newspaper, radio and magazine in US in terms of advertising expenditure?
I tried to figure out the answer on the basis of the product involvement aspect. On a very broad level, products could be divided into 2 categories- high involvement products and low involvement products.
Low involvement product are those where not much rational thought process goes into the purchase. Such products are generally cheap and customers show repetitive purchase behavior. Typical example of such products are FMCG products.
On the other hand high involvement products are those which require rational decision making and is much more time consuming. Information seeking is done first and then the judicious decision is made to purchase. Typical example would be electronics goods.
Now to answer the question, let’s look at what is the role of advertising in each case.
|
Product Involvement |
Purpose |
|
Low |
Influence, Nudge the customers to buy |
|
High |
Lead Generation, Enquiries |
As is shown in the table, the role of the advertising in low involving product is to influence and nudge the customers to buy that particular brand. That’s why such advertisements have to be creative in nature so as to stick with customers long enough to influence his purchase.
On the other hand, advertisements meant for high involvement products are meant to generate leads by providing relevant information and enticing customers to make inquiries.
Now when we are clear with the role of advertising for different products, it is easy to understand why online advertising does not work all the time. As everyone would have guessed by now it is the high involvement products which would see much more benefits of online advertising rather than low involvement products. And guess what! The statistics also show the same trend where in expenditure by high involvement products on online advertising is 10% of the total budget whereas it is minuscule 2% for low involving products.
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