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Vol 17 No 4 (1998)
Advertising into the next millennium
Ashok Ranchhod
This is a conceptual paper based on the evolution of marketing and advertising in a world that is increasingly
dominated by technology. Markets, according to postmodern thought, are beginning to fragment, yet at the
same time they are creating greater challenges for advertisers. Individuals are both isolated and at the same
time interconnected with virtually the whole world via computers. Advertising has for a long time been based
on a one-to-many communications model, yet new technology offers the possibility of a computer-mediated
environment, in effect, a virtual world. This paper tries to make sense of the Internet and contemporary thought
for developing advertising effectiveness. It concludes with eight propositions for further empirical research into
the area of advertising effectiveness in a computer-mediated environment, in a postmodern world.
INTRODUCTION
Marketing has evolved over the last two centuries, as the systems of production and consumption have changed
owing to the rapid development of technology. The rate of development in technology has seen the advent of
mass manufacturing, instant communication systems and the development of rapid transport systems. It is clear
that marketing initially moved from fragmentation to mass marketing to segmentation marketing (Tedlow,
1993). There is now another technological drive, owing to powerful computing techniques (Patron, 1996). The
increasing globalisation of communication for the average person (Cronin, 1996) and the development of
technologies for flexible manufacturing (Yasumuro, 1993) is leading marketers to consider the absolute
dislocation of time and space in undertaking marketing transactions. The Internet, in turn, offers a virtual 24hour shopping experience in any market sector, for any person in the world who is able to access it.
Figure 1 shows the development of these phases and also alludes to the possibility that markets may yet again
be fragmenting (Ranchhod and Hackney, 1997), due to the ease of communication.
This is paradoxically in contrast to the early part of the nineteenth century when markets were fragmented as a
result of poor communications and transport systems. Certainly much of the literature on postmodernism seems
to point towards fragmentation. According to Cova (1996), the fragmentation of society, made possible and
fostered by the developments of industry and commerce, is among the most visible consequences of
postmodern individualism. This fragmentation, he argues, is encouraged by the ability of the individual to
maintain 'virtual' contact with the world, electronically, freeing the individual from social interaction but at the
same time increasing the concentration of the ego, placing demands for 'tailored' products and services in the
marketplace. There are indications that some of the demographic and lifestyle changes in society are just
beginning to offer such a scenario.
THE ROLE OF INFORMATION TECHNOLOGY
Computing power has expanded enormously in the last decade with the processing power available doubling
every 18 months. This capacity has given marketers a chance to grapple with extraordinary detail, every
consumer's preferences, the development of products and an integrated marketing strategy.
Companies with processing power equivalent to the large mainframe IBM computers, which existed ten years
ago, are now within easy reach of most individuals. The development in the foreseeable future of a
sophisticated database is therefore possible for many small companies. Much statistical data can be gathered,
leading to both market research facilities and to an external market intelligence overlay on to general trends
within an organisation. Not only is this possible, but the detailed access allows site evaluation and sales
forecasting. The system can be used to drive shelf-planning, inventory control and the development of
communication strategies. Data collection points can potentially give advertisers a chance to gauge the
effectiveness of certain campaigns, and can also help organisations to develop integrated marketing
communications linking various disparate sets of data. Some companies are now using technology to further
improve their marketing communications efforts which were previously impossible or very difficult, given the
computing software and level of computing power available. The Internet is now becoming another possible
source of advertising and of data collection.
ADVERTISING & ADVERTISING EFFECTIVENESS
Much of the research into advertising effectiveness has been well documented by the Institute of Practitioners in
Advertising in the United Kingdom. The detailed impact of advertising campaigns on sales and potential profits
for companies is also available. All the studies highlight the importance of branding and the subsequent
strategies to enhance the 'value' of the brand to the customer. According to Ambler (1995): 'A brand is the
promise of a bundle of attributes that someone buys and provides satisfaction. The attributes may be tangible or
invisible, rational or emotional.' The most important element is the fact that people 'buy' the brands and also
'buy into' the brands in order to receive some 'satisfaction' (Broadbent, 1997). According to Broadbent a brand
is something 'unique' and offers a substantial difference to the competitive products on offer in the marketplace.
This distinctiveness is often emphasised through targeted television campaigns. For instance, Leather et al.
(1994) discuss the importance of television advertising effectiveness. Central to their argument is the role
played by likeability in advertising. This factor is important in predicting advertising effectiveness (Biel and
Bridgewater, 1990; Haley, 1990) as a diagnostic tool (Aaker and Stayman, 1990) and as a gatekeeper for further
information processing. They argue that people watching commercials need to like them in order to be
persuaded. Their study details likeability and links it to several factors within particular advertisements, such as:
stimulation, relevance, situational dynamism, positive impact, originality, sex appeal, stereotypicality,
ambience, quality and realism. This range of factors is quite wide but is nevertheless an important backdrop for
research.
Other authors such as Neal and Bathe (1997) have considered working through the value equation by Russell
and Kamakura (1991) and Park et al. (1994). The total value of a brand in a particular product/service category
is composed of three key parts. The first part surrounds the tangible product features impacting on purchase
choice. The tangible features are physical and identifiable. The second set of features are those related to the
image transferred to the purchaser. The perceived image and value to the purchaser may be such factors as trust,
longevity in the market, consistency of performance and the creation of a desired emotional state. These factors
form the brand's image. The third part of the equation lies in the price of the product, which to a large extent is
dependent on the factors discussed above.
Batra et al. (1995), using tracking data for their research, consider when advertising has an impact. It appears
from their work that although advertising has only a limited short-term sales impact, it may have a bigger effect
on many of the brand equity variables discussed above. Batra and Ray (1986) found that repeated exposure to
certain brands meant less need for advertising as messages were absorbed quickly. Other studies showed that
familiarity or loyalty to a brand meant repetition could be profitably employed (Aaker and Carman, 1982).
Repetition also seemed to work with complex ad messages (Anand and Sternthal, 1990), or when there is more
competitive spending (Burke and Srull, 1988) or advertising clutter (Webb and Ray, 1979). The re- inforcement
effect seems to be important for loyal customers. Overall, Batra et al. (1995) found a strong and significant
increase in the effect of advertising when the product category was new or growing.
On the other hand, Hollis (1995) attempts to show that a new measure of consumer involvement with
advertising is also important in predicting whether or not advertising messages and associations will pass into
people's memory. Figure 2 shows the grid for involvement factors for 30 UK advertisements. Hollis placed
advertisements in the boxes shown in Figure 2 on the following bases, using three sets of four participants, each
set being divided into positive and negative, active and passive.
l
Active/positive, for example interesting.
l
Passive/positive, for example soothing.
l
Active/negative, for example irritating.
l
Passive/negative, for example ordinary.
Hollis concludes that the role of involvement and memory will, in future, prove to be even more important in
achieving a longer-term effect than is true of predicting short-term sales effects. This section has tried to
establish some of the key current issues in advertising effectiveness and some of the directions in which
empirical research is going. The pointers towards frequency, liking and involvement are useful for trying to
understand the role that the Internet could possibly play in advertising.
THE ROLE OF THE INTERNET
The last three to four years have seen an explosive growth in the number of people using the Internet.
Interconnectivity with simple and powerful computers theoretically offers the opportunity to link with anyone
on a global basis with the use of a modem. The open software written by companies such as Netscape enables
access to information concerning companies, individuals, marketing data, brochures, pictures, science, specific
discussion groups, music, sports, politics and a host of other sources. The current worldwide usage is estimated
to be around 60 million (with e-mail addresses), though in a rapidly growing medium figures can be somewhat
suspect. However, Dr Vinton Cerf, one of the developers of the Internet's data transfer protocols, testified to the
US House of Representatives that: 'There is reason to expect that the user population will exceed 100 million by
1998' (Ellsworth and Ellsworth, 1996). Perhaps what is more important is to consider the way network servers
are growing in the top 25 countries, reflecting the appetite of businesses and consumers alike in connecting to
the World Wide Web. Table 1 summarises the statistics to date. Of course the speed of growth is overwhelming
and the latest statistics could show a different rate of growth in the different countries. This simultaneous
expansion of communication for both the consumers and businesses alike is perhaps heralding the growth of
'business without borders'.
Owing to the fact that the Internet removes many barriers to communication, obstacles such as time zones,
geography and location do not matter, and so a 'frictionless' business environment is theoretically possible
(Anderson, 1997). The main growth is expected to be in the 'business-to-business' area. Anderson argues that
'ubiquitous and equal access to information will create the closest thing yet to Adam Smith's perfect market'.
Are the rules, therefore, that governed advertising strategies to date, drastically changing?
TABLE 1: NETWORK GROWTH BY COUNTRY 1994-1995
Country
United States
Canada
France
Australia
Japan
Germany
United Kingdom
Finland
Taiwan
Italy
Korea, South
Czech Republic
South Africa
Sweden
Austria
Netherlands
Russian Federation
New Zealand
Switzerland
Spain
Israel
Norway
1994
11,278
757
745
400
579
743
699
210
174
262
88
104
111
148
125
202
216
114
150
90
106
129
1995
28,470
4,975
2,003
1,875
1,847
1,750
1,436
643
575
506
476
459
419
415
408
406
405
356
324
257
217
214
% Growth
152
533
169
369
219
136
105
206
231
93
441
341
278
180
226
101
88
212
116
186
105
60
Norway
Ireland
Brazil
Hungary
129
52
111
72
214
168
165
164
60
223
49
128
Source: NIC MERIT /nsfnet/statistics/nets.by.country.
Essentially, firms communicate with their customers through various forms of media. Most media allow the
customers a passive approach to communication and limited forms of feedback. The previous discussions
alluded to the fact that much of the feedback data is gathered through extensive market research or laboratory
testing to understand the effectiveness of advertising. The Internet offers a computer-mediated environment
(CME) on a global basis. The World Wide Web, most importantly from a marketing viewpoint, provides an
efficient channel for advertising, marketing and even direct distribution of certain goods and services (Hoffman
and Novak, 1996). Certain authors argue that the Web can save companies up to nine-tenths of their advertising
budget (Potter, 1994; Verity and Hof, 1994). According to Kassaye (1997) who undertook a Porter (1985)
analysis of the effect of the World Wide Web on agency-advertiser relationships, many companies are likely to
use computer design studios and boutiques or resort to producing in-house advertisements.
What does this brave new world of marketing communications have to offer marketers? First of all it offers a
distinct change from the traditional one-to-many marketing communications model that is currently effective
for mass media (Figure 3). There is no interaction between consumers and firms in this environment. The
communications model outlined by Steuer (1992) and Hoffman and Novak (1996a), explains that in the
mediated model, the primary relationship is not between the sender and the receiver, but rather with the
mediated environment with which each party interacts. The important factor here is the chance the users get to
participate in feeling and modifying the form and content of the environment. The depth of the experience is
largely what a person feels in the hypermedia CME.
Figure 4 shows the range of communication possibilities, with consumers being able to put product-related
content in the medium, ranging from gardening issues (for instance, garden web sites) to toys (for instance,
Lego, Barbie Dolls and Teletubbies) to television shows (Friends and The X-Files). Internet presence gives
firms a non-intrusive form of advertising (at present), largely because many computer users do not have access
to sound or video clips usage. The whole premise of advertising on the Internet relies on involvement, the way
in which customers 'flow' through the medium and the use of structured activities, offering individuals a
completely different form of experience compared to standard television advertising. Potentially there is also
the chance for instant fulfilment through being able to place an order for a particular good or service. Earlier,
this paper expressed the role of involvement in advertising in achieving a longer-term effect for a particular
brand (Hollis, 1995). The Internet offers just such a possibility, with Net surfers being able to delve deeper into
the Web pages for further information and to select favourite sites as 'bookmarks'.
THE INTERNET, POSTMODERN MARKETING & GLOBALISATION
Much of the discussion on postmodern marketing emphasises the growing importance of digital/communicative
technologies, communication, consumption, images/symbols and hyper-reality (Venkatesh et al., 1993).
According to Cova (1996), postmodernism champions individuality and the modern quest for liberation from
social bonds. The fragmentation of society shows the consequence of postmodern individualism. He argues
that: 'Paradoxically, the postmodern individual is both isolated and in virtual contact with the whole world
electronically. Postmodern daily life is characterised by ego concentration, encouraged by the spread of
computers.'
Figure 5, adapted from Cova's article, shows the juxtaposition of opposites in the postmodern world. Cova goes
on to say that in postmodern marketing one has to offer the following.
l
One-to-one marketing with the use of IT. Unpredictable and individualistic customers could be retained
this way.
l
Image
Hyper-reality is the potential to offer experience similar to Euro-Disney's theme parks. Technology offers
the postmodern consumer the chance to be a participant in customising his or her own world.
l
Marketing images
The era of postmodern marketing relies on image marketing (Venkatesh et al., 1993), emphasising
cultural meanings and images. Cova (1996) feels that image marketing and brand management are closely
related. Rather controversially he argues that we are witnessing the obsolescence of advertising: `In
postmodern markets, advertising simply misses the fundamental point: to be an interactive experience of
co-creation of meaning for the customer. '
l
Fragmentation
Meuller-Heumann (1992) outlines in his important paper why market and technology shifts in the 1990s
are pointing towards market fragmentation and mass communication. The fragmentation of markets is
likely to herald a greater emphasis on smaller and more unstable segments.
In many respects it could be argued that this type of postmodern world is not quite a reality for many people.
Authors such as Clegg (1991) would argue that we are seeing signs of modernity, with seamless societal
changes taking place in different cultural contexts rather than complete paradigm changes. It would be facile to
tackle this contentious issue in this paper. Nonetheless, some of the arguments put forward have relevance in
this new world of almost instant global communications.
Ironically, much of the postmodern emphasis on fragmentation and individualism seems to be borne out by the
experience of companies on the Internet. For instance, companies such as Tripod and Geocities (Hof et al.,
1997) have made a virtue out of helping to build 'community-type' discussion areas, which allow
communication over large geographic areas. Tripod offers editorial content and discussions are grouped into
fields such as politics, health and money. The target audience are the 'twenty-somethings'. Individuals are
encouraged to design and build their own Web pages. In these locations, larger companies such as Ford, Visa,
Sony and Microsoft take banner advertising space. The demographics of the community play a large part in
segmenting the advertising spend for the larger companies as the target group are mainly aged 18-34, living in
the US and 75 per cent male. Another interesting example of this community-based discussion area is provided
by Geocities, which has formed a 'virtual' city allowing communities to develop and flourish, eventually
exchanging or selling homes and also settling into new neighbourhoods. Armstrong and Hagel (1996) discuss
the merits of on-line communities and explain how the Garden Web area has evolved into a very successful
community, where ideas are shared, plants are exchanged and links with related businesses and resources are
forged. In this sense, it is a powerful area for an advertiser to be in, rather than in a simple site that allows only
transactions.
THE INTERACTION OF ADVERTISING, THE INTERNET GLOBALISATION
The discussion above shows the complexities that are beginning to develop in marketing and advertising. It
appears that there is a move towards individualism and fragmentation. Cybermarketing is allowing both smaller
and larger companies an effective marketing medium for communication on a global basis. For multinationals,
the model appears to move from information to transaction (Figure 6).
3M's Web site gives information on its products and news about innovations and, at the same time, the
company is making forays into selling simple products. Internet start-ups or smaller companies, on the other
hand, work towards a transaction/information model in order to minimise cost, as shown in Figure 7. They can
then continue to spend more time building brand image, providing product support and winning repeat
purchases where possible. A small business success story in this area is a company such as Jack Scaife butchers
in Keighley in Yorkshire (Oldfield and Burnham, 1997). The Internet offers ample opportunities for new
product diffusion, the possibility of adapting products and services to meet local requirements and niche
product selling by smaller companies to an instant global audience. Jack Scaife butchers sell cured pork over
the Internet and receive a substantial number of e-mails from Hong Kong and Japan.
Currently, the population on the Net is quite diverse with 45 per cent of the adults surfing the Net aged 40 or
over, and 32 per cent between 18 and 29. In fact women make up 41 per cent of the Net population. In general,
the adult Net users are more affluent and better educated than the population as a whole. More than 42 per cent
have household incomes greater than £35,000 compared with 33 per cent of the overall population, and 73 per
cent of Net surfers have attended college versus 46 per cent of the total population (Hof et al., 1997). Given the
general scenarios of globalisation, market fragmentation and the increasing use of CME, further research should
more explicitly profile the relationship between advertising effectiveness and the use of the Internet. Such
research could be planned around the following propositions.
P1. Individuals are likely to cluster their preferences for brands along 'community-based' activities
on the Internet.
The discussions above allude to the fact that community or 'tribal' groups are beginning to emerge on the Net.
For advertisers, it is important to be able to understand these groupings as potential segments for certain brands
or groups of brands. The research design to test this proposition would collate data from specific community
groups and monitor any brand preferences within that group.
P2. The fragmentation of markets will mean the fragmentation of the advertising of brands into
several different segments on a global basis.
The above proposition is more contentious given the current views that brands are powerful entities, having a
major pull on consumers in cosmopolitan cities (Willman, 1997). The main argument, however, is whether the
brands are evolving along the lines of groups mentioned in P1. Some analysis along these lines would provide
serious insights into the current vogue for integrated marketing strategies. Would parallel branding strategies be
important?
P3. Small companies will be able to advertise more effectively than before, potentially eroding the
market share of larger companies.
This proposition is based on the cheapness and ease of using the Web. It is entirely possible that small
companies will grow at the expense of the larger concerns as they are likely to be more flexible and can
advertise cheaply on the Web. In fact, Kassaye (1997) argues that the new medium challenges the advertiseragency relationships and allows a new breed of computer programmers in management information systems
departments a chance to develop excellent Web sites. This overturns the norm of advertising where having a big
brand and hence more money to spend helps to create effective advertising. Big brands will obviously continue
to have an impact, but the segments will become much more competitive and fragmented. Clark (1997) argues
that as just one Web 'store' reaches the world, markets that are too small on a local basis can become viable on a
global one.
The big brands, nonetheless, will have the financial muscle to offer varied Web sites and a great deal of passive
advertising. It would be useful to explore how the balance of power is changing.
P4. Increasingly, advertising effectiveness will rely on likeability enhanced by greater involvement.
This degree of involvement will be provided through Internet access.
This goes back to the earlier discussion on the need for participants to like the advertisements (Leather et al.,
1994), as well as the need to be involved (Hollis, 1995). Hollis argues that liking is not enough and that the role
of involvement and memory is important. If, however, through access such as e-mail, people are 'leaving a
piece' of themselves in the virtual world, then direct involvement with the brands in the form of communication
and discussion with peer groups will add to the development of like (or dislike) for a brand as well as
embedding into memory. Hoffman and Novak (1996b) discuss the concept of 'flow' and the idea that
individuals 'lose' track of time on Web sites, becoming more involved in the interactive environment than in the
physical surroundings. When in 'flow', individuals learn, explore, participate and, above all, spend more time at
sites which offer a positive experience.
P5. Multi-media and animation will play a greater part in developing effective advertising.
The new technology now allows for animation and 'dancing' logos to be displayed. Explorers may well be
attracted and involved with such sites, adding to the effectiveness of advertising. Brands would need to offer
'memorable' experiences encompassing sight, sound and 'fun', with the possibility of simple games to enhance
the memory process.
P6. Advertising on the Internet will allow for more effective data collection on cause/effect
relationships.
This proposition is put forward, namely because registration or subscription to a site allows demographic and
other information, as well as e-mail addresses, to be collected, allowing for better analysis of data and better
targeting. This could become a virtual circle for advertising effectiveness (Paul, 1996). This proposition needs
to be tempered by the fact that many people may see this as an invasion of their privacy. Nevertheless, on the
Web it is currently possible to search for e-mail addresses on a worldwide basis.
Through further research into P4 to P6, some interesting results could be obtained, extending and enhancing
many of the relationships between advertising style and the effect of a CME. Further hypotheses could then be
developed as extensions of P4 to P6 as suggested below.
P7. Advertising effectiveness will be enhanced by individual learning and liking for a brand
through use and effective interaction within a CME.
In this proposition, studies surrounding the fluency of use of a CME by the participants, including good Web
designs (from the point of ease of use, interest and likeability) would help to create a better understanding of
advertising effectiveness. The ways in which Internet advertising complements conventional advertising could
also be ascertained.
P8. Advertising effectiveness within a CME will be dependent on optimum use of state-of-the-art
technology on the part of the consumer.
This proposition would attempt to uncover the current problem of the type of accessibility to a CME. Most
people replace their computers infrequently and therefore the computer environment experienced by one
household may be substantially different from another household. The speed and state of the technology is
therefore likely to impact on how companies can create effective advertising and also on how it is received and
perceived at the other end.
CONCLUSION & IMPLICATIONS
Individuals learn and respond to various stimuli. What they know and understand affects how they interpret
messages and advertisements. Considerable strides have been made in assessing the impact of television
advertising and some studies are often tightly controlled in laboratory-based situations. If we accept the point
that an individual processes information according to his or her shared understanding, which constitutes
memory, then it is important to try to ascertain the impact of community-based or individual interaction on
advertising effectiveness. Previously, most mediums did not allow the development of such interaction,
whereas a CME does. The way these processes occur and the way individuals interplay within this environment
would provide us with a wealth of information which could fundamentally alter our perceptions of the current
one-to-many advertising model. Advertisers take time to learn about their markets and try to alter their markets
by advertising and creating and sustaining brands. It would be interesting to gauge, in a more 'hands-on'
manner, whether the range of potential behaviour of consumers has changed, or indeed is changing in a
particular direction. This would allow marketers to pre-empt certain changes already in motion within the
marketplace.
The time has come for a new look at the concept of advertising effectiveness, encompassing a different
unexplored paradigm. The markets appear to be fragmenting as we move into the so-called postmodern world.
How do we deal with advertising where image could be everything and hyper-reality could rule?
ACKNOWLEDGEMENT
I would like to thank the anonymous referees for helping to improve this paper and Tim Ambler for his useful
comments and pointers.
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© Advertising Association
http://www.warc.com
NOTES & EXHIBITS
Ashok Ranchhod
Ashok Ranchhod is associate professor and head of marketing at Southampton Business School. He has also
worked at the Nottingham, Sheffield and Open University Business Schools. Before working in academia, he
ran a plant biotechnology company. For many years he has been an external examiner at various business
schools throughout the country. He is now the senior examiner at the Chartered Institute of Marketing for the
case study paper (analysis and decision). He has run senior manager programmes for several multinational
companies and published widely on marketing subjects in various journals. His current interests surround
marketing strategies for biotechnology companies and effective market orientation with the use of technology.
FIGURE 1: THE IMPACT OF TECHNOLOGY ON MARKETING
FIGURE 2: INVOLVEMENT FACTOR (30 UK ADS)
Source: Hollis, 1995
FIGURE 3: TRANSITIONAL ONE-TO-MANY MARKETING COMMUNICATIONS
MODEL FOR MASS-MEDIA
Source: adapted from Hoffman and Novak, 1996a
FIGURE 4: MEDIATED COMMUNICATION MODEL
Source: adapted from Steuer (1992)
FIGURE 5: POST-MODERN MARKETING AS A JUXTAPOSITION OF OPPOSITES
Source: Cova (1996)
FIGURE 6: EVOLUTIONARY PATHS OF A WEB-SITE
Source: adapted from Quelch and Klein (1996)
FIGURE 7: INTERNET START-UPS
Source: adapted from Quelch and Klein (1996)