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Sample Research Proposal on Economic Analysis of Television and Internet Advertising

INTRODUCTION

 

This paper presents a proposal to research and explore the economic contributions of television and internet advertising in UK organizations. It discusses concepts of advertising, specifically TV and Web ads, and evaluates their strengths and weaknesses, in terms of use and appeal.

 

This current study proposal is based on the rationale that different types of markets and industries are growing because of globalization and the introduction of new information technologies, as well as pioneer ones such as the Internet. Traditionally, marketing is being utilized with the use of traditional media – print, television, and radio. It is also being executed in a personal fashion whereas for instance, a salesman visits your home or a salesperson convinces you to buy a certain item or product. Also, traditional marketing involves quantity, low-cost, stability, control and mass market research (SRI International, 2001). The geographic focus was only limited on a national scale (SRI International, 2001). However, due perhaps to the fact that everything changes, marketing along with management has evolved considerably over the years. Today, in the new millennium, the focus has shifted to flexible specialization, strategic alliances, outsourcing and project teams (SRI International, 2001). Furthermore, the key requirements are now centered in quality, speed-to-market, flexibility, innovation, networks, customer service and customization (SRI International, 2001). In addition, nationalization has been replaced by globalization. With these changes, new technologies have never been more widely adopted. Traditional economy has been replaced by modern ways of marketing and management. As Castells (2000) stated, this "new economy'' is fundamentally distinct from the traditional model, in that success now depends upon the effective use of information, the implementation of global concepts, and the creation of networks among economic agents. This involves knowledge, business organized on a global scale, and interaction among various business networks.

 

With those in mind, should a faster, wider in scope and cheaper medium such as the Internet should replace traditional media, specifically television? One of the uses of media is for advertising, and obviously, the Internet itself shows the evidence that the use of advertising online is increasing. Popular brands such as Coca Cola, McDonald's, FedEx and many more have been online for some time and integrates different types of advertisements in their websites, and sometimes even put banner advertisements on other websites. However, these companies still continue to use television advertisements, showing signs that both medium are important tools for marketing. If so, then what is the difference between the two medium in terms of advertising use? There are many other questions presented in this paper as we go on. The basis purpose of this study is to able to assess the differences and similarities between internet and television advertisement and be able to determine their economic impact on organizations. Through this purpose, it is hoped that the study will be able to present a clear and concise conclusion, specifically, which medium is advantageous and mostly preferred by companies, and also the perhaps both has the same appeal.

 

BACKGROUND OF THE STUDY

 

The Concept of Advertising

 

 

Advertising is known as the means of making of a representation in any form in connection with a trade, business, craft or profession in order to promote the supply of goods or services, including immovable property, rights and obligations (Consumer Council, 1999). In another definition, it is seen as messages that "impart information about products which consumers use to make brand choices" (Frith, 1997). Many organizations, may it be profit or non-profit, public or private are trying to use or create their own styles of advertisement for every purpose they wish to achieve.  According to Leiss (1972, 122), "advertising has been recognized as a major vehicle of social communication in modern Western society." 

 

One of the common characteristics of advertising is that it circulates knowledge and promotes not only the product, but as well as the image of the company that owns the product brand (Cronin, 2000). Advertising also associates a specific product with one or more variables so as it can recalled easily. It associates products with symbols that exemplify values, group feeling, prestige, status, power, achievement or just plain hedonistic pleasure (O'Shaughnessy and O'Shaughnessy, 2003). Whatever a product is associated with affects perceptions of the product (O'Shaughnessy and O'Shaughnessy, 2003). Association of different things or situations to a product may have a powerful impact on the consumer. For instance, if a shirt advertisement advertises over and over that their products are soft, that brand name will be associated with the word 'soft' in no time.

 

            Another interpretation is that advertising can channel desires, and the channel communicates with the culture of the targeted population. It is simply one of a number of attempts to load objects with meaning - an ongoing conversation within a culture about the meanings of objects (Twitchell, 1996). For instance, a person who still does not know about a 'perfume' brand and then finally came across its advertisements, depending of the culture of that person, it can develop a desire that could make him want that product. Frith (1997) stated: "Embedded in advertising's messages about goods and services are the cultural roles and cultural values that define our everyday life. The products we consume express who we are, they are cultural signifiers" (p.3).

 

But because of that power, to shape consumer consciousness and to be able to trigger customer behavior by association with culture, advertising has been subject to frequent complaints and criticisms, mostly on issues about the harms of misleading and fraudulent advertising to the consumer (Consumer Council, 1999). There were complaints mainly about the deceptive and misleading nature of the advertising claims (Consumer Council, 1999). Advertising is being seen as a threat because by being deceptive, it can violate several consumer rights, making the consumer who purchased the product a victim. Advertisements can trick consumers by putting claims in ads that are not true or unproven (Maine Attorney General, 2004). It can even trick customers about discounts that are not true or about free items that are not actually free (Maine Attorney General, 2004). Why deceptive advertisements in televisions are subtle and comes only in small cases because of television advertisement regulations, the case in the Internet is different. Personal experiences made us know about the prevalence of free items or raffle winners in the net that are not actually true. The advertisements just want people to visit their websites, using tricks such as congratulatory greetings and free items.

 

            Advertising can be utilized in many ways. An organization can use a number of forms to advertise their products. It can either be through print media (newspapers or magazines), radio, television, outdoor advertising, billboards, cinemas and direct mail (Ford-Hutchinson and Rothwell, 2002; Hofstrand, 2005). Those were the common types of advertisings, but over the past few years, after the upsurge of internet use, there has also been a growth of internet advertising. However, television advertising still remains the dominant medium for organizations (Ford-Hutchinson and Rothwell, 2002).

 

Television Advertising

 

 

            Television advertising remains the most prevalent type of advertising being used by organizations (Ford-Hutchinson and Rothwell, 2002). The reason for this is because its ubiquity, it entertainment value and the generally important role that television plays in people's lives (Ford-Hutchinson and Rothwell, 2002). Furthermore, television is still more widely use than any latest gadgets or electronic devices. According to Katz (2003), almost every household in America has a television set, and two-thirds (75%) have two or more. Also, total TV consumption hours have continued to grow, with the average U.S. household estimated to spend 1826 hours with its TV in 2005 (the equivalent of more than five hours per day) (IBM Institute for Business Value, 2006).

 

            Television advertisement is proven to be effective by numerous studies. In a specific study, it was proven that television advertising were effective and cost effective in generating calls to a national Quitline by Maori in New Zealand (Wilson et al, 2005). In another study, Scoop.net (a media site based on citizen journalism and voting by its members) conducted a weekly hot topic poll regarding what form of advertising is most effective and found out that television advertising was still the most effective means of promotion available today (Cefail, 2006).

 

Katz (2003) stated that advantages of television advertisement include: the opportunity to use sight,sound,color, and motion in commercials; most pervasive medium; and wide reach of audience.  However, it also has few disadvantages such as: high costs; brief exposure time; the cluttering of spots in the airwaves; and the difficulty to find a good spot or schedule time.

 

 

 

 

 

Internet Advertising

 

            Internet advertising or sometimes called, as web advertising is a type of advertising in which a person can control or customize the information according to his/her interest with the use of internet (Ming-Yi, 2001).  Internet advertising provides instant interaction and connection to the consumers since the buyers or the audiences are the one who decides on what ad to view favorable to the field of their interest. The consumers are given the power to control the opportunity in establishing an on-line participation through the use of internet (Ming-Yi, 2001).

            In a research that was conducted by Brown (2003), it was found that Internet use is growing, specifically in Europe. The study found that Internet penetration is approaching 50% of the total population in the United Kingdom and Germany, and nearing 40% in France, Spain and Italy (Brown, 2003). Furthermore, it also found that the Internet accounts for 10% of time spent consuming media (Brown, 2003).

            Several advantages of advertising online are that: Web advertisements can target particular market segments, minimizing wastage or promotional costs; collecting information on individual users is possible, building a detailed profile of their online preferences; online promotional strategy can target the individual who is accessing the information if data on them has been collected; online promotion is delivered globally, 24 hours a day, 7 days a week, 365 days a year; Online promotional campaigns can be implemented quicker and often for less cost than many offline promotional campaigns; and the customer chooses to be involved in the promotional process (Zeff and Aronson, 1997; Hanson, 2000; Hsu, Murphy and Purchase, 2001).

 

            On the contrary, online advertising also has its disadvantages. The advantages are: customer can be irritated with pop-ups or spam mails; confusion among novice users; and that it is still less used compared to television and radio (Katz, 2003).

 

Advertising and Economic Growth of an Organization

 

Advertising can either be positive or negative, but no matter which among the two will prevail, it has a significant impact on economy. For instance, the Economic Document Systems Foundation (2005) reported that the ad industry will generate $5.2 trillion in direct and indirect spending in the United States alone, or 20.5 percent of U.S. economic activity in 2005, citing from the projections released by a coalition of leading ad trade associations. In a media study conducted by Yankelovich Partners and Harris Interactive, it was found that advertising during a sluggish economy clearly creates a competitive advantage, according to the study, with a majority of executives agreeing that seeing a company advertise during slower times makes them feel more positive about the company's commitment to its products and services (LeClaire, 2006). They also found that most managers see advertising as a "long-term strategy" for firms. One of the respondents stated: "If a company is not communicating with customers when they enter the market, then that company will not be considered in the buying decision" (LeClaire, 2006). Basically, the study shows that the use of any advertisement during any economy can produce customer loyalty and a long-term competitive advantage (LeClaire, 2006).

 

            Furthermore, in a specific study that evaluates the impacts of brand and generic advertising on meat demand, it was found that branded beef and poultry advertising have increased total meat consumption (Brester and Schroeder, 1995), showing signs that advertisements have direct effect on the economic condition of a particular product or industry.

STATEMENT OF THE PROBLEM

            The problem that will be addressed in the study is the comparison of economic impacts of two advertising medium – television and internet. The study will answer the following research questions.

1.      What are the similarities and differences of TV and Internet advertising?

2.      What are the advantages and disadvantages of TV and Internet advertising?

3.      How does advertising – TV and Internet affect and contribute to the economic growth and success of an organization? Which is more effective?

4.      What is the most appropriate type of advertising strategy that a business organization should apply?

OBJECTIVE OF THE STUDY

            The aim of the study is to draw a conclusion about which advertising medium is economically better for an organization – television or internet. The following specific objectives will be addressed:

1. To identity the characteristics of the contemporary types of advertising in relation to economic growth and success of an organization.

2. To identify the benefits and drawbacks of TV and Internet advertising in affecting the relationship pattern of consumers and organization. 

3. To investigate how TV and Internet can help overcome the obstacles of competition, thus contribute to the success of the organization.

4. To study the most appropriate means of advertising for supporting the economic success of an organization.

 

SIGNIFICANCE OF THE STUDY

 

The need to identify the most effective way to advertise a product/service or organization itself is one of the most basic foundations in acquiring popularity. Advertising entails high sales assurance that can be delivered using efficient advertising principles and applications. Implementation of efficient advertising strategies and its appropriate choice in type is crucial in ensuring economic success in the organization. In this regard, this research study presents an understanding of the characteristics of TV and Internet advertising as one of the most popular techniques used by many organizations today. The evaluation of its effectiveness in the economic performance of the organization is presented. Similarly, the study clarifies how TV and Internet advertising strategies provide advantages/disadvantages to both organization and consumers. Moreover, the importance and significant functions of TV and Internet advertising are highlighted that enable them to meet the standards and demands of the consumer market. As such, the completion of this dissertation will provide understanding of the concepts presented so as to generate data and information that every organization could use in order to come up with plans and designs that will strategically position them in the highly competitive, diverse, and complex business environment that is experienced at present.

 

SCOPE AND LIMITATION

 

This dissertation in particular is descriptive and exploratory in approach. The exploratory purpose of this project is concentrating on the characteristics of TV and Internet advertising particularly their advantages and disadvantages as well as the direct and indirect affect and influence in the economic growth and success of the organization. As such, it is but necessary to limit the scope of the study for future researchers' ease in using this study as a reference in their future academic endeavors that this research extensively or partly answers.

 

The researcher is primarily concerned with the characteristics of TV and Internet advertising – similarities and differences, its advantages and disadvantages, the effects on the economic growth and success in the organization, and the overall appropriateness and effectiveness of the type of advertising strategy used. Further, the study gives light on the specific functions of TV and Internet advertising practices in the business organization focusing on the roles in economic growth and success.

 

METHODS AND PROCEDURES

 

 

            Primary and secondary research will be conducted in the study. In primary research, the study will survey consumers and organizations about television and internet advertising. A structured questionnaire will be developed and it will be used as the survey tool for the study. It is planned that the questionnaire will have a 5 point Likert Scale, as well as ranking questions. Data on both medium will be compared and evaluated using SPSS.

 Aside from survey, a secondary research will also be conducted in the study. Sources in secondary research could include previous research reports, newspaper, magazine and journal content, organization statistics, etc. Sometimes secondary research is required in the preliminary stages of research to determine what is known already and what new data are required, or to inform research design. In this paper, existing findings on journals and existing knowledge on books will be used as secondary research. The findings from the journals and books will be evaluated in the data analysis. Types of research journals chosen are all related to issues in advertisements, specifically television and internet advertising. Basically, interpretation will be conducted which can account as qualitative in nature.


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