Internet Advertising: Comparison of Nigeria and Hungary

Internet Advertising: Comparison of Nigeria and Hungary Abstract Despite the marginal difference between Nigeria and Hungary, the internet develops a relationship that can be exploited. Internet users of both countries are dominated by youths, and thus are the most accessible to internet ads. Internet advertising also termed online advertising or internet marketing or web advertising is simply the making available of advertising messages and marketing communication through the internet via the web. Internet advertising which was introduced several years after traditional advertising (banners) in the 1990s now suppresses all other advertising medias and hence constitutes a significant channel for the majority of firms. These firms range from small to big sizes, national and multinational, service providing to manufacturing enterprises (Restaurants to ship manufacturing agencies). Internet advertising now shares a position in the context of marketing communication strategy planning and implementation. It is vital for organizations considering internet marketing strategy to effectively associate each component reason being that, with the global market place, it is important for entrepreneurs and marketers to be critical of what is most beneficial and meets their needs to the internet marketing strategy intended for use. Byusing the standard advertising program process as a base,it is simple to outline the characteristics of the Internet which abusiness must take into consideration when planning a Web advertisingcampaign (Kotler, 1997). Without trying to dispute earlier findings in this thesis, the work presented attempts in it own way to highlight some comparative ideas of internet advertising between Nigeria and Hungary thus stating the aims of this paper based on internet users social context on the effectiveness of internet advertisement. By using primary material from books and other sources, the idea of internet advertisement is identified. And by considering other publication, some conclusions are generated for the better understanding of this piece. By examining the topic of this thesis, its extensive nature is revealed. Three fields of study are mentioned and are dealt with accordingly -Marketing, information technology, and advertisement (internet advertising). As broad as each of these could be, the presentation is quite short and straight to the most essential. The study depicts the differences in the attitude of internet users to ads. The analysis obtained from input sources reveal a significant relationship between the type of activities of users through which they come into contact with internet ads in each of the two countries (Nigeria and Hungary). 1 Introduction 1.1 Background of Study The growth in Internet Advertising has paved its way and settles comfortably in the global world of business due to internet innovations. Further more its effects, impact and usefulness can be observed social aspect of human activities thereby creating greater opportunities for a more developed and diversified recreation. The Internet or World Wide Web has quickly become the most effective way for businesses to advertise their products or services to expected consumers. Some Web sites such sell advertisement space for sponsoring and by so doing they profit highly from the increase of advertising on the Internet. The number of people with internet access and internet services is growing continuously at a geometric rate and with internet advertisement potential customers can view these advertisements thereby contributing to the maximum level of business profits. Recent studies on internet advertising focus more on empirical works as well as theoretical structures there by investigating the role of some factors in the success of internet advertising, none the less it is necessary to present some significant measures employed in this thesis to quantify advertising effectiveness. According to Pavlou and Steward (2000), advertisement has a direct effect to consumers and therefore considered as an independent variable while consumer response is the dependent variable. They further explain the nature of the highly interactive environments taking into account other factors such as online context in which advertisement takes place in order to render this study more insightful. Incorporated here are many aspects of internet advertisement context as types of internet activities and users social context in the study of responses to internet advertisement. Internet advertising is rapidly growing and advertisements have become more apparent in our Internet usage. When advertising on the Internet, both the businesses and the web sites (search engines) profits. Businesses profit from the use of internet advertising by minimizing cost compared to standard advertising which is a lot more expensive. Internet advertising raises awareness, conveys advertisers messages and enhances brand perceptions and with greater advertisement exposure inflicts even greater impact. Responds to this advertisement differs considerably by different individual in different Geographical locations and cultural background. An AdHoc study conducted by Gemius in cooperation with Sanoma Budapest proves that most Internet users in Hungary have a positive attitude towards online advertising. Moreover it shows what their behavior is like in response to online advertising and the perceived image of the advertised companies. The respondents were also evaluating different formats of advertisements in the survey, indicating the ones that they know best and the favorite ones. The research was conducted on the Internet in the form of a pop-up survey (random sampling) on May 2006. 67% of the respondents declared that they accept online advertisements as the price for free access to web sites. (International Operations Department, Press release June 30, 2006) Internet usage in Nigeria is an important issue with the average student using 10.5 hours per week and the total population averaging 3.5 hours per week. Internet usage in Nigeria has consistently grown to 11million internet users as of June 2009 according to the International Communication Union (ITU) report. Various types of broadband bring the internet to our door steps such as Asymmetric Digital Subscriber Line (ASDL), Asymmetric Digital Subscriber Line (SDSL), cable broadband, wireless, satellite, Local Loop Unbundling (LLU) etc With the accession of the internet, came an easier method of communication, transmission of information to the public and hence the rise of the internet advertisement. Advertising on the Internet can be viewed as a social contract between advertisers and Internet users. Every individual comes across advertising through multiple channels; either outdoor: through fliers, bill boards etc or indoor: through the internet, A reason why todays market is highly dominated by advertising. Based on the fact that we live in a globalized world, advertising is recognized in every country in its own structure with respect to its culture, consumer demand or requirements. 1.2 Aims and objectives This thesis outlines and compares how internet users in Nigeria and Hungary respond to internet advertisements with focus on the technical aspects, social networking and simple basic adverts in websites. In addition I am searching for various answers and perceptions of what people from these different countries think about these adverts and the effect it has on them in a cultural perspective considering the fact that both cultures are not only socially different but economical and educational as well. In the first part of this study, I am researching how technical aspects, such as social networking and website adverts in Nigeria and Hungary. It is followed by an evaluation of how Nigerians and Hungarians respond to internet in the second part. The third part focuses on a research for: the changes the internet brings in Nigeria and Hungary for example is the internet improving industries such as the banking sector or being an important educational tool for students? Is it the centre of attention for businesses? Finally, the fourth part is the conclusion drawn based on the findings of the aforementioned research. 2 Literature review Under the literature review, I will be considering a thorough review of the already existing literature on the subject of internet advertising which is highly important for the continual understanding of the sections in this thesis. Picking the pieces and fitting them together I will build a concrete piece on the above mentioned topic starting with defining the parts that make up our topic, considering the social and technical aspect of the internet, advertising and last but not the least marketing. 2.1 The internet The birth of the internet did not come as a surprise, may be to the common man in the streets but definitely not for the scientist who had been expecting something new, fresh, cheap and friendlier. It emerged in the early 1960s as a way for the US department of defense to create a secure means of communication in case of uncertainties. It evolved from Advance Research Agency (ARPA) in 1969 to ARPANET for the civilian sector and MILNET (military network) â€Å"(Jeffrey F. Rayport et al. 2001)†. In the 1980s ARPANET was renamed National science Foundation Network (NSFNET). The progress of this development proceeded in 1989 with the creation of a more efficient way of sharing information by defining the Hypermedia Protocol (HTTP- Hypertext Transfer Protocol) which is the standard addressing format URL (Uniform Resource Locator) and the programming language HTML (Hypertext Markup Language) which has become the basis of World Wide Web (WWW) which is universal and the most used part of the internet to access multimedia e.g. text documents, graphics, videos etc â€Å"(Jeffrey F. Rayport et al. 2001)†. In 1993, a team led by Marc Anderson developed a new piece of software called â€Å"Mosaic† as the first internet browser after which other browsers were introduced, like internet explorer by Microsoft which became the most prominent â€Å"(Jeffrey F. Rayport et al. 2001)†. After these developments, todays internet has not only brought technology but also affects the way things are done world wide. It is continuously changing to the extent that it has taken almost all diversification and stems all changes in world business, revolutionarising the way business is done, the concepts between business and consumers. 2.2 Overview of the general background of advertising Advertising is a collective term for public announcements designed to promote the sale of specific products or services. It is a form of mass selling, employed when the use of direct, person-to-person selling is impractical, impossible, or simply inefficient. Advertising techniques range in complexity from the publishing of simple notices in the classified-advertising columns of newspapers to integrated marketing communications, involving the concerted use of advertising in newspapers, magazines, television, and radio, and on the internet which is our main focus. Advertising dates back to the Christian era. Advertisements transited from the outdoor signs as paintings on wall of buildings that were very sight captivating to company trade marks which were two or three dimensional picture or signs in the 16th centuries. Around the 1880s, there came Mail orders and pamphlets and in late19th century, many American firms began to market packaged goods under brandnames. Previously consumers had not been aware of or influenced by brand names. The first product that had brand name was soap products. In the 1880s a fewbrands came out and they were Ivory, Pears, Sapolio, Colgate, Kirks AmericanFamily and Packers. Not long after brands such as Royal baking powder, Quakeroats, Bakers chocolate, Hires root beer, regal shoes, etc were nationally advertised. 2.2.1 Stages of advertisement The major goal of advertising is to generate awareness of a business and its products. Once the business reputation is established and its products are positioned within the market, the amount of resources used for advertising will decrease as the consumer develops a kind of loyalty to the product. Targeting the audience, product concept, communication media, and advertising message are the core elements of an advertising strategy, and are often referred to as the creative mix. Again, what most advertisers stress from the beginning is clear planning and flexibility. And key to these aims is creativity, and the ability to adapt to new market trends. Target consumer is a complex combination of persons. It includes the person who ultimately buys the product, as well as those who decide what product will be bought (but dont physically buy it), and those who influence product purchases, such as children, spouse, and friends. In order to identify the target consumer, the following should be considered; Demographics(Age, gender, job, income, ethnicity, and hobbies.), Behaviors (awareness of the business and its competition, the type of vendors and services the consumer uses, and the types of appeals that are likely to convince the consumer to give the advertisers product or service a chance.), Needs and Desires (determine consumer needs in practical and self-image terms.) The product concept grows out of the guidelines established in the positioning statement. How the product is positioned within the market will dictate the kind of values the product represents, and thus how the target consumer will receive that product. Therefore, it is important to remember that no product is just itself, but, as Courtland L. Bovee and William F. Arens stated in Contemporary Advertising, a bundle of values that the consumer needs to be able to identify with. Whether couched in presentations that emphasize sex, humor, romance, science, masculinity, or femininity, the consumer must be able to believe in the products representation. The communication media is the means by which the advertising message is transmitted to the consumer. In addition to marketing objectives and budgetary restraints, the characteristics of the target consumer need to be considered as an advertiser decides what media to use. Advertisers can choose from the following media categories such as Print, Video, World Wide Web, Direct mail, outdoor advertising-Billboards, advertisements on public transportation (cabs, buses). After deciding on the medium that is 1) financially in reach and 2) most likely to reach the target audience, an advertiser needs to schedule the broadcasting of that advertising. The media schedule, as defined by Hills, is the combination of specific times (for example, by day, week, and month) when advertisements are inserted into media vehicles and delivered to target audiences. An advertising message is guided by the advertising or copy platform, which is a combination of the marketing objectives, copy, art, and production values. This combination is best realized after the target consumer has been analyzed, the product concept has been established, and the media and vehicles have been chosen. At this point, the advertising message can be directed at a very concrete audience to achieve very specific goals. Hiam and Schewe listed three major areas that an advertiser should consider when endeavoring to develop an effective advertising platform: the unique features of the products, how consumers will evaluate the product, rank of competitors in the eyes of the consumer, their weaknesses in their positions and their strengths. Copy: When composing advertising copy, it is crucial to remember that the primary aim is to communicate information about the business and its products and services. Many companies utilize a theme or a slogan as the center piece of such efforts, emphasizing major attributes of the businesss products or services in the process. But as Hiam and Schewe caution, while something must be used to animate the theme †¦care must be taken not to lose the underlying message in the pursuit of memorable advertising. Art work and layout: Small business owners also need to consider the visual rhetoric of the advertisement, which simply means that the entire advertisement, including blank space, should have meaning and logic. Most industry experts recommend that advertisers use short paragraphs, lists, and catchy illustrations and graphics to break up and supplement the text and make the document both visually inviting and easy to understand. Remember, an advertisement has to capture the readers attention quickly. 2.2.2 Internet advertising Internet advertising is a message delivered to people by placing adverts on Search engines, Social networking websites such as Facebook, e-mails, pop ups etc. These adverts can be seen by the whole world and are not limited to a geographical region. In this same respect, adverts are meant for the mass and there are many users of internet worldwide so the message gets spread widely and quickly thereby reaching people of different cultures and beliefs. Some of the people might be uninterested because the signs or symbols used violate their cultures. E-mails are also sent to people who are either not interested or are not located geographically in areas accessible to the products. 2.2.3 Advantages and disadvantages of internet ads The most common item that determines advantages of a product or service lies in its cost. Internet advertising packages could be available at very low costs (10 dollars per monthly subscription). Trouble free relativity could also be a great advantage internet advertisement has over other media ads, to the user and the producer, all which is needed is first of all a PC then internet service, through which you can either design a site or survey advert sites. It is could also be noticed that with internet advertisement, when advertisers get to know the age group, taste, and sex of consumers who most frequently survey their ads, site owners could easily and quickly update their pages to current consumer needs compared to other media ads which could do so only periodically. Market presentation is also easy with internet ad, product or service is designed for the younger generation or the corporate world are easily viewed by this class of persons as they make the greater proportion of int ernet users and the greatest proportion of consumers. Though a multiple advantages make internet advertisement favorable, some disadvantages could still be noticed. Internet advertisement is made better with professional help and these additional costs make some ads more expensive than others. It is disadvantageous to use only the internet as advertising medium because there are a hand full of persons who can not gain access to this new technology or they just dont have the trust in these internet ads. 2.3 Broad band connections in Hungary and Nigeria Broadband connection is a new concept used, in place of dial up connections. Broadband internet connection is faster and offers a host of advantages in them. The speed is usually faster than a dial up connection, which facilitates many operations at a time in for example watching many online live shows and movie downloads etc. There are various types of broadband offered nowadays. Asymmetric Digital Subscriber Line (ASDL), Asymmetric Digital Subscriber Line (SDSL), cable, wireless, satellite, Local Loop Unbundling (LLU) etc are some common types. Hungarys internet providers provide their services using a number of broadband which include DSL, Cable broadband, ADSL2+ and Wireless broadband. The broad band is distributed through multiple distribution channels namely; UPC, T-Kabel, Fibernet and DIGI. Hungarys broadband market experiences strong growth, Cable broadband is widely available due to the network penetration of the countrys cable operators. The broadband market as a whole experiences a significant growth as the regulators have reduced access tariffs and have introduced a wholesale system based on retail tariffs to ensure suitable margin for alternative operators. Digital cable services have been launched by a handful of the smaller cable operators and the countrys Direct To Home (DTH) market is showing fresh signs of life. The Internet access sector in Hungary constitutes the total revenues generated by Internet Service Providers (ISPs) from the provision of narrowband and broadband Internet connections through both consumer and corporate channels. Similar to Hungary, Nigeria uses ADSL, cable and wireless broadband services which are rapidly replacing the formal dial up access method. Market penetration is still low leaving room for necessary growth. Nigerians connect to the internet in many ways through Very Small Aperture Terminal (VSAT) links, Wireless microwave links internet access and Digital Subscriber Line (DSL) access. Many of these sessions are through internet cafes as very few Nigerians have their own personal computers. Mobile operators are strongly gaining growth by providing Nigerians to access the internet through mobile devices. Such service providers are; MTN, Celtel, and Glo Mobile providing internet, GPRS, EDGE, UMTS and HSDPA all across the nation. 2.4 Technical aspects of internet usage in Nigeria and Hungary Internet usage is regarded with direct reflection of the total countrys population. This would be termed the percentage rate of penetration which relates to the number of internet users per square feet of the population. Public cyber cafe of various shades and sizes are the most common method of access individuals have to the internet. In addition to that, there are internet service providers delivering direct access to individuals and businesses on a variety of platforms. There is widespread availability in urban centres, and fairly good availability in smaller towns most recently, mobile phone lines such as MTN, Celtel, and Glo Mobile provide internet, GPRS, EDGE, UMTS and HSDPA all across the nation, it is almost amazing to find internet access in some of the most remote locations in the country. According to an issue in trade invest Nigeria onBroadband in Nigeria: The revolution is coming by Jaco Maritzs; posted on Sunday, March 16th 2008, Nigerians connect to the internet in many ways but 53% of connections are made through Very Small Aperture Terminal (VSAT) links. Wireless microwave links account for 19% of internet access and Digital Subscriber Line (DSL) access are estimated to be only 14%. Many of these sessions are through internet cafes as very few Nigerians have their own personal computers. National Bureau of Statistics figures show that in 2006 less than 10% of internet users had access from the workplace and less than 4% from the home. Only 1.3% of the population own personal computers. Nigerian internet users are aged between 11 and 40 with a greater part of this population being students, business persons, and to a lower extent, the public functions giving a 7.4 % total internet population penetration. (See appendix Diagram N2) In Hungary, other than the traditional activities of the internet (emailing, browsing, reading journals online), a greater extent of Internet users use it for the leisure function of the web, job search and application, internet purchases, watching or listening to news, entertainment purposes as well. Users in Hungary vary between the ages of 10 and 69 summing a total of 34.9% internet rate of penetration. 55% of these users use the online voice transmission in communication and chatting, at least 33 percent have tried to watch television via the internet. The number of people using internet at home increases considerably, from 23% in 2007 to 28% in 2008 and 41% in 2009. Having access to the internet does not necessarily imply using it as of the 46% of home owners 10 % of them do not use it at all. (See appendix Diagram H3) 2.5 Marketing in Hungary and Nigeria Advertising is in respect to marketing, that is; people advertise to make known their products and hence gain marketing ground; therefore a vivid understanding of marketing is necessary. Customer satisfaction, as a construct, has been fundamental to marketing for over three decades and every advertisement tries to comply with this logic. As far back as 1960s, satisfying the needs and desires of the consumer stands as the definition of marketing â€Å"Keith 1960†. Interest in customer satisfaction increased through out the years till date. Several studies have shown that it costs about five times to gain a new customer as it does to keep an existing customer and these results into more interest in customer relationships (Naumann, 1995). Companies now have big investment in database marketing, relationship management and customer planning to move closer to their customers â€Å"Hill and Alexander (2000)†. These definitions demonstrate that increasing customer satisfaction affects companies directly, increases their market shares which lead to improved profits, positive recommendation, lower marketing expenditures and greatly impacts company corporate image and hence enhances their survival. The relevance of these definitions to this study indicates that customers access the internet services based on experience of use and rating is done in accordance with the internet services attributes. In this study, customer satisfaction in the Nigerian and Hungarian markets will be evaluated based on customers usage and their reaction to internet advertisements, experience of network quality, billing, validity period and customer care support. By Marketing Penetration we imply where a company expands market share in an existing market byusing existing products which could be done in 4 main ways. 1. Persuade existing customers to buy more of the same product, thiscan be done buy promotions such as 3 for 2. This make the customerfeel as if they are getting more for their money, and hopefullycould stop them from switching to alternative brands. 2. Attracting new customers to products. This can be done buyimproving the image of the product, new packaging, reducing price,or buy giving a % extra free. 3. Poaching customers from competitors. Buy reducing price, givingfreebies, and a % extra free with the product. Doing this couldincrease your market share and reduce your competitors. 4. Withdrawing other products. Buy withdrawing less profitableproducts, similar products can become more profitable, and sellmore. Marketing through internet advertising targets all already existing consumers and expected consumers both to cultivate lasting customer relationships. The internet provides a new and cheap channel for marketing through advertising. Once in the internet any customer is able to see an advert posted and many are willing to place orders via the internet by sending emails directly to the web host. According to Armstrong et al (2005), the internet is an excellent channel for communication with customers on individual basis because of its immediate and direct interaction capability. From companys point of view, a companycan enter the cyber marketing world without theintervention of any intermediaries simply by buying into the technology itself and by turning the medium into amarketing research as well as an advertising medium, interactive media also operates in territories not covered by a vendorssales force, therefore reaching the showroom and the sales pitch to the buyersremote locations simply by dropping it in the post. It can be agreed that internet marketing improves brand image of a company or products or both, hence it is a revenue earner, reliability of the country is very important for the success of internet marketing. Companies necessarily focus their internet marketing based on the gender difference and so make more money though Consumers remain uncertain. Internet marketing can be used successfully whether it is industrial products or consumer products. It is undisputable that online support is an important factor to make internet marketing a success. Companies and consumers agree that more user friendly, better key word matches would drive the future search engine marketing. 2.6 Pricing factor in internet advertising Prising in internet advertisement is a subject which can not be under minded as it involves the reason for advertising (both the advertiser and the consumer) each product or service advertised carries a different parameters depending on the desires of the individual consumer who finally decides on his/her preferences. After this determining factor of attribute parameter of product, the price becomes a relevant factor. Price is a parameter of buyers decision that can not be overlooked, further more, when a characteristic is considered more important than price in making a purchase decision, then its value is considered to be a requirement for purchase, but if the intended characteristic is considered less important than price, then acceptable range can be seen as preference rather than requirement (Joan Morris and Paul P. Maglio, 2001) Therefore, price is a general determinant for especially price sensitive consumers. Internet advertisers have different pricing techniques to attract new buyers and at the same time maintain already existing consumers which is based on consumer characteristic and the dynamically nature of demand and supply. Some of such frequently used pricing techniques are: Dynamic pricing As the term indicates, it is the dynamic adjustment of prices to consumers depending on the value attributed to product or service by these same consumers. By making provisions for affordable prices for certain products, this system instigates optimal results for consumers and hence enhances maximum sales to those selling. With internet marketing, there exists an evident shift from fixed pricing to dynamic pricing with greater competition existing against the formal and still existing traditional marketing system. Price differentiation It is a process whereby the same product of different units is sold at different prices to different consumers. With price differentiation, prices differ with the number of units sold. This could involve group pricing, discount pricing etc. With price differentiation, companies decrease the suitability of their products and services by customising their offers to the requirements of specific customers or market segment. This provides the customer with an advantage to purchase the said product or service. Using these pricing techniques enables the consumer to purchase a product by stating his or her own price, considering the suitability of the product in question. The right price in the market can not be easily determined, prices are competitive and this directly influences price sensitive consumers who have the tendency to fall for the most appreciated prices during their purchases. The best price in internet market does not only consider the price established by the producer or seller but also that requested by the buyer or consumer. Internet marketing offers the opportunity for companies to test prices, segment customers and adjust to change in supply and demand (Efraim Turban et Al. 2006) to consumers these pricing techniques are advantageous in the sense that consumers have the opportunity to find unique items and collectibles, consumers remain unanimous, internet market creates a bargaining atmosphere enabling the consumer to opt for the most affordable price, it is more convenient as consumer is not obliged to change location to execute a purchase and for the producers, they gain more customers by offering more items directly, it enhances maximum sales which is a fundamental base of every business, it improves customer relationship and customer loyalty to already existing customers. 2.7 Factors influencing intern