CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES

ABERDEEN BUSINESS SCHOOL

A dissertation submitted in partial fulfilment of

the requirements for the MSc degree in International Business

CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES

Supervisor: Dr. Robert Newton.

By Tushar T. Dalvi

Student No: 0915557

MSc. International Business (Full-time)

Word Count: 18750

Submission date: 18th January, 2012

MSc. International Business

ABSTRACT

Britain has the most developed online advertising market in the world which the report by the Internet Advertising Bureau (IAB), PricewaterhouseCoopers and the World Advertising Research Centre said was worth 2.8 billion pounds ($5.6 billion) in 2007 (Reuters, 2008). Yet small businesses are left away from the fruits of these flourishing trees.

The aim of the study is to develop a model of effective online advertising for Small Businesses by critically analysing the marketing activities of Indian restaurants involved in online advertising activity and located in Aberdeen city.

A qualitative research approach was adopted with a constructivist research philosophy using one-to-one, in-depth interviews with the marketing manager’s of ten Indian restaurants respectively. The data analysis was carried out by using SPSS. The interpretation of the data is presented in Section 4.

The study successfully developed a model of effective online advertising to facilitate its better implementation by Small Businesses. The model includes three key elements of online advertising. Such as format of advertising; Support in form of marketing integration and Performance management system.

The outcomes of the study illustrate the specific barriers encountered by some Small Businesses in adopting online advertising; identify how some Small Businesses in regional economies could do better by using online advertising and develop a model to facilitate better implementation in future for other Small Businesses.

The recommendations are purely based on the study conducted on the 10 selected restaurants which may or may not be applicable to some restaurants doing business in other parts of United Kingdom. Thus there is a need to carry out this study on a wide scale throughout United Kingdom.


Declaration & Acknowledgement

This dissertation is my own work and all sources have been acknowledged. I

would like to extend my sincere thanks towards my supervisor, Dr. Robert

Newton for his insightful advice, time, encouragement and assisting with my

research.

My sincere gratitude is extended towards the members of The Robert Gordon

University for their time, ideas and assistance with the research process.

Special thanks are extended to all of my friends and family for their support

throughout the year.

Table of Contents


Table of contents

Abstract………………………………………………………………………………………………………………………..

Declaration & Acknowledgement ……….……………………………………………………………………..

List of Contents……………………………………………………………………………………………………………

List of Figures………………………………………………………………………………………………………………

List of Tables………………………………………………………………………………………………………………..

Section 1: Introduction of Research

1. Preface………………………………………………………………………………………………………….1

2. Research……………………………………………………………………………………………………….3

3. Rationale……………………………………………………………………………………………………….4

4. Significance…………………………………………………………………………………………………..6

Section 2: Literature Review

1. Introduction………………………………………………………………………………………………….8

2. Small Businesses………………………………………………………………………………………….9

2.1 Introduction….…………………………………………………………………………………….....9

2.2 Definition of SME………………………………………………………..........................9

2.3 Small Businesses….....................................................................10

3. Marketing in Small Businesses………………………………………………………………….11

3.1 Introduction………………………………………………………………………………..………..11

3.2 Approach towards marketing….……………………………………………………………11

3.3 Evolution in Small Business Marketing…………………………………….………….14

3.3.1. Carson’s four stages of evolution..………………………………………….14

3.3.2. Role and Relevance of marketing model………………………………….15

4. Advertising and Small Businesses…………………………………………………………..18

5. Internet Advertising…………………………………………………………………………………21

5.1 Definition…………………………………………………………………………………........21

5.2 Growth in Internet Advertising………………………………………………........22

5.2.1 Advertising Formats………………………………………………………..24

Table of Contents


5.3 Reasons for Growth………………………………………………………………….........25

5.3.1 Key drivers for growth in ad spend………………………………….26

5.4 Benefits of advertising online…………………………………………………………….28

5.5 Internet Advertising and Small Businesses……………………………………….31

6. Problems in Internet Communication and their solutions ……………………33

6.1 Five Problems of Internet Communications………………………………..33

6.1.1. Unclear communication strategy……………………………………34

6.1.2. New Communication Paradigms…………………………………...34

6.1.3. Non-Integrated marketing communication……………………35

6.1.4. Company involvement in the internet challenge……………35

6.1.5. People for Internet communication………………………………..36

7. Measuring effectiveness of Internet Advertising……………………………………….37

7.1. Financial Measures………………………………………………………………………………37

7.1.1. Importance of financial measure…………………………………..38

7.2. Standardised Measures………………………………………………………………………39

7.3. Measurement Problem……………………………………………………………………….39

Sections 3: Research Methodology

1. Introduction………………………………………………………………………………………………..44

2. Methodology……………………………………………………………………………………………….45

2.1 Research Philosophy……………………………………………………………………………45

2.2 Research Approach……………………………………………………………………………..46

2.2.1 Qualitative………………………………………………………………………………….47

2.2.2 Inductive…………………………………………………………………………………….48

2.3 Research Strategy……………………………………………………………………………….48

2.3.1 Case study………………………………………………………………………………….49

2.4 Time Horizon (Cross-sectional)………………………………………………………….49

Table of Contents


2.5 Data collection method……………………………………………………………………….50

2.5.1 Secondary method……………………………………………………………………50

2.5.2 Primary method………………………………………………………………………….51

2.6 Narrative Structure of the study………………………………………………………..53

2.6.1 Drafting a proposal……………………………………………………………………53

2.6.2 Formulating research design……………………………………………………..54

2.6.3 Conducting research………………………………………………………………….55

2.7 Validating, Reliability and Generalisation……………………………………………56

2.8 Ethical consideration……………………………………………………………………………57

2.9 Limitation of the study…………………………………………………………………………57

Section 4: Findings & Analysis, and Discussion

1. Introduction…………………………………………………………………………………………….59

2. Findings and Analysis………………………………………………………………………………60

2.1 Demographics…………………………………………………………………………………….60

2.2 Classification……………………………………………………………………………………….61

2.3 Planning………………………………………………………………………………………………67

2.4 Preparedness………………………………………………………………………………………68

2.5 Use of Performance Management System on Marketing Strategies…70

2.6 Modifications based on PMS and Information gathered……………………71

2.7 Owner/Managers Understanding of External Market………………………..72

2. 8 Marketing VS Categories…………………………………………………………………..73

2.9 Understanding the Marketing activities of Outperformers………………..74

2.10 Model of effective online advertising……………………………………………….77

Table of Contents


3. Discussion…………………………………………………………………………………………………68

Section 5: Conclusion and Recommendations

1. Conclusion and Recommendations ……………………………………………………….93

1.1 Conclusion……………………………………………………………………………………..93

1.2 Effective model of online advertising strategy for small

businesses……………………………………………………………………………………………….96

1.3 Recommendations…………………………………………………………………….97

References………………………………………………………………………………………………………………………

Appendix…………………………………………………………………………………………………………………………

List of Figure


List of Figure Fig 1: Overview of the literature 8

Fig 2: The role and relevance of marketing. 16 Fig 3: The role and relevance of marketing with strategies:

16

Fig 4: UK Online AD spend. 23

Fig 5: The Digital Media Mix: % Share of revenues generated by different Advertising formats during 2008 and 2009. 24

Fig 6: Research Design 54

Fig 7: Relation between years of online experience and percentage increase in sale for 2009. 64

Fig 8: Planning: Time and efforts spend on Business planning and developing marketing strategies. 67

Fig 9: Preparedness: The chart explains three elements representing the preparedness of the participants against external forces. 68

Fig 10: PMS on Marketing Strategies: the chart explains amount of time spend on conducting Performance Management System (PMS) on Marketing strategies. 70

Fig 11: Extent of modification based on PMS and information gathered: the chart explains the extent of time spend by participants on modifying their business activities based on the PMS results and information gathered. 71

Fig 12: Understanding of external market: the chart explains the owner managers understanding of their external market. 72

Fig 13: Increase in sales for each participants. 81

List of Tables


List of Tables

Table 1: Requirements for financial years ending before 30 January 2004 10

Table2: Benefits of Internet Medium for small businesses. 31

Table 3: Company details 60

Table 4: Comparison of annual sales turnover between 2008 and 2009. 62

Table 5: Categorisation of respondents based on performance in market 62

Table 6: Classification of participants based on online experience. 63

Table 7: Analysis by age. 65

Table 8: Marketing activities performed by different categories: 73

Table 9: Marketing activity performed by Outperformers: 74-75

Table 10: Model of effective online advertising 77

Table 11: Commonalities between R1, R2 and R3. 85

Table 12: Advantages of important channels of advertising online. 90

MSc. International Business Page 1

I. Preface Internet advertising is registered to be worth of £1.97 billion in first half of

2010, up 10% on like for like increase compared to last year (IAB, 2010)

while overall UK marketing ad spend registered budget cuts at the end of

2010 (Sweney, M., 2011). The catalysts maintaining the growth of online

advertising expenditure are increasing online population, increased

broadband network, increasing social network fever, connectivity through

different devices and other benefits associated with the medium. According

to Weberg and Ljunberg (2001) as more people have adopted internet and

technology world has become smaller and inter connected “global village”

(Precce, 1994).

According to UK online measurement company (UKOMC, 2010) the Britons

38.8 million people are connected to 1.8 billion people from around the

world (Internet world statistic, 2010) to communicate with each other.

Internet has made our day to day activities so simple that from

entertainment to education and socialising to shopping everything is

accessible only from a click of a mouse. Advertisers believe that internet is

a cost effective and measurable medium for advertising. The Pay per Click

and Pay per Impression methods of payment makes advertising cost

effective as advertisers only pay for advertising to potential customers.

Internet advertisings are interactive which makes lasting impression on the

user. Paid search providers such as Google and Yahoo assist advertisers by

providing performance reports which increases the efficiency of the


advertising campaigns. These are the opportunities Internet has for those

looking forward to increase their range and communicate to large audience.

Although, internet has all this to offer small businesses shy away from it

due to fear of expense, lack of expertise and other such reasons. Whereas,

around 99% of UK’s business market is shared by SME’s which employ

around 50% of UK’s population alone. Also the key feature of internet of

being vast and available worldwide becomes a limitation in itself for small

businesses. With the increase of user population the population of

businesses online is also increasing thus exposing the small business to the

danger of getting lost in a virtual jungle without being noticed (Morgan,

1996 and Vescovi, T. 2002). Hence considering the necessity this research

will explore the marketing practice of small businesses to understand and

critically evaluate their use of internet for advertising purpose. In this

context small business refers to those businesses with no more than 30

employees and balance sheet turnover not more than £2.8 million.


II. The Research Aim of the study:

The study aims at fulfilling the gap in the literature by developing a model

of effective internet advertising strategy for small businesses. The study

intends to accomplish its aim by exploring, analysing and criticizing the

available information to devise an answer for question which is at the heart

of this research i.e.

What are the key factors responsible for the effectiveness of internet

advertising done by outperforming Small Businesses?

Research Objectives:

• To criticize and appraise the role of marketing function in small

businesses.

• To comprehend, analyse and criticize the role and importance of

advertising in marketing activities of small businesses.

• To study and slate the internet advertising and its types adopted by

small businesses in general.

• To criticize and analyse the barriers faced by Small Businesses in

adopting online advertising.

• To examine and discuss the available source and techniques for

Small Businesses to overcome the barriers faced.

• To develop and understand the marketing activities of participating

sample case studies.

• To build up a model of effective internet advertising for Small

Businesses.


III. Rationale Internet medium is gaining popularity among the marketers which can be

seen from the year over year increasing internet advertising expenditure.

The medium has huge range of benefits to offer which unfortunately only

huge marketers are able to gain while small businesses have been left

away. Small and medium size enterprises (SME) form about 99% of the

overall UK business market employing 50% of the UK working population

(DBERR, 2007). The marketers are moving away from tradition medium to

internet medium for advertising while most of the Small Businesses are still

more reliant on traditional forms rather than online medium for advertising.

Perhaps there are few misconceptions among Small Businesses such as

online advertising is expensive only for big marketers with big budgeted

campaign’s (Dietrich, L., 2010) and uncertainty of benefits for the business

(Dyerson, R., et al., 2009). These misconceptions pull out most of the Small

businesses away from enjoying the benefits of online advertising, whereas

out of others which adopt online advertising only some can use it efficiently

(Walczuch, R. et al., 2000).

The literature has various studies available which highlights the effective

use of internet by Small and Medium Enterprises (SMEs) for ecommerce;

factors influencing adoption of internet by SMEs (Hill, J., 2001; Walczuch,

R. et al., 2000; Vescovi, T., 2000) and nature and purpose of adoption of

internet by SMEs (Sadowski, B. M., et al., 2002; Grandon, E. E. and

Pearson, J. M., 2004; Damaskopoulos, P. and Evgeniou, T., 2003). Hill


(2002) in his study states three factors that effects internet adoption by

SMEs such as Perceived benefits, Organisational readiness and external

pressure. Sadowski`s (2002) exploratory study concludes that SMEs are

opportunistic rather than strategic in adopting internet. He believes that

internet has a strategic advantage which only small fractions of SMEs have

managed to gain. The study also points out the key influencing factor for

adoption of internet as communication need. Perhaps some other authors

focus on explaining the factors of strategic value and adoption of internet

for different purposes such as e-commerce, communication, e-business, etc

(Grandon, E. E. and Pearson, J. M., 2004; Damaskopoulos, P. and

Evgeniou, T., 2003; Gilmore et al., 2007). Hence literature covers range of

topics around the online medium while focusing on SME’s rather than

explaining internet advertising strategy specifically targeting Small

Businesses.


IV. Significance of the study The study intends to determine and examine the factor responsible for the

effectiveness of the internet advertising done by Small Businesses.

Currently there is a gap in the literature regarding the effective adoption of

internet medium by small businesses for advertising purpose. The internet

advertising expenditure is gaining a momentum in its field. Also the social

network craze has made the internet a part of our daily social life.

Although, large businesses are taking benefit of the increasing popularity of

the internet it is unfortunate on part of small businesses that they are not

taking the complete advantage of the benefits on offer. Therefore, it is

necessary to study the internet advertising strategy of the small businesses

and present a model of effective online advertising for Small Businesses.

This model will help Small Businesses to develop their internet marketing

strategy which will ensure possibility of effective results. This evaluation will

help the Small Businesses to identify the reasons for underperformance or

over performance and take required remedial decisions. Also it will help the

society at large by making available the product information of local small

businesses as it recommends the use of internet medium to small

businesses for advertising purpose.


Section 2: Literature Review


1. Introduction Literature review is a vital part of a dissertation. It helps to acquire the

understanding of the topic, empirical studies already conducted on it, how

the research was conducted and what were the key findings (Hart, C.

1998). The review is sourced from a wide range of empirical literature

made available from university Library, Online Database, Official

government websites and Company websites and Annual reports.

This Literature review is divided in four chapters discussing the findings

derived from the intensive secondary research conducted by the author.

Fig 1: Overview of the literature (Source: Author).


2. Small Businesses 2.1. Introduction:

Small and medium sized enterprises (SME) are 99% of UK’s 4.3 million

businesses forming the important part of UK’s economy. The SMEs across

UK provide over half of the employment (58.9%) in the nation (DBERR,

2007). Encouraging and promoting growth among SMEs is at the heart of

policy making UK government and European Union. The SMEs help to boost

the national economy and encourage competition at both, domestic and

international level (Dyerson, G. et. al., 2009). To better understand Small

as a term it is necessary to first understand the official definition of the

SME.

2.2. Definition of SME

The companies Act 2006 define SMEs as a company or a business which is

of small or medium size and not a member of large group (HM Revenue &

Customs, 2010). A small or medium-sized company/business is defined in

Section 382 and 465 Companies Act 2006. “ A company/business qualifies

as a small or medium-sized for its first financial year if it satisfies two or

more of the requirements (Table 2 & 3) for being a small or medium-sized

company/business in that financial year. Once a company/business has

qualified as a small or medium-sized you should keep on treating it as a

small or medium-sized company/business unless it fails to meet the

requirements for two years in a row. Where a large company/business

reduces in size to become a small or medium-sized you should not treat it


as one until it satisfies the requirements for two successive years. (HM

Revenue & Customs, 2010)”

Turnover

(not more than)

Balance Sheet (not more than)

Total no of Employees

(not more than)

Small Company £5.6 million £2.8 million 50

Medium-Sized Company

£22.8 million £11.4 million 250

Source: HM Revenue & Customs, 2010.

Table 1: Eligibility requirements for financial years ending on or after 30 January 2004

2.3. Small Businesses:

A business can be an individually owned proprietary business; a partnership

business; a registered friendly society or a corporate body which is under

corporation tax. Base on these definitions Small Business which is the

subject of the study can be defined as “A business with actual turnover not

more than £5.6 million; balance sheet turnover not more than £2.8 million

and not more than 50 employees can be classified as Small Business. (HM

Revenue & Customs, 2010)”


3. Marketing in Small Businesses: 3.1. Introduction:

To understand the behaviour of Small Businesses towards online advertising

it is necessary to first look at the role and relevance of marketing to the

Small businesses (Simpson and Taylor, 2000; 2002). Marketing in small

businesses has been a long subject of study among researchers and

academics (Simpson, M. et al., 2006 and Gilmore et. al. 2001). According

to Siu and Kirby (1998) knowledge about marketing in small business still

remains insufficient and a small business marketing theory and knowledge

of strategic marketing is needed. This chapter critically evaluates and

discusses work of some of the authors on the concern topic.

3.2. Approach towards marketing:

Waterworth, D. (1987) in his book cites that the important differentiating

characteristic of a small firm is that it is often established and handled in all

its aspect by a single owner manager. On the contrary some small firms

are managed and handled by a group of people often a family business or a

partnership firm between friends. However, Stokes, D & Wilson, N. (2006)

suggest that it is the owner manager or one of the owner managers who is

responsible and controls the critical function of marketing that determines

the success or failure of the business.


Some empirical studies have proved that marketing as a function is equally

relevant to small firms just as it is to large firms (Hogarth-Scott, S. et. al.,

1996). Whereas Carson (1985) observed that small businesses face some

operation constraints which set them apart from large business suggesting

a need for different less strategic approach. This is very much justifiable

due to the characteristics of small businesses such as small customer base;

resources constraints; owner mangers knowledge of marketing; uncertainty

and evolution are the factors which give rise to marketing issues and

problems (Stokes, D & Wilson, N., 2006).

Kenny and Dyson, (1989) in their research found that in practice the owner

managers of the small firm give little but no importance to the sophisticated

marketing theories as they do not feel any necessity to adopt them. Kenny

and Dyson (1989) even go to the extent of stating that these owner

managers are always unreceptive to any type of marketing activities unless

there is growth in revenues, expansion in business, depletion in profits and

saturation or increased competition in market. So Small business owners

later in their business lifecycle adapt to marketing but do not perceive

marketing in its classical form. However small businesses carefully consider

the cost of marketing activities against the possible consequences of

leaving with uncertainty and risk, and adopt marketing activities merely

under the pressure of increased need for planning and information (Kenny

and Dyson, 1989). Further Carson suggests that the non-strategic approach

has number of characteristics:


• Lack of formalized planning of marketing: Most of the marketing

activities are reactions to the activity in market place.

• Restricted scope and activity: due to the financial resource

constraints small businesses shy away from huge and expensive

marketing campaigns.

• Simplistic and haphazard: The owner manager lacks marketing

expertise thus implement random and basic marketing activities.

• Product and price oriented: the marketing mix only focuses on

providing products at competitive prices and overshadows

promotional activities, channels of distribution and potential new

markets.

• Owner-managers involvement: the knowledge and skill of owner

manager is reflected in the marketing activities conducted by those

small businesses.

Hence, Patten (1989) states that small businesses see marketing as purely

tactics and techniques to attract new businesses and to win new customers

rather than adopting a strategic approach of classical marketing which

involves four elements of customer orientation, marketing strategy,

marketing method and market intelligence. This can be easily identified in

practice where owner managers rather than identifying customer needs, try

to identify customers for their products on offer. Also easily ignore other

non-promotional aspects of marketing such as product development,

distribution and identification of new market. Some small businesses are

merely dependent on hard earned word of mouth recommendations and

therefore do not feel need to do any marketing. However their marketing


indicate certain amount of strategic marketing awareness in areas such as

Market segmentation and targeting; Market research and monitoring and

emphasizing on customer service and relationship building Stokes, D.

(2000).

3.3. Evolution in Small Business Marketing:

During the life span of a business the experience and knowledge of owner

manager and needs of business reflect the evolution in marketing activities.

The marketing activities evolve from non-strategic approach to strategic

approach which according to Carson (1985) is reflected in four stages of

evolution. Whereas, Simpson and his colleagues (2006) explain this

evolution with their two dimensional matrix model called Role and

Relevance of Marketing Model.

3.3.1. Carson’s four stages of evolution:

1. Initial marketing activity: During the establishment of the small

business the considerable amount of marketing activity based on the

product, pricing and its delivery is conducted.

2. Reactive selling: Small businesses are opportunistic they react to

increasing demand by customers rather than proactively using

marketing for its products.

3. DIY Marketing approach: The owner managers develop a positive

perception towards marketing as the business starts growing.

Although their efforts result into disjoint and sporadic campaigns.


4. Integrated, Proactive marketing: With further increase in

business the owner managers of small businesses are forced to

deviate to more strategic planning of marketing activities for which

they appoint or consult specialist marketing management.

Further Stokes, D. (2000) contradicts by stating that although owner

managers in initial stage adopt non – strategic approach to effectively fit

around their capabilities and the environment; if an owner manager

possesses the marketing expertise, then strategic approach can be

adopted at an early stage.

3.3.2. Role and Relevance of Marketing model:

The role and relevance of marketing in SME model is a two-dimensional

matrix model which helps to explain the marketing in the SME based on

the internal organisation and external competitive factor of the small

business. The model suggests three strategies (Strategy A, B & C) which

small businesses can adopt for its journey from “Marketing independent”

to “Marketing led”. Strategy A is a proactive strategy where “Marketing

independent” business would strive to increase market share or greater

market penetration or develop new product to complete its journey as

“Marketing led” via “Marketing dominated”. Strategy B is a reactive

strategy to become “Marketing led” via “Marketing week”. While strategy

C is an incremental approach due to increased competition.


Fig 2: The role and relevance of marketing.

Fig 3: The role and relevance of marketing with strategies.

“Marketing independent” category can be defined as companies which can

survive without marketing activity as they have stable market and lack of

enthusiasm towards marketing. On the other hand “Marketing led” category

can be defined as business which is marketing oriented with a marketing


department, active business plan, marketing database and representative

at board level (Simpson, M. et al., 2006)

Although the Role and Relevance of marketing model provides insight into

the behaviour of small businesses towards marketing it has certain

drawbacks criticised by authors such as Sekaran (20000), Oskoui-Jones,

(2002), Brodie et al., (1997). The model was developed in a hypothetico-

deductive way. The model ignored the effect of entrepreneurial behaviour of

owner/manager. The model relies on traditional and classical marketing

instead of modern.

There are only six exploratory models available through the empirical

research available on the topic (Carson, 1990). These models are

considered as descriptive as they have not been formally proven or tested.

The initial marketing capability framework devised by Moller and Anttila,

(1987) was the only similar model to role and relevance model as it focuses

on internal and external field of marketing capabilities of the firm although

the final matrix is different in structure (Simpson, M. et al., 2006).


4. Advertising and Small Businesses: Now that we have explored the empirical studies available on the wider

range i.e. marketing in small businesses, it is necessary to narrow our

exploration to advertising and finally to internet advertising practice in

small businesses.

Small businesses primarily base their decision to advertise on factors such

as financial strength of the firm to afford different media vehicles and the

demand of the target market. Hence, due to the financial exigencies and

the need to produce results within a reasonable period of time, the

appropriate use of media vehicles is of paramount importance for small

retail outlets (Vaccaro, J. & Kassaye, W., 1988). The empirical studies have

confirmed that most small businesses choose media ranging from cheap

Handbills, posters, brochures and Sign boards to little expensive Medias

such as local radio, newspapers, magazines, direct mails and websites

(Patten, D., 2002). Rest still believe in word of mouth recommendations

and free publicities e.g. an article by a food critic in a local newspaper is a

free advertising for the restaurant.

Some of the successful small businesses understand the critical importance

of ‘Positive word of mouth’, ‘Customer referrals’ and ‘Recommendations’

from existing clients to attract new clients. Thus they significantly invest in

communicating on personal level with their existing clients. With respect to


any other form of media this process offers two advantages. Firstly, the

unbiased recommendation from an un-incentivised third party is much more

valued than any form of marketing information. Secondly, the word of

mouth advertising is a free resource for the cash poor small businesses.

Most of the small businesses choose to adopt advertising with a ‘me too’

attitude to compete with their competitors. These small businesses

advertise without having decided the objective. Patten, D., (2002) in his

work states that the effective advertising needs to have a clear idea of what

is intended to achieve. But the small business managers are so involved

with their day to day responsibilities they underestimate the importance of

strategic planning before advertising. Patten also suggests that every penne

invested in adverting will be worthy only if Advertising has an objective to

achieve. A strategically planned advertising can achieve variety of

objectives such as:

1. New product Launch, 2. Sales, 3. Change of premises, 4. Social responsibility advertisement, 5. Trade ads for wholesalers, 6. To promote websites.

These and many other objectives can be achieved if advertisings are

strategically planned before investing in them.

The choice of medium to advertise is the important principle in advertising

as it is essential to choose the medium which reaches as many target

audience as possible. Although it sounds obvious many small businesses


forget to consider this fact while choosing the medium for advertising.

Small businesses are cash poor they cannot afford to have choice of

medium which large businesses have. Hence, first they have to discover

their potential customers and later identify the medium which gives

maximum result at economic cost.

There is a vast range of medium available for small businesses to choose

from, to advertise their message:

Traditional Mediums:

1. Local newspaper, 2. Magazines, 3. Local Radio, 4. Cinema, 5. Yellow pages, 6. Posters, Hoardings, Sign boards, 7. Handbills, brochures, Leaflets, 8. Direct mails, 9. Sponsorship, 10.Point-of-sales Material

Modern mediums:

1. Websites, 2. Promotional SMS, 3. Emailer’s, 4. Banner ads, 5. Pop-up’s, 6. Search engines, 7. Blogs, 8. Social networking sites


5. Internet advertising 5.1. Definition:

Vurro, M (2009) in his essay quotes Pleil and Zerfaβ, (2007:511) to define

internet which is fundamental for online advertising. According to Pleil and

Zerfaβ, (2007:511) “internet is a virtual place, were people globally come

together to interact and exchange information.” This statement along with

the fact that internet and technology associated with it is continuously

growing and developing implies that internet is a lucrative medium for

advertisers.

In order to better understand Online advertising it is also necessary to know

traditional “Advertising” which is underpinning to the core subject. Dibb et

al. as stated by Janoschka, A. (2004) define advertising as formal

communication between the organisation and its audience about the

product, transferred through a mass medium such as T.V, radio,

newspaper, etc.

On the basis of above statements Internet advertising can be defined as

follows: According to Vurro, M (2009) “Internet medium (for advertising)

provides a flow of information (to and fore between business and user)

available to consumer on demand enabled through technological devices

(Laptop, PC, Mobile, IPTV, etc) in an interactive and personalized

environment (personally targeted to user)”. Zeff, R and Aronson, B (1999

pp11) puts forward their perspective in their book which defines online

advertising as medium which “enables consumers to interact with


advertising... gives advertisers the opportunity to precisely target an

audience, enabling them to deliver advertisements that are customized to

each user’s particular interest and tastes.” Evans, D (2008) points out the

unique feature of online advertising of targeting specific individuals by use

of internet based technologies and data collection mechanism.

Thus, it can be narrowed down to a conclusive statement that internet

advertising is a formal interactive communication between organisation and

an individual consumer about its product through internet as mass medium.

There are deferent forms of Internet advertising available due to constant

advancements in technology. Such as E-mails, Banners, videos, search

engines, affiliated advertising, social network advertising, etc.

5.2. Growth in Internet advertising:

To be able to understand the importance of internet advertising it is

necessary to understand its current state in the market. The statistical facts

will help to do so. Also these facts will play a part in explaining reason for

its growth.

Even as the industries across the globe have gone through the recession in

the last 2008 and 2009, online advertising has continued to see growth and

also forecasted to increase further till 2012. The Online adspend study

published by Internet Advertising Bureau (IAB) supports the report

statistics published by AA/WARC. It states that online advertising

expenditure had increased from £3,349m in 2008 to £3,541m, in 2009

(IAB, 2009).


Fig 4: UK Online AD spend. (Source: Paidcontent:UK, 2010)

Studies show that online advertising expenditure has recorded growth year-

on-year since 2001. It has reach £3.5 billion from £153 million in 2000, i.e.

2200% increase in UK online advertising expenditure. This can be related to

the reformation of web 2.0 in 2004 which helped the industry to gain

momentum (Evans, D., 2008). The records show that in first half of 2009

TV spending shrank by 16.1% to £1.639bn, while online spending grew

4.6% to £1.752bn (BBC News, 2009). It also shows that the second half of

2009 was better than first, when between July and December online

advertising spend registered increase by £25.6 million to £1.78 billion with

medium accounting for 23.5% of overall advertising expenditure leaving

behind the traditional forms such as Television, Radio and Print (Holton, K.,

2009).

Guy Phillipson, chief executive officer of the IAB, said: “In 2009 the

advertising industry was hit hard but Online has proved itself a winning

medium, capturing a greater share of marketing budgets.

In the past year we’ve seen some real success stories as search passed the


£2 billion mark, and online video advertising experienced spectacular

growth. And with sectors such as Retail and Consumer Goods increasing

their spending on the internet we can look forward to a healthier 2010”

(IAB, 2010).

5.2.1. Advertising Formats:

Fig 5: The Digital Media Mix: % Share of revenues generated by different Advertising formats

during 2008 and 2009. (Source: IAB, 2008 & 2009)

During 2009 paid search showed 9.5% like-for-like increase to reach £2.15

billion which was 60.7% of all online advertising expenditure from 59.3% in

2008. This correlates with the fact that 97% of Google’s 2009 revenue was

earned from advertising (Google 2009 annual report, 2009: 37). Display


saw 1% like for like decline between 2008 and 2009 which can be

supported by the fact that revenue by Yahoo from display advertising on its

owned and operated sites faced a decline of 9% (Yahoo annual report 2009,

2009: 34). Whereas classified ads saw a 2.3% like for like decline between

2008 and 2009(IAB, 2009).

5.3. Reasons for growth:

First the continuously increasing popularity of internet among consumers

and secondly the continuous development in technology increasing its

potential are the factors attracting the marketers to increase their online ad

spend.

The key elements responsible for the popularity of internet are its features

such as availability of faster and cheaper internet; free contents and

knowledge; free medium of entertainment and recession. The UK internet

Market review published by Keynote mentions TGI survey. It states that in

2008, 98% internet users were using broadband which provide the speed of

data transfer necessary to use advanced, interactive ‘Web 2.0’ applications

at cheap rates. Internet makes news from all over the globe available for

free on websites like Google and yahoo, thus attracting large audiences and

advertising revenues (Berte, K. and De Bens, E., 2008). The UK economy

is showing a small growth after six consecutive quarters of contraction. The

recession had lead UK into higher inflation, Unemployment and drop in

household disposable income. These factors lead consumers to spend more

time on internet, which is a free source of entertainment (Youtube, BBC

iplayer, etc) and portal for cheap bargains for new and old product for e.g.


ebay. Recession also accelerated the migration of adspend from traditional

to online advertising (BBC News, 2009). Eva Berg-Winters of

PricewaterhouseCoopers said. "Hence the continuing shift from more

traditional forms of advertising to online, which promises return on

investment and measurability in a period of instability" (Holton, E., 2009).

The continuous development in technology is the other factor that attracts

marketers towards online medium. The development of web 2.0 has made

online advertising more interactive giving the opportunity to marketers to

directly interact with individual users and develop a relationship. This helps

marketers to directly provide personalized information to its target audience

(Keynote, 2009).

5.3.1. Key drivers of growth in ad spend:

More people online – According to the study conducted by UK Online

Measurement Company (UKOM) and Nielsen, the UK’s active online user

base has registered an increase of 4.4 million that is total of 39.7 million in

comparison to 35.5 million in February 2009 this helps to target more

audience (IAB, 2009).

Web 2.0 - Development of web 2.0 has made personalised advertising

possible thus increasing the targeting efficiency of the advertising. Websites

can access browser history of the user learn the likes and dislikes of the

user enabling it to display specific advertise to specific audience only.

Faster broadband drives video advertising – The advertiser have

managed to encash the opportunity put forward by the increasing online


population; availability of broadband facility to more and more people (90%

of UK online population) development of web 2.0 technology and increased

broadband speed of over 2MB by providing increasingly dynamic video and

rich media executions making advertisements interactive (Berte, K. and De

Bens, E., 2008).

Social media fever grips Britons – An average online user in UK spends

its 20% of online time socializing on Facebook. This social nature of the web

offers an opportunity for advertisers to directly target its relevant mass

audience. The social networking sites such as Facebook and Myspace have

revitalized the online usage into a perfect environment for engaging ads.

Advertising on such social networking sites is easy and also cheap in

compared to the exposure it offers. The social networking sites also help

advertisers to advertise more efficiently by providing reports on their

advertising campaigns running on these social networking sites (Facebook,

2011).

Devices and connectivity - Development in technology has made possible

to connect every electronic device to internet contributing to increase in

internet population. Today not only mobiles and laptop can be connected to

internet but devices such as game consoles, digital readers, MP3 players etc

can be connected to internet via 3G internet network allowing user faster

internet experience wherever and whenever needed (IAB 2011).

Thus these factors contribute towards growth of online advertising and shift

of advertising budget of Multinational companies from traditional medium to

online medium. Similarly due to the above factors some of the small


businesses have shifted their marketing budget from traditional to online

advertising. For those small businesses, who are still into traditional

advertising can also consider these key factors of growth and shift their

advertising budget from traditional to online advertising and take advantage

of the benefits on offer.

5.4. Benefits of advertising online:

The empirical studies have described number of benefits internet

advertising has to offer to small businesses although, only few of the

benefits are perceived to be important by small businesses. Benefits such

as, direct and indirect advertising, easy access to potential customers, low

cost communication and effectiveness in information gathering (Abell and

Limm, 1996 and Walczuch, et. al., 2000). Wang and Daniel R. Fesenmaier

(2006) recognized three broad categories of opportunities in Internet

marketing:

1. ‘Information delivery opportunity’ by the use of internet,

marketer’s are able to deliver their product and service information

to huge audience at low cost. Thus small businesses can target

customers not just from their local area but across city, county and

around the globe. For example a Restaurant will not be limited to its

own local customers but can also attract international tourists

through providing information on the internet.

2. ‘The relationship-building opportunity’ by using the interactive

media marketers can learn about the users and customize contents

targeting their desired audience. Web 2.0 enables the advertiser to


access customer’s browser history and target appropriate customer.

The website can be used for 24/7 technical support by providing

online, up-to-date and accurate technical product information;

product trails and demonstrations and reduce sales lost by being

available on demand (Corin, 1994).

3. ‘Disintermediation opportunity’ by using internet marketers can

eliminate third party intermediates from their value chain. For

example a manufacturer of a handcrafted item can sell directly to the

customer throughout and across the country via Ebay, Amazon, etc.

Yet the Small Businesses stay away from these opportunities put

forward by online advertising.

There are other benefits that internet advertising has for businesses such

as:

1. Information richness: Through online medium it is possible to

advertise the product information without any constraints. Websites

provides customer with substantial product information in content

rich formats such as text, images and videos (Hoffman, Novak and

chatterjee, 1995; Corin, 1994, Schlooser, A. E., and Kanfer, A.,

1999). It also allows to link to different sites and multiple pages.

Thus online medium is not just limited to short memorable message

(Schumann, D., 1999 and Corin, 1994).

2. Ease of updating: Online advertising lacks the delays of other

media and its maintenance can be cheaper than other media. Also

online information is made user friendly thus can be easily updated


without the expertise (Hoffman, Novak and chatterjee, 1995 and

Sussman & Pollack, 1995).

3. Branding: Due to the space limitation of traditional media it cannot

be used for advertising branding related information. Whereas online

medium can be used for building a brand as website can contain

detail company information, Portfolio, corporate responsibility

information and other Public relations materials (Sadikin, 1995).

4. Data collection: Through Online medium businesses can easily and

inexpensively collect market information required for decision

making. Also information required for tracking the performance of

the website such as which page on the site was visited; how many

times it was visited; how long and how the user came to that page

and from where was the user directed. The recent development of

web 2.0 allows the businesses to access the user’s browser history to

learn about the user’s preferences (Corin, 1994 and Berte, K. and De

Bens, E., 2008).

5. Global exposure: World Wide Web allows the local business to go

global. The business can respond to its global market simply by have

web pages in different languages. The global exposure gives the

competitive advantage to the business (Krugman, Reid, Dunn, &

Barban, 1994).

6. E-commerce: The website can facilitate purchase decision by

providing detailed product and dealer information. But at the same

time allows customers to buy from their own homes promoting


impulse buying behaviour among the consumers (Hoffman, Novak

and Chatterjee, 1995).

Apart from these benefits there are benefits that impacts the other

components of the small businesses (see table 1).

Components Benefits

New Sales Channels On-line Sales and transactions

Ability to reach out international market

Increase in market share of product/services

Direct Savings Savings in communication cost

Savings in advertising cost

Increase productivity

Customer satisfaction Greater customer satisfaction

Better service and support to customers

Table2: Benefits of Internet Medium for small businesses.

(Source: Walczuch, et. al., 2000)

5.5. Internet Advertising and Small Businesses:

Small Businesses are perceived to be source of further growth and

innovation for the nation. Dyerson (2009) states that Small Businesses are

cash poor and lack range of expertise. Small Businesses do not have to be

cash rich to invest in internet advertising on contrary internet medium is

perceived to be cheap and also free through certain forms. Google Adwords

allows advertisers to have their website link on the search list but only


charges them per click or per impression depending on the option selected

by the advertisers (Google Adwords, 2011). Advertising through networking

sites such as Facebook, twitter and Youtube is free of charge. Google offers

range of services such as Google Adwords; Google analytics and Google

Website optimiser to manage and run advertising campaigns on Google

which are user friendly and specifically made for layman (Google, 2011).

Although Small Businesses have limited recourses in terms of time, money

and expertise (Wymer and Regan, 2005) it is the motivated owner-manager

who drives the business and shapes the nature of investment decision

(Dyerson, R. et. al., 2009). Pool et al. (2006) suggests that Small

Businesses lag behind the large firms in adopting the internet medium for

advertising. The study conducted by Dyerson et al. (2009) shows that over

34% of the respondents replied that cost is the primary barrier for

investment while other 25% said uncertainty over benefits to the business

(Return on Investment) is the barrier.


6. Problems in Internet Communication and their solutions Abell and Limm, (1996) and Purao and Campbell, (1998:61) conducted a

study on the barriers to internet access for Small Businesses. Paurao and

Campbell carried interviews with all small businesses some with online

presence and some were not. For those who didn’t have online presence

Paurao and Campbell found that ‘start-up cost’, ‘unfamiliar with the web’

and ‘lack of knowledge on how to start-up a business’ as main cause of

concern. In contrary Hamill, Jim and Gregory, Karl (1997) found in their

research that cost and resource is not the major obstacle while lack of

knowledge is. The companies that are already online for them primary

concern is security hazards (Purao and Campbell, 1998 pp.61). Here Abell

and Limm‘s (1996) findings supports the Paurao and Campbell outcome of

concern over security. Also according to Walczuch, R. et al. (2000) Attitude

is perceived to be another important factor behind non-adaption of the

internet among Small Businesses. Attitude here refers to owner-managers

attitude towards online medium or personal belief about the medium.

6.1. Five Problems of Internet Communications:

Vescovi, T. (2000) in his research also puts forward five common problems

faced by small businesses in introducing the internet communication.

1. Unclear communication strategy;


2. New communication paradigms;

3. Non-integrated marketing communication;

4. company involvement in the internet challenge;

5. people for internet communication;

6.1.1. Unclear communication strategy

Companies those have their website are often present online with “me too”

attitude passively waiting for the customer to approach. The internet offers

an interactive marketing opportunity (Hoffman and Novak, 1996b).

Interaction is a two way communication hence only being passively present

on internet is not sufficient. The marketers have to shift their attitude from

active customers-passive company to active customers-active company.

Thus it is necessary to develop a clear communication strategy supported

by continuous and proactive activities (Bishop 1998). The company should

interact with its customers, create a buzz, regularly update the contents

and become an active company so that it can attract traffic to its website.

6.1.2. New Communication Paradigms:

There are two approaches to overcome this problem while freshly

introducing internet communication into business. First consider internet

similar to any other medium when it was first implemented into business

because rules of the game remains the same. Second is to understand and

accept the fact that internet communication is new concept for the business

(Hoffman and Novak 1996b). According to Vescovi (2000) competencies

and attitude required to enter internet is lacked by the marketers but


Tapscott (1998) contradicts to Vescovi’s statement by suggesting that new

generation is growing up in a digital age with more computer knowledge.

Also technical aspect of the internet advertising can be outsourced such as

development and maintenance of website and internet advertising material.

The internet communication makes both one to many and one to one

communication possible. This brings new rules of diffusion of messages.

Thus it is necessary to develop new external and internal communication

strategies.

6.1.3. Non-Integrated marketing communication:

Developing a website itself is not sufficient business has to develop

integrated campaign targeted to customers making them aware of the

website (Walczuch, R. et al., 2000, Bayne, 1997; Zeff and Aronson, 1998).

Different communication tools along with the internet are collected together

under in single format to coordinate with each other. Integration of

marketing communication helps to improve the communication

performance. Company should use traditional mediums (Television, Radio,

outdoor (leaflets), newspaper and magazines); promotional campaigns

along with dealers and other online services to promote its internet

advertising and making users aware of it.

6.1.4. Company involvement in the internet challenge:

Introducing internet requires changing consolidating habits, learning new

competencies, working with new perspective and increase in active

participation. The amount of commitment required can lead to quick


enthusiasm followed by fast disappointment which can ultimately lead to

fatal errors, abandoning the site and giving up constant updating. The

business and its personals should get involved in the development of its

website (Vescovi, 2000).

Following three elements of the business involvement are necessary for the

internet communication to be successful:

• The champion • The strong project leader • The rigorous planning and process

(Source: Vescovi, 2000)

In a small business the role of a champion should be played by the owner

himself he is most influential person in the organisation. The manager can

be a project leader always available to support the champion and work on

the project with dedication (Vescovi, 2000). Finally, according to Bayne

(1997) “Defining a specific plan, that includes clear goals, defined timing,

resources and evaluation systems, must be a condition that cannot be

ignored, if the company wants to reach a sufficiently good quality of the

Web site”.

6.1.5. People for Internet communication

Developing a website is no doubt a job of a web developer but the web site

is a representation of strong market relationship, consistent with market

strategies for which a marketing manager is required. Internet means

continuous change and development along with it entire organisation is

affected (Vescovi, 2000).


7. Measuring effectiveness of Internet Advertising There are various ways to reach to the customers through internet but it is

necessary to understand which way is effective and which isn’t. “It is all

about discovery; trial and error; and refinement. Be willing to try something

and change it if it doesn’t work (Kooser, A. C., 2007).” There are different

measures used to gauge the effectiveness of internet advertising (Selnes,

1992). On the other hand “Reach” and “Frequency” are used to determine

popularity of the advertising campaign.

7.1. Financial Measures:

Return on marketing or Return on Investment is a financial measure it is

defined as follows “the revenue or margin generated by a marketing

program divided by the cost of that program at a given risk level (Powell,

2002, p. 6).” There are various surveys conducted on marketing

accountability and measures. Such as, the survey conducted by the

American Productivity and Quality Centre (APQC) with Advertising Research

Foundation (ARF) in 2001 and 2003; a survey carried out by the Chief

Marketing Officer (CMO) Council in 2004 (Stewart, D., 2009).

The APQC/ARF (2001) survey states that there is a need for an econometric

marketing mix model to achieve competitive advantage and increase

profitability because of continues increasing competition in the market. The

marketing activates should be gauged in terms of financial performance.

The result of this model depends on the quality of the data that forms its


base. The participants of the survey confront that ROI based performance

tracking gives positive outcomes. The participants also suggest that ROI

based performance tracking of the marketing activities develop knowledge

and enhances teamwork. On the contrary, the survey found general

dissatisfaction among participants for calculating return on marketing

activities in financial terms. The CMOs survey showed some most important

metrics such as (1) ‘revenue’, (2) ‘qualified sales lead generation’, (3) ‘sales

and channel feedback’, (4) ‘return on investment for marketing programs’,

and (5) ‘customer retention’, ‘loyalty’, and ‘satisfaction’. Measures used to

gauge marketing outcomes in economic terms or the way in which it is

more convenient to relate (Stewart, D., 2009:637).

7.1.1. Importance of financial measure:

Powell proposed that effectiveness of internet advertising should be gauged

in terms of economic or financial measure because:

(1) finance is the best evaluating measure for a business, (2) companies

are evaluated by the financial figure published in the financial statements of

annual reports of the business, (3) financial metrics acts as a standard

metric to compare alternative and otherwise non comparable actions across

markets, products, and customers, (4) financial metrics provide

accountability, (5) financial metrics promote organizational learning and

cross functional team work because they provide a common language, and

(6) Financial metrics serve the purpose of a standard for dealing with

different marketing activities and intermediate marketing results (Stewart,

D., 2009).


7.2. Standardised Measures:

Apart from measuring the effectiveness of the marketing in financial terms

there are other metrics available. There are various ways to evaluate the

effectiveness of online advertising at least one measurement tool for one

advertising channels. Such as, click through rate (banner ads); sentiment

analysis (social networks); traffic monitoring and impression (Websites);

etc. These measures are developed from web log file records to access the

effectiveness of the advertising within the web based multimedia

environment (Drèze, X., and Zufryden, F., 1998). The traditional memory

based measurement tools such as recall, reorganization and awareness are

also applied on online advertising (Dreze, X. and Hussherr, F. X., 1999

internet advertising is anybody watching).

7.3. Measurement Problem:

1. Identification of unique visitor:

Traditionally to measure the effective reach of an advertisement a survey is

conducted where each participant is uniquely identified by its telephone

number or address. In case of internet advertising to measure the

effectiveness of advertising whether it is display, paid search or website a

web log of the user and its activity is maintained. The individual user is

identified by its IP (Internet protocol) address which helps to measure the

visitor traffic, flow patterns to, from and within the website. Unfortunately

this IP assigned by the internet service provider (ISP) is not unique. For

example in multi-user system a same IP is provided to different users. If a


ISP provided dynamic IP allocation than for every new session a new IP

address is assigned. Also if an ISP uses proxy server a user can be assigned

different IP addresses in a single session (Drèze, X., and Zufryden, F.,

1998).

2. Problem of caching:

In case of measuring the frequency of an internet advertising the number of

exposures is logged on the server. So when a user first sees the

advertisement one impression for that user is logged on the server. But if

that same user after browsing for a while comes back to the advertisement

by clicking the back button of the browser, to speed up the process browser

displays the stored version of the web page. Hence this time even if the

advertisement is exposed second time server is unable to log it (Drèze, X.,

and Zufryden, F., 1998).

3. Reliability of reported measures:

There is a difference in requesting a page and actually reading it or

receiving it. A user may request a page and change his mind and close the

browser without actually viewing the advertisement. This type of problem is

common in any medium. For example a television viewer can be distracted

and miss the commercial. This problem tends to falsely increases the

measure (Drèze, X., and Zufryden, F., 1998).


4. Measurement tools:

The Google analytics, Google Adwords, Optaumum, AlTerianS2 and

Brandwatch are some of the effectiveness measurement applications that

are used to evaluate the effectiveness in terms of brand awareness created

whereas the other studies evaluate effectiveness in terms of sales (Nail, J.,

2005, Craver, Marc, 2007 and Thomas, J. W., 2006).

There exists at least one measurement tool for every advertising format or

channel. The effectiveness of paid search can be gauged by click through

rate or impressions made. The search providers such as Google, Yahoo,

MSN, Ask etc. provides there advertisers with performance tracking

applications which gives results in form of reports and statistics (Google

Adword, 2010; Yahoo Advertising, 2010 and Microsoft advertising adCenter,

2010). These reports can be used to understand how many people visited

there website through the search, which key word if more effective and

which isn’t. These providers charge on the basis of cost per click, cost per

impression or cost per action so advertiser only pays when advertisement is

actually displayed or a business is gained from the provider. Thus small

businesses can afford to advertise through search engines without having to

spend huge amount on printing the advertising materials and employing

someone to distribute them.

Email advertising uses the open rate and click through rate as the measures

to gauge the effectiveness of advertising campaign. Open rate is a record of

number of emails opened out of the number of emails send. Whenever a

user opens an email on its email reader application a hidden code triggers a


unique tracking image back to the advertising service provider’s server

which is then recorder and presented in form of metric report. Since a

unique tracking image is recorded for every user it eliminates the unique

identity problem. But it has its own limitations such as some email reading

applications has a preview option which on selecting an email previews it

and at the same time triggers the tracking image without actually seeing

the email. While some email reading applications do not displays HTML and

for the code to be triggered HTML has to be displayed. Hence even when

user reads the email it is not registered on the server (Mark Brownlow,

2006).

Social media advertising are gauged by sentiment analysis along with click

through rate and impressions made. Facebook has partnered with

measurement company Nielsen to provide its advertisers with targeted ads

by using the user profile information which provides the required

demographic information (Helen Coster, 2009).

Website advertising can be gauged by measures such as number of visits,

number of users registered and number of orders received or sale made.

There are various intermediaries which provide the service of analysing the

website traffic and the business done by it and present the results in form

of metric reports. These reports can help advertisers to understand the

shortcomings and make required changes. Google analytics is one of these

intermediaries which not only gives detailed reports on visitors but also

allows integrating the Google Adword and Ad sense (Google Analytics,

2011).

http://search.forbes.com/search/colArchiveSearch?author=helen+and+coster&aname=Helen+Coster�


Section 3: Methodology


1. Introduction The aim of this chapter is to describe and summarize the research

methodology used in this study. The chapter begins with explaining

research philosophy followed by research approach, strategy of inquiry,

time horizon, the research process and data collection. The final section

consists of Validating, Reliability, Generalisation, Ethical consideration and

limitation. Data collection section explains the process of primary and

secondary data collection method used by the researcher to achieve aim

and objective of the research.

The research onion typology stated by Saunders, et al. (2003) is used as a

guide to choose the data collection methods. Saunders and his colleagues

believe that the approach to the research can be related to “onion”. The

centre of the research can be related to the centre of the onion while

different stages in the research process can be related to different layers of

onion. The research process “onion” stated by Saunders, et al. (2003)

includes following layers:

1. Research Philosophy: Constructivism

2. Research approach: Qualitative and Inductive

3. Research strategy: Case study

4. Time Horizon: Cross-sectional

5. Data collection method: Observation and Interview


2. Methodology 2.1. Research Philosophy:

The research philosophy depends on the way that we think about the

development of knowledge. The way we think about the development of

knowledge affects the way we do the research (Saunders, M., Lewis, P.,

and Thronhill, A., 2000). Any given research starts with a knowledge claim

where a researcher makes an assumption about what will be learned

through his project (ontology), how will it be learned (epistemology), and

what is the importance of this project (axiology) (Creswell, 1994). The four

types of knowledge claims are: post-positivism, constructivism,

advocacy/participatory and pragmatism (Creswell, 2003).

The research philosophy of the current study is constructivist often

associated with interpretivism (Saunders, M. et al. 2000 and Creswell,

2003). A constructivist study makes an assumption that individuals

interpret the meaning in the world they live and work. They develop

subjective meanings from their experience. The study claims that it is

important to understand the situation in detail in order to understand the

motivating factor behind that situation (Saunders, M. et al., 2000).

The researcher begins with the curiosity to comprehend the reason for the

lack of interest and involvement in internet as medium for advertising,

shown by the small businesses while the medium is booming with year over

year increasing ad-spends by large businesses. Thus the study relies as

much as possible on the observation and investigation of the general

practice implemented by participants for the use of internet as advertising

medium. This helps to build some experience which later helps the study to

construct its primary research question i.e. to determine the factors

responsible for effectiveness of internet advertising undertaken by

outperforming small businesses. Hence the constructivist philosophy proves

itself necessary for the research.


Unlike Constructivism, post-positivism inquiries verifies theories and do not

generate new ones. It is deterministic, assesses and experiments on the

cause to determine the results (Phillips and Burbules, 2000) where as our

research needs to comprehend and evaluate the result to understand the

cause behind it. The Advocacy/participatory philosophy focus on bringing

change in practice with collaborated efforts from participants. It takes

support of political debates and discussion for change to occur (Kemmis and

Wilkinson, 1998). But in case of the inquiry undertaken by the researcher

where researcher is in a search of best practice among the participants the

advocacy/participatory philosophy can lead to biased inputs from the

participants as they are competitors of each other and would want to prove

their dominance over other. Another philosophy named Pragmatic

worldview arises out of action, situation and consequences rather then

antecedent conditions. This is similar to the approach required for the

research perhaps pragmatic philosophy does not focuses on any one

method of inquiry rather believes in adopting the best method that meets

the need and purpose at that time (Morgan, 2007). This according to

researcher does not satisfy the purpose of the study since there is not much

literature available to help researcher to deduce the intended model of

efficiency. Hence it is inevitable to undertake constructivist philosophy

instead of any other philosophy since researcher has no other option than

observation to interpret, evaluate and formulate a new model of efficiency.

2.2. Research Approach:

The research approach is based on knowledge claim, strategy and research

method. The research approach is basically of three types Qualitative,

Quantitative and Mixed (Creswell, 2003). While according to Saunders et al.

(2003) the research approach can be differentiated into two types such as

deductive approach and inductive approach. The deductive approach

means, where a researcher develops a theory and hypothesis and designs a

research strategy to test the hypothesis. Whereas inductive approach

means, where a researcher will collect data and then develop theory as a


result of data analysis. These different terminologies by different authors

show that there exist discrepancies in the literature. Hence, the confusion

caused by these discrepancies is avoided by explaining approaches laid by

both the authors, which are relevant to the current research study.

2.2.1. Qualitative:

The present study adopts a qualitative approach as its research

methodology. The qualitative approach is adopted with constructivist

research philosophy. The purpose of the qualitative approach is interpreting

the situation with focus to sought complete and holistic understanding the

situation. The qualitative approach uses strategies of inquiry such as

narratives, phenomenology’s, ethnographies, grounded theory studies or

case studies (Creswell, 2003 and Grady, M., 1998).

The quantitative strategy involves true experiments, quasi – experiments

and correlational studies where a subject is tested against different

variables and treatment (Neuman & McCormick, 1995). But the study

intends to identify the best practice among the participants via observation

rather than experimenting and inventing a new one. The researcher also

believes that the participants would have to invest significant amount of

time and effort and also bare the risk of failure by learning new model

whereas they can easily adopt the best practice from the experience of their

competitor. The Mix method strategy is a concept of mixing different

methods as it is believed to neutralize and cancel the biases in any single

method (Creswell, 2009). The Mix method strategy includes multiple

methods and is time consuming. The study merely depends on observation

of facts and evidently visible practice of internet utilization for advertising

without involving participants in the research thus it minimizes the treat of

biases. Hence it seems unnecessary to adopt Mix method strategy when a

single method strategy saves time and gives desired outcome.


2.2.2. Inductive:

The paper adopts inductive approach to understand why some thing

is happening rather than being able to understand what is happening. The

inductive approach is primarily concern about context in which the event

takes place. The inductive approach to research emphasises on collection of

qualitative data; the researcher’s participation in the research to gain

insight of the situation through observation; maintaining a flexible structure

to incorporate changes as the research progress (Saunders, et al., 2000).

According to the practical criteria’s suggested by Creswell (1994) the nature

of the research topic is most important. A topic on which there exists very

little literature it is appropriate to use inductive approach where data is

collected and analysed and a theory is generated through the theoretical

themes that data suggest (Saunders, et al., 2000).

However there are some drawbacks of inductive approach. The result is

generated gradually as data is collected on much longer period. Their also

exist a high risk that no useful data patterns or theory will emerge

(Saunders, et al. 2000).

2.3. Research Strategy:

Strategy of inquiry or research strategy provides specific direction for

procedures in research design. Like knowledge claims over the year’s

strategies have multiplied due to advancements in computer technology

enabling complex data analysing and individuals have articulated new

procedures for conducting research. These strategies of inquiry form a part

of the research approach. The different strategies of inquiry are as follows

Phenomenology; grounded theory; ethnography; case study; narrative;

experiment; survey; sequential; concurrent; transformative; exploratory,

descriptive and explanatory studies (Creswell, 2003).


2.3.1. Case study:

The current study adopts case study as its strategy of inquiry. According to

stake (1995) a researcher explores in depth a program, an event, an

activity, a process or one or more individuals. The cases are bounded by

time and activity, and researchers collect detailed information using a

variety of data collection procedures over a sustained period of time.

Robson (2002, pg 178) defines case study as “a strategy for doing research

which involves an empirical investigation of particular contemporary

phenomenon within its real life context using multiple source of evidence.”

This strategy is used because it gives rich understanding of the context of

the research and the process being enacted (Morris and Wood, 1991). The

data collection method employed can be various which include

questionnaire, interview, documentary analysis and observation. Although

case study research is criticized by some researchers as an unscientific

method of conducting a research some consider case study as an important

strategy to explore existing theory and challenge them to provide new one

(Saunders, et al. 2000).

2.4. Time Horizon (Cross-sectional):

Sunders et al. (2003) defines Cross-sectional study as “the study of a

particular phenomenon at a particular time.” The study has a limited time

constraint thus cross-sectional time horizon become convenient for the

present study. The cross-sectional study is also termed as “Snapshot”

study.

The study emphasises on the marketing strategy implemented in year 2009

by the participants thus snapshot or cross-sectional time horizon for the

study facilitates the purpose.


2.5. Data collection method:

2.5.1. Secondary method:

Ghauri and Gronhaug (2002) state that, the researcher should first look for

secondary data relevant to research problem before going out to collect

primary data. Sunders et al. (2007) states that secondary data is basically

raw and published literature which can be further divided in three parts

multiple sourced secondary data, survey-based and documentary. Further

these sub groups are divided as the multiple-source secondary data is

based on either the survey-based or documentary secondary data or a

combination of the two. The survey-based secondary data is a data collation

using a survey strategy which includes questionnaires that are analysed for

an original purpose. The data can be composed from three major strategies

which comprises a census, continuous and regular surveys and lastly

through ad hoc surveys. This can also apply to the research study of a

specific organisation research that utilizes primary data collection

techniques and can be used by itself or in combination with former

secondary data (Saunders et al. 2003). The documentary secondary data

includes written data from organisations databases, communication such as

letters, books, journals, e-mail, databases and unwritten materials such as

voice recordings, CD-ROMs and DVD-ROMs.

Bryman (2008) identifies and states the importance of secondary data that

they are reliable and adequate because they act as documented evidence

from academic and professionals which helps to support the arguments.

This proves the creditability as the findings; results and recommendations

are supported by the previously conducted empirical studies. This also helps

audience to clearly understand the subject put forward by the research

conductor.

The present study for secondary data source uses statistical data available

in form of Fact sheets, white papers, agenda papers, Press release and

online articles, available from government bodies (office of national

statistics and HM revenue & customs), institutions working in that field


(Internet Advertising Bureau, UK online measurement, Department for

Business, Enterprise and Regulatory Reform, Advertising Association, World

advertising research centre), and reliable news websites. The research also

sources some theories and definition from texts and journals available on

the subject. The main source of this information is the database made

available by the Robert Gordon University. The databases like such as

Emerald, Business Source Premier, Mintel reports, Key note reports and

Science direct both online and offline.

The secondary data helps to strength the underpinning knowledge on the

topic. It also helps to determine the research approach and strategy of

inquiry. Since there was not much literature available on adoption of

internet for advertising purpose by small businesses case study was used as

research strategy. It also facilitate the selection of observation and face to

face interview due to lack of available literature.

2.5.2. Primary method:

Clough and Nut-brown (2003) sates primary research as an investigation

tool useful to answer the research questions. The researchers suggest that

primary research compromises of qualitative, quantitative or both and

either can be used depending on the nature of the research being

conducted (Clough and Nutbrown 2003; Saunders et al. 2003; Saunders et

al. 2007; Bryman 2008).

A Small business suitable to the criteria previously mentioned and willing to

contribute to the research is used for the research purpose. The study uses

observation and interview as its research instrument to collect primary

data.

I) Observation:

According to Creswell (2003) the researcher takes field notes on the

behaviour and activities of the individuals at the research site. In these field

notes the researcher records, in an unstructured or structured way,


activities at the research site. The qualitative observer may also engage in

roles varying from a non-participant to a complete participant.

According to Saunders, et al. (2003) there exist two type of observation.

Participant observation has its roots in social anthropology since twentieth

century. It emphasises on understanding the meaning that humans attach

to their actions. In contrast structured observation is concerned with

frequency of those actions. In participant observation the researcher

participates completely in the life of the subject and become the member of

the organisation, business or community. The most popular example of

participant observation is that of Whyte (1955), he lived among poor

Australian–Italian community in order to understand “the street corner

community.”

The study adopts the non-participating structured observation method to

identify and record the activities happening internal and external to the

selected 10 Indian restaurants which have direct or indirect effect on

enhancing the efficiency of its internet advertising. The author spends two

hours to record the activities in the internal environment at each restaurant

and uses internet research to record their external activities.

II)Interview:

The interview helps to gather reliable data relevant to research question

and objective (Saunders, et al., 2003). The researcher may conduct a face

to face interview with participant, interviews participant by telephone, or

one-to-many participant interview. This interview may involve structured or

unstructured open or close ended questions that intend to elicit views and

opinions from participant (Creswell, 2003).

One typology that is commonly used is the level of formality and structure,

where by interview may be categorised as: structured, un-structured or

semi structured interview. Whereas another typology of Healey and

Rawlinson (1994) as stated by Saunders, et al. (2003) categorises as

standardised and non-standardised.


Structured interview use questionnaire based on predetermined set of

question. Questions are read out and answers are recorded on standardised

schedule with pre-coded answers. A structures interview with the owner of

the participant restaurants is conducted which gives an overview of the

company, its business functioning, marketing activities and financial status.

The interview conducted using pre set series of structured open and closed

ended question. The response from the interviewee is digitally recorded for

future reference. An access to the company’s financial data is negotiated

during the interview.

The interviews were used to gain greater practical insights into marketing

within the small businesses being studied. The interview gave insights into

the way marketing activities had changed and evolved (Brooksbank et al.,

1999) within these companies over time.

2.6. Narrative Structure of the study:

The framework designed by Aaker (2001:71) and his collaborators is used

in modified form to systematically address the research problem. The

overall research process goes through four stages form drafting a proposal;

formulating a research design; conducting research and Data Analysis.

2.6.1. Drafting a proposal:

This stage begins with selecting a research area followed by literature

search to formulate the research topic. Marketing was chosen as a research

area based on personal interest and professional development. The

preliminary literature search helped to formulate the topic for the study. A

proposal was drafted which covered key issues such as Rationale, Research

approach, Data collection techniques, Ethical issues, Participant and

Research site. Along with these key issues clearly drafted aim and objective

of the research was also provided.


2.6.2. Formulating research design:

Authors such as Creswell (2003), Saunders, et al., (2000), Frey, J. & Oishi,

S., (1995), Yin (2003) along with few other were referred to develop an

appropriate research design. The research onion typology stated by

Saunders, et al. (2003) was used as a guide.

Fig: 6: Research design

This flow chart explains the flow of research conducted. Research began

with a literature review which helped to gain the understanding of the

subject and develop underpinning on the topic. After which 30 Indian

restaurants were identified in Aberdeen city. They were approached through

email inviting them to take part in the research. The 25 restaurants those

replied were interviewed over the telephone to create a appropriate sample

of 10 restaurants for the study. These 10 restaurants were subjected to a

face to face interview to gain primary data. This data was then tabulated

using SPSS. The SPSS was also used for formulating different charts and

tables required for preliminary finding and final recommendation. Based on


these findings, analysis and conclusions a final draft was composed to be

submitted on the final day.

2.6.3. Conducting research:

Rationale for selecting the topic provided with the proposal was used as a

base for further extensive literature search. Literature search covered

variety of material such as journals, books, press release, reports, white

papers, government websites, institutional websites, news articles, etc. This

extensive literature search helped to develop underpinning on the topic;

decide data collection techniques; sampling and selecting participants.

Based on the advantages on offer and suitability to the study observation

and face to face interview were used as primary data collection instrument.

A structured questionnaire was formulated using mix of close ended and

open ended question. The questionnaire helped to gain insight of the

situation under study.

I) Sampling (Preliminary Interview):

The preliminary interviews along with the outcomes from the

observational study helped to sample the participants for the

research.

Out of those 30 approached restaurants only 25 replied back which

were then approached for preliminary interview. The preliminary

interview helped to establish if the restaurants can be used in the

research or not i.e. do they satisfy the criteria required. After the

preliminary interview 10 restaurants were successfully identified as

eligible participants for the research. These final 10 restaurants were

approach for a second staged interview which was a 20- 30 minute

long face to face interview unlike the preliminary which was

telephone based.


II) Primary Data collection (Interview):

The interview was assisted by pre structured questionnaire with a

mix of open and closed question in it. The closed questions helped to

gains basic knowledge where as open questions gave details required

for the research. Part 1 had opened questions perhaps only with

short answers to gather basic background information about the

company. Part 2-4 included closed ended questions; part 2 contained

questions used to know the role of marketing in the organization.

Part 3 had questions used to determine the relevance of marketing

for the organization and Part 4 sought answers to the owner

manager’s attitude towards marketing. The questioner used Six-point

and five-point likert scale for closed ended questions. Part 5 had

open ended questions these helped the participants to open up and

helped researcher to gather as much information as possible through

the narrative explanations received. Although these narrative

explanations sometimes lacked flow of thought and had random

explanation hence researcher has to be extra careful in appropriately

picking up necessary points only. The part 5 had 2 main questions

and 14 sub questions. Part 5 included questions to identify the online

strategy in practice and the views of the owner manager’s.

2.7. Validating, Reliability and Generalisation:

The current study uses triangulation strategy (Creswell, 2003) which relates

“different data sources of information by examining evidence from the

sources and using it to build a coherent justification for themes.”

The study triangulates findings form observation, interview and literature

which reduces errors ultimately increasing the validity and reliability of the

data. Since the study being of Qualitative in nature it probably cannot be

generalised (Saunders, et al., 2003).


2.8. Ethical consideration:

The only ethical consideration in this research is the proper handling of

financial and other crucial information reviled during the course of research.

Maintaining anonymity requested by the participants. Maintaining

confidentiality of the financial information provided by the participant. And

take care that the data is strictly used for the research and educational

purpose only.

2.9. Limitation of the study:

The major limitation of this study is sample selected. The research was able

to invite 10 Indian restaurants from Aberdeen city only which I believe is

insufficient to represent the Indian restaurant industry in whole Scotland.

However study has been able to develop a model as it had intended.

Perhaps further work is needed with large sample. The questions used in

the questionnaire could have not been able to capture wide range of data.

The interviews were conducted during the busy working hours with time

restrictions of twenty - thirty minutes this could have lead to bias answers.

Some of the interviews were not been digitally recorded so the open ended

section had to be manually written down while interviewee was answering.

This could have lead to different interpretation.


Section 4:

Findings, Analysis and Discussion


1. Introduction

The data was collected from the respondents by means of face to face

interview. The questionnaire was used to assist the interview and gather as

much information as possible. Both close ended and open ended questions

were included in questionnaire. To better understand the collected data it

was transformed into charts and tables, findings were interpreted, analysed

and discussed. These findings and its analysis and discussion are presented

in this section.

The section is divided in two chapters Findings & Analysis and Discussion.

The findings & Analysis chapter represents the collected data in much easy

to understand format by using Figures. These Figures are interpreted and

explained to develop the understanding of the reader. Following chapter is a

discussion of the findings generated which leads to final section of the study

Conclusion and Recommendation.


2. Findings and Analysis

2.1. Demographics:

No of employee Est. Year Year began Online Advertising

Online Experience

R1 26 1975 1999 11

R2 20 1984 1998 12

R3 15 1994 1999 11

R4 15 1996 1996 14

R5 18 2002 2003 7

R6 16 1999 2000 10

R7 8 2005 2009 1

R8 12 2007 2007 3

R9 10 2004 2008 2

R10 10 2002 2006 4

Table 3: Company details (Source: Primary data).

The demographic information helps to understand the size, composition and

distribution of the participants (Lazer, 1994). The varied difference in

demographics of the respondent can be noted by looking at the above

table. The table displays the information of the 10 participating restaurants

named as R1, R2, R3,.....Rn (where n=10) for the purpose of analysis and

to maintain the secrecy agreed with the restaurant’s as terms of their

participation.


The basic criteria for selecting a respondent was a small business with not

more than 30 employees and balance sheet turnover not more than £2.8

million with minimum one year experience in internet advertising. It can be

seen that the participants very well satisfy this criteria. Further it can be

seen that study has a diverse sample of participants with online experience

from minimum for 1 year to 14 years.

2.2. Classification:

The participants are categorized in 3 segments each based on different

criteria. First segmentation is based on annual sale turnover of the

restaurants. Second is based on the online experience and third is based on

the age of the restaurants. These segmentations will assist the research in

analysing the findings deducted from the interviews.

2.2.1. Based on Annual sale turnover:

Table 4 below gives an idea of the sales turnover of the restaurants with

the deference in sales figure of previous two years. This data was collected

through preliminary interview stage after the agreement of participation

received from these restaurants out of those approached. Based on the

percentage of increase in sale these restaurants can be classified in to four

categories namely, Outperformers, Mediocre, Low performers and

Nonperformers (Table 5).


Annual sales turnover 2008 (£)

Annual Sales turnover 2009 (£)

Increase in Sales turnover(£)

Percentage increase

R1 530000 720000 190000 36%

R2 465000 650000 185000 40%

R3 430000 560000 130000 30%

R4 500000 600000 100000 20%

R5 480000 600000 120000 25%

R6 565000 680000 115000 20%

R7 520000 580000 60000 10%

R8 305000 350000 45000 15%

R9 320000 320000 0 0%

R10 400000 400000 0 0%

Table 4: Comparison of annual sales turnover between 2008 and 2009.

Outperformers Mediocre Low Performer Non Performer

More than 30% 20 - 30% 10 - 20% Less than 10%

Table 5: Categorisation of participants based on performance in market

This categorisation is purely based on the increase in annual sales turnover

values between 2008 and 2009. Those performing above 30% are named

Outperformers; those performing above 20% are named as Mediocre; those

performing above 10% are named Low performers and those below 10%

are named as nonperformers.


The incremental sale represents intermediate marketing measure which can

be linked back to the economic performance (Stewart, D. W., 2009). Thus it

can be assumed that the outperformers were successful in implementing

the efficient internet advertising strategy which led them to increase their

profit. Hence, the classification will help further to identify the do’s and

don’ts of internet advertising by focusing on the activities undertaken by

outperformers and avoiding the mistakes done by low performers and non

performers.

2.2.2. Based on online experience:

Early Intermediates Experienced

No of

participants 4 2 4

Percentage 40% 20% 40%

Table 6: classification of participants based on online experience.

The participants can also be classified based on their years of online

experience. They are classified in three stages early stage, intermediate

stage and experienced stage. Those with less than five years of experience

are assumed to be in their early stage. Those with five and less than ten

years of experience are said to be in their intermediate stage. Finally

category of experienced stage includes those with more than ten years

experienced.


Fig 7: Relation between years of online experience and percentage increase in sale for 2009.

Although from the above figure it can be said that the years of online

advertising experience can have a significant influence on the increase in

sales of these restaurants. The 30% participants out of those 40% which

fall under experienced category also fall under Outperformers category

where as the remaining 10% which could not perform falls under mediocre

category. The reason behind underperformance of these 10% participants

despite being in their experience stage will be discussed further in the

study.


2.2.3. Based on Age:

Early stage (0-5)

Intermediates (6-10)

Experienced (11-15)

Adopts principles and practices of marketing

25 100 75

Marketing is an unnecessary burden (% agree)

25 0 0

Yet to reap the benefits of marketing (% agree)

25 0 0

Unaware of the benefits of marketing (% agree)

75 0 0

Marketing efforts have been abandoned (% agree)

50 0 0

Presence of a marketing department (%)

0 100 25

Designated marketing personal (%)

0 100 100

Database used (%)

25 50 100

Active business plan (%)

25 100 100

Presence of a marketing budget (%)

50 100 100

Table 7: Analysis by age.


From the above table we can see that restaurants in their early stage are

less likely to have a database, business plan or a marketing budget. They

believe that marketing is a burden, not aware of benefits it has to offer and

have abandoned the marketing. This kind of attitude more likely falls under

“Marketing Independent” or “Marketing week” category as it shows that

they are not at all market oriented. This result supports the stage/growth

approach that small businesses are confident about marketing only after

reaching certain size or level of turnover (Siu and Kirby, 1998). Also some

participants from early stage have active business plan and marketing

budget and adhere to marketing principles which supports Padmore and his

colleagues (2006) who suggests that businesses from early stage have a

positive attitude towards marketing.

Our data correlates with that of Padmore and his colleague’s (2006)

research which shows small businesses gradually change their attitude

towards marketing over time. In early stage they are more “marketing

week” reluctant from marketing; in intermediate stage they are “marketing

dominated” their marketing activities reach at its plateau and as they grow

with their experience they are “Marketing led” organisation were there

marketing activities might start to slowly regress (Simpson and Taylor,

2002).


2.3. Planning:

Fig 8: Planning: Time and efforts spend on Business planning and developing marketing

strategies.

The above figure helps to correlate the time and effort spend on business

planning and developing marketing strategies and plans. It can be clearly

seen that only a total of 30% are spending pretty much or great deal of

time and effort on formulating business plan, developing marketing strategy

and plan. This shows that formulating business plan and marketing strategy

is not of much significance for small businesses. Thus contradicts the

findings of those empirical researches trying to prove that planning leads to

profitability and assists in survival (Boyd, 1991; Robinson & Pearce, 1983).

Whereas, organisations write business plans only due to coercive and

mimetic institutional pressure (Honig, B. & Karlsson, T., 2002). According to

participants 40% spend little time on business planning and 30% spend just

enough time on developing marketing plans. Which suggests that their

exists some amount of mimetic institutional pressure among the

participants industrial field with regards to writing a formal business and


marketing plan. Figure also shows that 80% participants are more or less

involved in business planning and developing marketing strategies and

plans thus at this point these 80% seem to fall under “Marketing led”

category although after further data analysis some of them might fall out of

the category (Simpson, M. et al., 2006).

2.4. Preparedness:

Fig 9: Preparedness: The chart explains three elements representing the preparedness of the

participants against external forces.

Data warehousing is a collection of tasks involving customer and market

information. It involves collection of information; storing and integrating

information inside the database and applications for retrieving and

presenting the data when required. It improves decision making and

organisational performance (Watson, H. J., Goodhue, D. L. & Wixom, B. H.,

2001). Data warehousing in its actual sense is a costly activity the data

warehousing term used in this research refers to customer and market


database at smaller scale. Analysing the competitors offering means

constant surveillance of rival firms activities this helps to relate the

organisation with the industry in which it competes and stay alert (Porter,

M. E. 1998 and M. Peyrot et al., 2002). Market research generates

information which aids in building the Customer and market database;

exploring new opportunities, segmentation and product; deciding effective

marketing mix and improves understanding of marketing as a process

(McDaniel, C. D. and Gates, R. H., 1998). Hence all the three elements

together contribute towards preparedness of the organisation against

external forces such as changes in market trend, consumer behaviour, taste

and attitude.

It can be seen from the figure that only 30% spend pretty much time on

data warehousing, 20% spend pretty much time on analysing competitors

offering and 0% spend pretty much time on market research which clearly

shows that very few of the participants are prepared for competition from

rival firms, changing customer needs and taking up new opportunities. But

at the same time it cannot be said that participants are completely ignorant

as significant number of participants are either spending more or less time

on data warehousing, competitor’s analysis and market research or are

planning to. The amount of time spend by the participants can also be

correlated with the participants experience of conducting those activities

such as those spending little time are just beginners; those spending

enough time are intermediates and those spending pretty much time are

experts.


2.5. Use of Performance Management System on Marketing

Strategies:

Fig 10: PMS on Marketing Strategies: the chart explains amount of time spend on conducting

Performance Management System (PMS) on Marketing strategies.

The figure shows that a total of 60% of the participants spend more or less

time on conducting PMS on marketing strategies out of which 30% spend

enough time and 10% spend pretty much and great deal of time. The

participants are spending time on PMS because they want to know how

efficient are their marketing strategies; how well they are progressing

towards their predetermined objectives; what can be done to improve their

marketing or Return on Investment on marketing activities (Purbey, S. et.

al., 2006).


2.6. Modifications based on PMS and Information gathered:

Fig 11: Extent of modification based on PMS and information gathered: the chart explains the extent of

time spend by participants on modifying their business activities based on the PMS results and

information gathered.

It can be seen that a significant number of participants spend more or less

time on modifying their business activities based on PMS results and

information gathered. 70% spend more or less time on modifying external

promotional activity; 80% spend more or less time on developing new

products and changing price. The observation of the participants gives the

reason behind the huge number of participants modifying their business

activities. The participants understand that by implementing changes in

marketing activities based on the results from PMS will help them to

achieve their marketing objectives more efficiently. Also by developing new

products and changing prices based on market information gathered helps

them to efficiently compete against their competition. The data from Figure


9, data warehousing and Figure 10 corresponds with the numbers from the

Figure 11 justifying that all those conducting PMS and data warehousing

modify their business activities based on the results and information

gathered.

2.7. Owner/Managers Understanding of External Market:

Fig 12: Understanding of external market: the chart explains the owner managers

understanding of their external market.

The above figure shows that 40% of the participants disagree to that

statement that they have guaranteed business in a stable market which

shows that these participants face irregularity in business in their area due

to threat from substitutes and changing customer preferences. The 20%

participants are unaware of their market situation which corresponds with

the Figure 9 which shows that 20% do not spend any time on data


warehousing. Further it can be seen that 80% of participants agree that

there exists an intense rivalry among competition and they are trying to

survive through it. This explains that participants are aware of the

significance competition and corresponds with the Figure 9 were 80% of

participants analyse competitors offerings. 80% participants agree that

there exists threat of new entrants which can be supported by the facts

derived from observation that economies of scale does not exist; low

working capital required; no proprietary product differences and easy

access to distribution channel. Further 20% participants agree that

suppliers and customers have huge bargaining power as due to competition

they have different options available.

2. 8. Marketing VS Categories:

Marketing activities VS Categories OP M LP NP

Dedicated marketing personal 100% 100% 0 0

Customer and Market database 100% 67% 50% 0

Involvement in marketing activities 100% 100% 50% 0

PMS on marketing strategies 100% 67% 0 0

Undertaking modifications due to PMS 100% 67% 0 0 OP = Outperformer, M=Mediocre, LP= Low performer and NP= Non performer. % = % of

participants.

Table 8: Marketing activities performed by different categories:

The table clearly shows that all the outperformers perform all the

mentioned marketing activities proves that outperformers are “Marketing

led” organisation. Mediocre on other hand are slowly devolving into

“Marketing led” by making its journey through “Marketing dominant” stage


by using “strategy A” of Role and Relevance of marketing model (Simpson

and Taylor, 2002). Currently low performers can be seen showing

involvement in marketing activities such as giving suggestions for design of

website; maintaining the advertising campaigns through Google Analytics;

and daily maintenance of their profile on the social networking sites. Low

performers are also collecting, maintaining and utilising customer and

market information for the purpose of advertising. Thus low performers can

stated as “Marketing week” organisation. Non performers can be directly

referred as “Marketing independent” organisation which currently does not

feels the need for marketing. The organisation that adopts marketing

principles and undertakes marketing activity into its daily functions are

presumed to have superior performance however it is also found that some

organisations manage to be successful without undertaking marketing but

by focusing on technical and/or production capabilities (Pelham, 2000).

2.9. Understanding the Marketing activities of Outperformers:

R1 R2 R3

Online Advertising tools and techniques used

Website Website Website

Food Reviews sites

Food Reviews sites

Paid search

Social Networking (free)

Paid Search Social network (paid profile)

Social Networking (free)

Reason for Shift Cheap Targeting

efficiency Targeting efficiency

Target more audience

Value for money Measurability

Cost effective

PMS on Online Advertising No of bookings No of bookings No of Orders

No of hits on website

No of Orders No of hits on website

Use of Google analytics


promotional code

Google Analytics Report from social network

Advertising mediums other than online

Leaflets Leaflets Promotional Vouchers

Books Inviting Critics Inviting Critic

Television Shows

Magazines Sponsoring

Inviting Critics Local newspaper reviews

Word of mouth

Table 9: Marketing activity performed by Outperformers:

This table will help to understand what are the marketing activities out

performers undertake that makes them successful. Hence out of the 10

participating restaurants this table only focuses on 3 outperforming

restaurants. This will help us in a form of a guide to formulate the model for

effectiveness of internet advertising for small businesses.

2.9.1. Internet advertising tools and technique:

Here after, the explanations are based on the responses received from the

participants for the open ended question presented in part 5 of the

questionnaire. The out performers are focusing on the current popular

advertising formats website, paid search and social networking websites

along with Food Review site which is also an important advertising channel

for the respondent’s specific industry. The Review is a very powerful

channel it can make or break the reputation of a restaurant (Blank, G.

2007). There are about 500 million users on Facebook; UK alone has 40.5

million active online users. IAB in its report states that Paid search accounts

for 60% of the advertising revenue generated by internet medium (IAB,

2010).


2.9.2. Traditional Mediums used:

Inviting critics followed by leaflets are the industry specific popular channels

of advertising. Reviews written by food critics published in food guides and

food magazines popular among foodies. The critic’s review is a mechanism

through which social status of the restaurant is made visible (Blank, G.,

2007). Leaflets or hand bills have been age long traditional medium for

advertising outdoor with low budget.

2.9.3. Performance Management system:

All the outperformers have their own performance management system

which is used to gauge the effectiveness of the internet advertising strategy

implemented. Currently out performers are using performance measures

specific to the individual channels used. Number of orders received, Number

of bookings received and Number of hits are the measures specific to

website. Reports provide by the individual social network provider are used

to gauge the performance of social media advertising. Use of promotional

code is a measure which can be used for both website and social media

advertising depending on the place where it is been promoted from. Last

but not the least paid search channel is gauged by using the Google

analytics which is specific for ads on Google search engine. This shows that

the outperforming participants are using Google search engine.


2.10. Model of effective online advertising:

Thus looking through the patter developed in the above discussion a model

of effective Internet advertising can be drafted.

Key elements Definition Example

Format

The Internet advertising

format used for the

campaign should at least be

able to capture as much as

possible impressions.

Banner ad, pre-post roll

over video ads, paid

search, online classifieds,

etc.

Integration

Integrated marketing

should be practiced. Such

that traditional advertising

should direct customers to

internet advertising.

Business cards and Leaflets

with web address printed

on them, discount vouchers

for online ordering,

affiliated advertising, etc.

Performance

Measurement

System

A performance

management system should

be in place to track the

performance of the

campaign.

Google Analytics, Google

Adwords, etc.

Table 10: Model of effective Internet advertising (Source: Author: - Data analysis)

I) Format:

The format used for the Internet advertising should be able to capture as

much as audience as possible. The current trend of large advertiser’s

investment in internet advertising should help us to understand the

importance of the format. The statistics show that paid search showed

9.5% increase in 2009 to reach £2.15 billion this shows that more and more

marketers are choosing paid search which also explains its effectiveness.

Facebook profile as an instrument for creating publicity is a good medium

only if certain amount of efforts and time is invested. Thus to make sure

that advertisement is exposed to as much as possible audience right format


needs to be chosen. The previous chapter identified the commonalities

among the out performers which mention website, social networking, food

review website and paid search. These represent the ideal five places used

by outperformers to advertise.

II) Integration:

The empirical studies have proved that for the online marketing to be

effective all the marketing communication should be integrated together

(Vescovi, T., 2000). From the previous chapter it is clear that R1, R2 and

R3 all of them emphasise on integrating their marketing activates. The

owner/manager understands that internet is a vast space with millions of

websites and millions of users hence garbing attention of the users is

crucial. R1, R2 and R3 uses traditional mediums such as Leaflets,

Magazines, Promotional vouchers and local newspapers to link back the

traffic to its website.

III) Performance Management System:

Performance management system helps the marketer to track the

inefficiency in its strategy. Results from which can be used to increase the

efficiency of the advertising strategy. R1, R2 and R3 uses the Google

Adwords and Google analytics detailed statistical reports which includes

reports such as Average Cost per impression; Cost per click; Click through

rate; etc and Conversion reporting which includes reports such as

successful sales; leads and submission. On other hand they also use basic

measurers such as number of internet order, number of booking and

number of visits as key determinant for tracking the performance of its

Internet advertising.


3. Discussion

The pervious chapter has transformed the data into information and this

chapter will be transforming that information into knowledge. This chapter

will conclude with final two objectives mentioned in the introduction section

of this research.

• To develop and understanding of the marketing activities of

participating sample case studies.

• To develop a model of effective internet advertising for Small

Businesses.

3.1. Participants:

The demographics explained in the previous chapter gives a clear idea

about the size, composition and distribution of the participants. The

research had specific requirement for selecting the case studies. They had

to be Indian restaurants from in and around the city of Aberdeen. This

helps the research to give more specific and targeted result since both the

industry and the location of the research is clearly defined. The other factor

behind selecting the restaurant industry specifically serving Indian cuisine

was the convenience. The final ten participants were symbolised as R1, R2,

R3, R4......Rn (where n=10) for ease of representation, avoiding confusion

and maintain privacy of the participants. These restaurants are officially

classified as small businesses as per the definition previously mentioned.


3.2. Classification:

Three types of classifications were identified and utilised within the

research. Classification based on percentage increase in annual sales

turnover, classification based on online experience and classification based

on age.

3.2.1. Classification based on performance:

First classification was based on the annual sale turnover of the

participants. The increase in sales was key determinant used for

classification. The participants were classified into Outperformers, Mediocre,

Low performers and Non performers. This classification assists in

determining the answers to the questions such as; Who is able to

effectively use internet advertising? How are they able to use it effectively?

What are they doing that makes them effective? Why are non performers

not able to use it effectively?

The out performers included 30% of Participants; Mediocre included another

30% while low performers and non performers both included 20% each.

The Figure below clearly shows that R1, R2 and R3 are the outperformers;

R4, R5 and R6 are the Mediocre; R7 and R8 are Low performers while R9

and R10 are the non performers. Hence for the purpose of the further

analysis the study only focuses on the out performers namely R1, R2 and

R3.


Fig 13: Increase in sales for each participants. (Source: Primary data)

3.2.2. Classification based on online experience:

The second classification was based on the number of years of experience

of internet advertising. This classification was tabulated in table 5 which

states three categories under this classification. Findings from the previous

chapter suggest that restaurants in the experienced stage have significant

impact on the annual sales turnover. From Table 3 and Table 6 we can see

that experience category includes four restaurants with online experience of

11, 12 and 14 i.e. R1, R2, R3 and R4 respectively. Hence we can see the

consistency in both the classification except the R4 which according to

previous classification falls under mediocre category.


3.3. Studying the marketing activities of R1, R2 and R3:

As mentioned in the beginning that to understand the factors responsible

for the effectiveness of the internet advertising it is necessary to study the

marketing activities of the Out performers/Experienced i.e. R1, R2 and R3.

3.3.1. R1 and R2’s marketing activities:

R1 and R2 is a family owned business and the marketing activities are

handled in house only. They have a family member who completely looks

after advertising. All the advertising including those of internet advertising

are formulated by this person who works as a marketing manager. The

marketing manager of R2 does not have any formal degree but has quite a

huge experience on internet advertising since he pioneered internet

advertising in R2 in 1998. This marketing manager of R1 holds a Masters in

business administration in marketing degree hence as a positive attitude

towards advertising. The empirical studies show that for adoption of any

innovation the decision maker should be positive attitude about it

(Dholakia, R. and Kshetri, N., 2004).

R1 uses three internet advertising channels first website, second food

review site and last social networking (free profile). R2 uses Paid search

other than those used by R1. Their activities are more or less similar since

they use the same channels.

Although they looks after every aspect of marketing development of

website and maintenance is out sourced. But they work as a liaison

between the restaurant and the third party. All the marketing material and

text content is made by marketing manager himself which is then provided


to the web developer. Similarly marketing manager also makes all printed

marketing material by himself. This shows marketing’s manager’s

involvement which is a key factor for internet communication (Vescovi,

2000). The managers from both places can be said to plays the role of a

project leader supporting the owner who with is charismatic personality

playing the role of the champion.

Food review website is considered as a crucial channel to connect with

customers. Marketing Manager himself publishes articles and review for

their restaurant. The one reason why food review site is consider important

is because it is free of charge and allows connecting with millions of foodies

from around the world. They look at it as a medium to develop its

reputation and brand image among the foodies.

After conducting a market research and finding a boom in social network

advertising marketing manager of R1 recently made his decision of entering

into social network advertising while R2 has been on the social network

since last few years.

R1 is a “marketing led” organisation it always tries to look for new

opportunity. To increase its market share in the market R1 has recently

launched its own range of pickles making its first move in branding. Apart

from internet advertising R1 also does some traditional advertising such as

leaflets, Recipe Books, Television shows and inviting critics. Through all

these medium it always tries to promote its website and attract more and

more traffic on it. This method of integrating the mediums helps R1 to

increase its performance. For. e.g.: R1 was recently selected for a popular


television show hosted by a popular personality from food industry for a

competition. This creates a buzz among the foodies and force traffic to

website.

R2 apart from internet advertising uses different traditional forms of

advertising by which it tries to integrate back to the website. Traditional

methods such as Leaflets, inviting critics, Magazines and local newspaper.

R2 uses promotional code and Google analytics other than those used by R1

for PMS on internet marketing activity.

R1 uses basic method of tracking website performance by recording the

number of bookings place via internet and number of visits received on the

webpage. It does not have to charge extra for it as number of bookings are

recorded automatically on the server and data regarding number of visits is

provided by the website hosting service provider itself.

The use of promotional code is simple and easy way of tracing the

effectiveness of a website or social network advertisement. R2 publishes a

promotional code on its website whenever a promotional code is used a

recorded it kept this then helps to track the performance of that promotion

and its medium. R2 also uses Google analytics which is a paid application

provided by Google. It provides assistance to track the performance of

search engine adverts and display adverts made throughout Google

network.


3.3.2. R3’s marketing activities:

R3 is a sole trader he owns and runs the restaurant on he’s own. He has

appointed a person to look after his marketing along with some other

activities. So R3 does not have dedicated marketing manager. The manager

looks after both the internet advertising and traditional once. Most of the

internet advertising activities conducted by R3 are similar to R1 and R2

other than the use of sponsoring as traditional advertising. It sponsors a

local football club where R3 gets a chance to advertises and publicise its

website and divert traffic to its website.

Commonalities

Online Advertising tools and techniques used

Website Food review

website Paid Search

Social Networking

(free)

Food review website

PMS on Online Advertising No of bookings No of Orders

Report from social network

No of hits on

website

Use of promotional

code Google Analytics

Advertising mediums other

than online Leaflets Magazines

Promotional Vouchers

Books

Local newspaper reviews

Inviting Critic

Table 11: Commonalities between R1, R2 and R3. (Source: Primary data)


3.4. Advertising Channels:

3.4.1. Paid Search:

Findings published in the previous chapter suggest that R2 and R3 use paid

search as one of its advertising formats. The search advertising on Google

is named as Google Adword. Google Adwords has a onetime joining fee and

monthly cost-per-click as decided by the advertiser. Google advertising

network gives a wide range of exposure to the business. Advertising

through the search network the ad is published alongside of the other

relevant ads on different search engines along with Google.

The Google search network consists of:

• Google local

• Froogle

• Ask Jeeves

• AOL

The paid search consists of 60.7% of overall online advertising spend in

2009 weighting £2.15 billion (IAB, 2009). This proves the popularity of the

medium among the marketers. Thus R2 and R3’s choice of format is key

factor behind its effective online advertising campaign. Another key factor

for its successful online advertising is the placement of ad in relevant

content area. Google matches the keywords specified by the advertiser to

the search terms entered by the user hence it is every time exposed to the

targeted audience (Google Adword, 2010). Google also helps the

advertisers by providing detailed reports of the search advertisement.

These reports gives information such as click through rates, frequently used

keywords, etc. It also provides the advertiser valuable suggestion on which


key word can best serve to the advertiser’s content or what changes should

be made to the contents. Popularity of Google helps the brand to develop

brand awareness among its users. It also helps for forecasting via its

pictorial charts and graphs giving results in economic terms. The pictorial

graphs and charts makes the financial and marketing terms easy to

understand.

Since the advertisements are listed on the query entered by the user it has

high purchase intent and likely to reach wider and specifically targeted

audience. It gives more control on match type by giving the options such as

phrase match, exact match and broad match. Paid search is much faster, if

an ad is submitted it only takes few hours to be online. This is helpful for

running a camping on and off. The reports provided by Search

advertisement provider consist of traffic volume, returns and rankings this

reduces cost of using a third part service for maintain an advert giving the

advertiser more control. Paid search has more conversion rate than others

such display ads (Chaffey, D., 2008).

Small businesses can benefit from advertising on Google and take

advantage of the benefits it has to offer. Precise targeting can help to get

more traffic to the website. With Google Adword advertiser do not have to

be a marketing expert hence a owner or a manger of any small business

can easily launch and manage a search advert. Since it is launched and

maintain by the advertiser itself cost of out sourcing the marketing

campaigns is reduced.

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3.4.2. Social Networking:

The social network advertising is done by all three of the out performers.

This justifies that social network advertising is gaining popularity. R1 and

R2 are using the free profile whereas R3 is using the paid one. The only

difference between both the profiles is that paid profile provided more

control over the advertising campaigns. There are different options to

choose, different reports, charts and graphs to assists.

The social media advertising is booming along with the increasing social

medial craze. The social networking websites such as Facebook, twitter,

myspace, etc. provide both paid and free service for advertisers. Hence

anyone from micro business to multinational company can advertise on

social media. The average online user in UK spends 20% of his/her online

time on Facebook. The UK online population as estimated by UKMO and

Nielsen (2010) is 38.8 million. Thus, if properly used social network such as

Facebook can give alarming benefits. According to the Stelzner, M., (2009)

the top benefits of the social network marketing is generating exposure

followed by increasing traffic and finding new business partners. The

Facebook provides the opportunity to expose to ‘n’ number of peoples but

marketer has to take efforts to attract the desired target audience to its

profile (Vescovi, T., 2000).


3.4. 3. Food Review websites:

R1 and R2 both do food review website advertising. It is basically a free and

sometimes paid listing where a restaurant owner or a manager can submit

his or her restaurant to the website for listing. Once the website is listed on

the websites server the owner/ manager can log on to the website and

change or update its details. The website gives option to owner/manager to

write a review for his hotel. The website also has some regular visitors

whom it allows to write, comment or rank its experience of visiting the

restaurant to share with other users.

These sorts of websites are basically a portal to generate awareness among

the foodies, build and maintain a reputation among the foodies and track

the performance of their competitors. The owner/manager gets an

opportunity to directly communication with its old and potential customers.

This also helps to build and maintain a healthy relationship with the

customer.

3.4.4. Website:

Website is a beginner’s step into internet communication. All the three

outperformers have a full functioning website. The website serves different

function for a business. It also works as a virtual store while at same time

can be used to run internet advertising campaign. It can also work as a

brand awareness tool. It is a one site destination for the customers for all

the information regarding the products. Its increased interactivity allows it

to be used as a real time assistance centre. The website allows us to


provide information, sales, generate leads. The effectiveness of the web site

is gauged by the number of visits received.

Paid Search Social Network Food review Website Website

Targeted audience Increasing

popularity

Free or paid Different

functions

Faster Free and paid

profiles

Control Brand

awareness

Assistance provided Exposure Direct marketing to target

customers

Customer

service

Reduce cost of

third party

Traffic Competitors analysis

More conversion

rate

New business Customer relation

Direct interaction with

customers

Table 12: Advantages of important channels of advertising online


3.5. Advantages to small businesses:

The above table summarises the key advantage of the important channels

of advertising. This helps us to easy understand the significance of the

channels. Although these advantages sound generic they are of crucial

importance to small businesses. The features such as “”reduces cost of

third party”, “Free”, “Assistance provided”, “Targeted audience” these

feature can save cost, help to understand complicated terms and functions

in their early stage. Whereas features such as “Faster”, “Exposure”,

“Competitor analysis”, “Direct interaction with customer”, “customer

service” will help them to increase their competencies and be competent in

the market.


Section 5: Conclusion and

Recommendation


1. Conclusion and Recommendation

1.1. Conclusion:

The main aim of the study was to explore the factors responsible for the

effectiveness of the online advertising by small business in Aberdeen. The

study intended to develop a model for effective online advertising for Small

businesses.

The central research question for the study was: What is the effective

model of online advertising strategy for small businesses? This was

intended to answer after narrowing down through answering the

subsequent questions. The answers for the subsequent questions are as

follows:

1.1.1. What are the factors responsible for growth of UK online

advertising?

The Key Drivers of Growth for UK online advertising expenditure are as

follows:

• Advertiser confidence – Marketers are regaining their confidence

on the market hence the rie in overall marketing budget can be seen.

• More people online – According to the study conducted by UK

Online Measurement Company (UKOM) and Nielsen, the UK’s active


online user base has registered an increase of 4.4 million that is total

of 39.7 million in comparison to 35.5 million in February 2009

• Faster broadband drives video advertising – Increasing online

population; availability of broadband facility to more and more people

(90% of UK online population) and increased broadband speed of

over

• Social media fever grips Britons – An average online user in UK

spends its 20% of online time socializing on Facebook. Thus,

providing the golden opportunity for the marketers to engage mass

audience with interactive adverts (IAB, 2009).

1.1.2. Why are SMEs not benefiting from online advertising?

The study answers this question by explaining “Six natural trouble” theory

explained by Vescovi, T., (2000) in this paper. In this theory explains six

problems affecting the Small businesses approach to internet

communication. Although it explains problem raised in internet

communication it can be generalised for online advertising.

• Unclear communication: He explains that most of the small

businesses launch a website with a “me too” attitude and then forget

about it. He says that internet provides opportunity to interact with

the customers and it should be revitalised daily.

• New communication paradigm: Since being the medium being

new to small business two problems raise first cost incurred in buying

new media equipment. Second, competencies required to use the

new medium and its equipments (Hoffman and Novak 1996b). Thus


Small businesses has to prepare them self before adopting online

advertising.

• Non-integrated marketing communication: Developing a website

is not enough small business have to be innovative to integrate all its

marketing activities to attract the customers to its website

(Walczuch, R. et al., 2000)

• Company involvement in internet challenge: The business

should completely involve itself into the marketing activities and

projects. These projects can be lead by the manager playing the role

of the project manage and owner closely overlooking the project

playing the role of champion along with rigorous planning of

strategies (Vescovi, 2007).

• People for internet communication: Most of the time it is

assumed that the internet is a technical stuff and only technical

experts should solve it. Although the website is a technical stuff the

content that it carries is a marketing material and need a touch of

marketing personal (Vescovi, 2000).

Along these factors there is some misconception among small

businesses that online advertising is only for large brands ready to

spend huge amounts. Secondly it does not give benefits and last there is

no security


1.2. What is the effective model of online advertising strategy for

small businesses?

Key elements Definition Example

Format

The online advertising format

used for the campaign should

at least be able to capture as

much as possible impressions.

Banner ad, pre-post roll

over video ads, paid

search, online

classifieds, etc.

Support

Supportive measures should

be implemented for the

campaign to be popular.

Online business cards,

leaflets, online discount

vouchers, affiliated

advertising, etc.

Performance

Measurement

System

A performance management

system should be in place to

track the performance of the

campaign.

Google Analytics,

Google Adwords, etc.


1.3. Recommendation:

The study was conducted in south west London using 10 case studies drawn

from specific population. London is fairly representative of UK consumers;

there can be significant differences if the research is carried out in other

countries or even other parts of UK. Therefore it is necessary to confirm

these findings in a broader intercultural context. Specifically, the following

question should be further studied in international context:

• What is the effective model of online advertising strategy for small

businesses?

• What are the factors responsible for growth of world online

advertising?

• Are SMEs from other country benefiting from online advertising or

not?

• What are the strategies used by SMEs in other countries for online

advertising?

Finally, this study can be conducted on much wider scale and using

quantitative methodology. Also there exists a huge gap in literature on

adoption of internet advertising by Small business. Thus more research

needs to be done under this topic.

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Questionnaire Part I: Company Details

1. Name: 2. Address:

3. Contact Details:

4. Industry sector:

5. Major products:

6. Major customers:

7. Number of employees:

8. Annual sales turnover:

9. Year began trading:

Part II:

1. The role of marketing within the organisation (yes/no/don’t know):

1. Do you have a marketing department?

2. Does your company have dedicated marketing personnel?

3. Do you collate and store information on customers and the

market place?

4. Does your company have an active Marketing business plan?

2. Time and effort spent on (Six point Likert scales, “none” to “a great

deal”):

1. Preparing business plans for the future.

None Planning

Little Enough Preety much Great deal

2. Developing marketing strategies and plans.

None Planning


3. Developing new products or services.

None Planning


4. Preparing external communications/promotions activities.

None Planning


5. Maintaining the customer and market information database.

None Planning


6. Analyzing competitors’ offerings.

None Planning


7. Evaluating the performance of marketing strategies and plans.

None Planning


8. Undertaking market research.

None Planning


3. What is your marketing budget? (Include all activities associated with

gathering market information and selling) (Free response).

4. Extent of marketing activities (six-point Likert scales, “not at all” to

“a great deal”) (Extent to which you):

1. Modify your external communication/promotional activities as a

result of tracking their performance.

Not at all Planning Little Enough Preety much Great deal

2. Develop new products and services as a result of marketing

information gathered.


3. Change the product prices on the basis of marketing information

gathered.


4. Adapt the channels of product distribution on the basis of

marketing information gathered.


Part III:

1. The relevance of marketing for the organisation (five-point Likert scales, “strongly disagree” to “strongly agree” plus “unable to respond”) 1. We have guaranteed business in a relatively stable market.

Strongly Disagree Disagree Niether Agree strongly Agree

2. We are trying to survive against the competition. Strongly Disagree Disagree Niether Agree strongly Agree

3. The level of competition in our market produces intense rivalry between competitors.


4. We operate in a market where it is relatively easy for new competitors to emerge.


5. Our suppliers have few customers and rely heavily upon our business.


6. Our customers have a limited choice of suppliers and rely on our ability to supply their needs.


7. Marketing is of little use to this organization because we have guaranteed business.


8. We are doing fine without marketing and it is not expected to be of much use in the future.


9. The achievement of marketing goals involves everybody in the organization.


10.All employees of the organization understand their role in achieving an integrated effort to achieve a marketing orientation.


11.Marketing is important for expansion and growth of the company. Strongly Disagree Disagree Niether Agree strongly Agree

12.In the future we would like to grow the company. Strongly Disagree Disagree Niether Agree strongly Agree

13. In the future we would like greater market penetration with our existing products.


14.In the future we would like greater market share with our existing products.


15.In the future we would like to develop new products for our existing market.


16.In the future we would like to diversify into new markets with new products to grow and develop.

Strongly Disagree Disagree Niether Agree strongly Agree Part IV:

1. Your assessment of your organisation (Five-point Likert scales, “strongly disagree” to “strongly agree” plus “unable to respond”). 1. This organization has a strong marketing orientation and whole-

heartedly adopts and adheres to the principles and practices of marketing.

Strongly Disagree

Disagree Niether

Agree

strongly Agree

Unable to respond

2. Marketing is an unnecessary burden for the organization.

Strongly Disagree

Disagree Niether

Agree

strongly Agree

Unable to respond

3. This organization has invested heavily in marketing but has not,

as yet, reaped its benefits.

Strongly Disagree

Disagree Niether

Agree

strongly Agree

Unable to respond

4. This organization is unaware of the benefits that marketing can offer.

Strongly Disagree

Disagree Niether

Agree

strongly Agree

Unable to respond

5. This organization has tried some marketing in the past and,

having seen little reward for this effort, has abandoned such efforts.

Strongly Disagree

Disagree Niether

Agree

strongly Agree

Unable to respond

6. There is little need for marketing in this organization because it

does not face competition.

Strongly Disagree

Disagree Niether

Agree

strongly Agree

Unable to respond

Part V:

1. Your online advertising strategy: (open ended questions) 1. When you did first started using online medium for advertising?

2. What online advertising tools and techniques are you using?

3. Have you always being using online advertising? If not why did you switched from traditional to online advertising?

4. What was your actual need behind using online advertising?

5. Do you do performance measurement on online advertising?

6. Which other advertising mediums do you use other than online?

7. Do you feel you are getting sufficient outcomes (in terms of sales) for your online advertising expenditure?

8. If yes; why? What is it that you think you are doing differently?

9. If No; why? What is it that you think you can do differently?

10.If I ask you to put that outcome in figure what figure it would be in terms of number of hits on webpage; sales increase and % wise increase in overall business?

2. What are your views about: 1. Importance of place element of advertising? Do you consider it

while advertising online?

2. Importance of format of advertising? Do you consider it while advertising online?

3. Importance of integrating all the mediums of advertising used? Do you consider it while advertising online?

4. Importance of Performance Management System to calculate return on Investment on online advertising? Do you consider it while advertising online?

CRITICAL ANALYSIS OF EFFECTIVE INTERNET ADVERTISING DONE BY SMALL BUSINESSES

Business

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