Chapter 8

Question 1

Advertising in the new millennium:
how the Internet affects consumer judgement and choice

Answer 1

 The vastness, scope, and extent to which the Internet permeates modern life has
made it a critical platform for advertising

 “The internet” and “online behavior” do not exist as unitary constructs, at least from a
psychological perspective

 The richness, scope, and diversity in web content points to caution in making too
strong an inference based on a singular study about how we behave online and are
affected by web advertising

 People’s interactions with the web encompass a broad array of cognitions, emotions,
and behaviors, ranging from searching information, chatting, to playing games and
buying (and returning) products and services
o Each of these web uses may affect psychological processes differently

 Despite all the variety in web content and despite rapid changes in technology or
appearance, quite a number of features of the Internet have remained stable over the
years

 Interactive marketing is fostered by four features of the Internet:
o Synchronous
o Contact
o Social presence
o Anonymous

 The bulk of online advertising must still be characterized as impersonal and
undirected, and so still qualifies as public, mass communication

 Internet communication targets large audiences

 Most of the advertisements are still in written form, and are thus less synchronous
and have longer inter-turn times when compared to face-to-face communication

Question 2

Interactive marketing is fostered by four features of the Internet:

Answer 2

o Synchronous
o Contact
o Social presence
o Anonymous

Question 3

Features of online advertising

Answer 3

 Targeting: Identifying and reaching segments of consumers with specific and shared
characteristics such as shared preferences, values, or lifestyles, and matching the core
message of advertising to these characteristics.

 The web offers advertisers vast opportunities to efficiently target their offerings to
specific audiences of consumers with known preferences, beliefs, or behaviors that
match them

 Costs of targeting for online advertising are substantially lower than for offline
advertising

 Three forms of targeting:
o Demographic targeting
o Contextual targeting
o Behavioral targeting (uses data of individual consumers)

Three types of online advertising

 Search advertising: The typical banner ads that accompany search results in search
engines such as Google or Bing.

 Classified advertising: The online pendant of classic classified ads found in newspapers
and magazines. They appear on websites usually not featuring other media content
and can be posted by individuals and companies alike.
o E.g. jobsites, eBay, …

 Display advertising: The online depiction of offers on any type of site but search
engines.
o Usually, companies pay for this type of advertising by how much the site they
are on is viewed

 The interactive nature of the Internet implies that consumers disclose vast amounts of
sometimes personal data over the web, which can be profitably used by advertisers

 A study shows that matched ads improved consumer purchase intentions, as did
obtrusiveness

o The two variables interacted in a negative way
o A matched, obtrusive ad negatively affected these intentions
o Consumers may respond with reactance to a very obtrusive ad that is evidently
targeted at their attitudes and preferences, because they may suspect a
manipulative intent on the part of the advertisers

 Spam evokes reactance

Question 4

Targeting:

Answer 4

Identifying and reaching segments of consumers with specific and shared
characteristics such as shared preferences, values, or lifestyles, and matching the core
message of advertising to these characteristics.

Question 5

Three types of online advertising

Answer 5

 Search advertising: The typical banner ads that accompany search results in search
engines such as Google or Bing.

 Classified advertising: The online pendant of classic classified ads found in newspapers
and magazines. They appear on websites usually not featuring other media content
and can be posted by individuals and companies alike.
o E.g. jobsites, eBay, …

 Display advertising: The online depiction of offers on any type of site but search
engines.
o Usually, companies pay for this type of advertising by how much the site they
are on is viewed

Question 6

Search advertising:

Answer 6

The typical banner ads that accompany search results in search
engines such as Google or Bing.

Question 7

Classified advertising:

Answer 7

The online pendant of classic classified ads found in newspapers
and magazines. They appear on websites usually not featuring other media content
and can be posted by individuals and companies alike.
o E.g. jobsites, eBay, …

Question 8

Display advertising:

Answer 8

The online depiction of offers on any type of site but search
engines.
o Usually, companies pay for this type of advertising by how much the site they
are on is viewed

Question 9

A critical precursor to online persuasion: online trust

Answer 9

 If we are to understand persuasion and buying behavior (the dependent variable) in
an online context (the situational variable), we need to take relevant personal
variables (the moderator) into account

 (Online) trust: A willingness to make oneself vulnerable to another in the presence of
risk.

 Anonymity and its reduced social presence on the Internet, as well as asynchrony
work against the establishment of trust

Question 10

(Online) trust

Answer 10

A willingness to make oneself vulnerable to another in the presence of
risk.

Question 11

Building online trust

Answer 11

 Three related, but non-identical dimensions of trust:

o Ability beliefs pertain to consumers believing that the firm has the skills and
competencies to perform the job
o Benevolence refers to a belief in a general positive orientation toward the
consumer extending mere profit making
o Integrity beliefs refer to convictions that the firm adheres to moral,
professional, and legal standards in its interactions with consumers

 Rather than highlighting the safe transaction possibilities and the protection of one’s
personal data against use by non-authorized parties, online display advertising needs
to be crafted such that they look slick and professional in order to promote trust and
increase buying intentions

 Involvement, or “online engagement” is an important moderator
o People who pursue a specific goal deliberately search for information and
perceive a certain amount of risk can be expected to critically scrutinize the
available information to assess the true merits of the offer

Question 12

Online trust and regulatory focus

Answer 12

 Online safety cues do affect consumer risk perceptions, attitudes, and even behavioral
intentions, but only for consumers with a so-called prevention focus

 Regulatory Focus Theory: People can have the chronic or acute goal to focus on
achieving gains and acquire positive outcomes (promotion focus). In contrast, people
with a prevention focus are not so much motivated by achieving gains, but more by
preventing losses and negative outcomes.

 Benevolence and integrity related safety cues positively affected consumer risk
perceptions and increased persuasion, but only in participants in a prevention focus

 For consumers with a promotion focus, advertisers should stress their competence via
professionally designed advertising

 For consumers with a prevention focus, advertisers should cater to this focus by
including salient safety cues in the sales message

 When the advertising message does not specifically differentiate between promotion
and prevention focused consumers, advertisers are well advised to “play it safe” and
emphasize both

Question 13

Three related, but non-identical dimensions of trust:

Answer 13

o Ability beliefs pertain to consumers believing that the firm has the skills and
competencies to perform the job
o Benevolence refers to a belief in a general positive orientation toward the
consumer extending mere profit making
o Integrity beliefs refer to convictions that the firm adheres to moral,
professional, and legal standards in its interactions with consumers

Question 14

Regulatory Focus Theory

Answer 14

People can have the chronic or acute goal to focus on
achieving gains and acquire positive outcomes (promotion focus). In contrast, people
with a prevention focus are not so much motivated by achieving gains, but more by
preventing losses and negative outcomes.

Question 15

How banner ad placement and content affects online persuasion

Answer 15

 A study found that banner ads are not simply ignored btu that particularly right-placed
vertical banner ads attract attention and they explained their effects by the fact that
their participants were Western readers, who have a bias to the right of fixation
o In addition, they found that the attentional value of these right-placed vertical
banner ads further increased when they contained animated figures,
presumably because they contrasted with the text field in the middle of the
visional field

 An animated, pictorial ad was more effective than a static one
o It would be even more effective when placed in the left visual field (which
feeds into the right hemisphere) and so to the left, not the right of the text
block - The reverse is true for textual ads

 A study showed that memorability for the ad and product as enhanced when an
averted gaze, rather than a gaze at the person viewing the ad
o Attention will not benefit the product unless it is channeled toward it

Question 16

How does online advertising promote persuasion? The role of conscious versus
unconscious processes

Answer 16

 It is likely that online persuasion features both conscious, systematic, central, as well
as more unconscious, heuristic, peripheral processes
o Conscious – when consumers are highly involved or have a salient promotion
of prevention focus

 A large proportion of consumer online activity involves not product search, but is of a
social nature
o Social media allows consumers the ability to mindfully write messages

 Unconscious consumer processes probably account for a substantial portion of online
persuasiveness
o The state of permanently being connected may create a state of chronic
cognitive load, which promotes heuristic rather than systematic information
processing

 Threaded Cognition Theory: Tasks may require distinct consumer resources such as
vision, motor actions, or working memory. Each of these resources can operate in
parallel, but they are themselves serial in their operation. When people engage in
multitasking, there is no problem, and hence no load, as long as the simultaneous tasks
involve different resources.
o To the extent that online multitasking frequently requires concurrent use of
the same resources, interference is probably very prevalent and might even be
the rule, rather than the exception when being online

 Men outperformed women in multitasking in tasks involving spatial abilities
o Women may outperform men in tasks involving abilities where they
consistently score higher

Online heuristics

 Computer=true heuristic
o The computer-based format yielded higher ratings for both novices and
experts, and the effect was stronger for novices
o Advertisers might make reference to specific websites to suggest that the
product information is endorsed by a highly regarded source

 Dominance of heuristic as opposed to systematic types of online processing

 Liking & social proof
o Evidence for likability is mixed

 Internet communication is mainly written form; deliberate construction of messages

 With online, written communication, the message receiver might determine the pace
of processing themselves, stopping or slowing down where necessary and speeding up
where possible
o More conscious and deliberate information processing

 The key finding that social proof works well online has direct implications for online
advertising
o Listing reviews of satisfied customers, thus conveying a sense of social
consensus on the merits of the product
o Highlighting communalities in values, preferences, or personality traits

 In the online sphere, (dis)similarity cues appear to affect female consumers more than
they do male consumers
o Similarity induced liking for targeting females in advertising

Question 17

Threaded Cognition Theory:

Answer 17

Tasks may require distinct consumer resources such as
vision, motor actions, or working memory. Each of these resources can operate in
parallel, but they are themselves serial in their operation. When people engage in
multitasking, there is no problem, and hence no load, as long as the simultaneous tasks
involve different resources.

o To the extent that online multitasking frequently requires concurrent use of
the same resources, interference is probably very prevalent and might even be
the rule, rather than the exception when being online

Question 18

Supplementing regular online advertising: persuasion via decision support systems

Answer 18

 Decision support systems: They use information available in a computer-mediated
environment to structure, arrange, and/or recommend choice alternatives.
o Arranging a set of product alternatives in terms of predefined attributes
-Information function
- Comparison matrices
o Actively suggesting the alternative that fits best the consumer’s need
- Persuasion function
- Recommendation agents

 Because both types of decision support systems use data on previous (online)
behavior of consumers, they align with other forms of online advertising and so
potentially constitute powerful vehicles for advertisers to target their offering to
potentially interested consumers

 Both types of choice architecture improved decision-making quality
o The tendency to switch brands was only demonstrated for recommendation
agents but not for comparison agents
o Only recommendation agents affected purchase likelihood of “nondominated”
alternatives
o Only the recommendation agent tended to positively affect confidence in the
purchase decision

 Recommendations make consumers choose between previously inspected
alternatives, rather than inspecting an additional, new alternatives

 Under certain conditions, recommendations can be seen as “pushy” and may result in
feelings of reactance
o Most likely when consumers already have a prior attitude toward a particular
choice option in a set of alternative and the recommendation runs counter to
this specific attitude
o Reactance should be more pronounced when the source of recommendation
is seen as credible and/or expert because such a recommendation cannot be
easily discarded and will receive more weight in decision-making
o If a counterattitudinal recommendation indeed triggers reactance, which in
turn spurs an active and hostile drive to reinstate a sense of choice freedom,
then the recommendation may backfire and consumers in this state may
actively resist the recommendation and choose the option for which they
already had a (positive) prior attitude

 Other research has shown that consumers frequently look for additional
recommendations for well-known and familiar products when a recommendation
agent suggests an unexpected or unfamiliar alternative as a way to validate the merits
of the recommendation

Online stereotyping

 Because searches and offerings now become more personalized based as they are on
one’s own previous behavior, recommendations and comparison engines will
increasingly turn out a constrained set of items
1. The breath of any search or recommended result will decrease
2. As a consequence of (1), consumers will increasingly be exposed mainly or
even only to those results that match our previous values, wishes, and
preferences

 The end result might be increased stereotyping in judgement and choice with people
becoming ever more intolerant of opinions and preferences that do not match their
own

 Alternative spreading: The tendency to spread alternatives after actually choosing by
valuing the chosen option even more, and the unchosen one less than before the
choice was made.

Question 19

Decision support systems:

Answer 19

They use information available in a computer-mediated
environment to structure, arrange, and/or recommend choice alternatives.

o Arranging a set of product alternatives in terms of predefined attributes
 Information function
 Comparison matrices

o Actively suggesting the alternative that fits best the consumer’s need
 Persuasion function
 Recommendation agents

Question 20

Alternative spreading

Answer 20

The tendency to spread alternatives after actually choosing by
valuing the chosen option even more, and the unchosen one less than before the
choice was made.

Question 21

Unintended and incidental effects of being online on consumer cognition (and
what they mean for online advertising)

Answer 21

How Google affects consumer memory

 Internet can be considered a transactive memory system: an external reservoir of
declarative knowledge that complements our own storage of declarative (and
procedural) knowledge in our own memory system

 We mainly look up things via search engines when we do not know the answer, i.e.
when faced with difficult questions, and so especially under these conditions, search
engine names become relevant, come to mind more easily, and hence become more
mentally accessible

 We almost naturally regard not our own mind, but the “hive mind” of the Internet as
the prime reservoir for generating knowledge

 When people have a sense that there is no need to remember something (as when
one can look up information), they don’t – even when asked to do so

 When people know information is saved, they not only show worse memory
performance for the information itself, but improved memory performance for the
location where the information is stored

 Shift in advertising strategy from an emphasis on content to placement and location

We and our devices

 There is already neural evidence that suggests that we perceive our own mobile
phones as part of ourselves
o Overlap in the neural representation of one’s hand and one’s phone
o Right hemisphere corticospinal excitability only increased for one’s own
cellphone, not someone else’s!

 To the extent that we do pick up information from the web, we tend to own it
similarly to owning any object; this information appears to become an inseparable
part of ourselves

 Retrieval of information online is so fast that people mistake recognition of some
piece of information for recall of that information and perceive this as a confirmation
for something they thought they knew but actually did not
Implications for advertising: an online “truth effect”?

 Truth effect: People’s tendency to uncritically (at least at first exposure) believe
information before disbelieving it.
 A similar tendency might be especially prevalent on the internet
o Computer= true heuristic
o Chronic state of cognitive load; the truth effect is driven by cognitive
distraction
o Because people mainly access the transactive memory because the
information is not (yet) accessible, there is no a priori basis for assessing its
merits

Question 22

How Google affects consumer memory

Answer 22

 Internet can be considered a transactive memory system: an external reservoir of
declarative knowledge that complements our own storage of declarative (and
procedural) knowledge in our own memory system

 We mainly look up things via search engines when we do not know the answer, i.e.
when faced with difficult questions, and so especially under these conditions, search
engine names become relevant, come to mind more easily, and hence become more
mentally accessible

 We almost naturally regard not our own mind, but the “hive mind” of the Internet as
the prime reservoir for generating knowledge

 When people have a sense that there is no need to remember something (as when
one can look up information), they don’t – even when asked to do so

 When people know information is saved, they not only show worse memory
performance for the information itself, but improved memory performance for the
location where the information is stored

 Shift in advertising strategy from an emphasis on content to placement and location

Question 23

transactive memory system

Answer 23

an external reservoir of
declarative knowledge that complements our own storage of declarative (and
procedural) knowledge in our own memory system

Question 24

We and our devices

Answer 24

 There is already neural evidence that suggests that we perceive our own mobile
phones as part of ourselves
o Overlap in the neural representation of one’s hand and one’s phone
o Right hemisphere corticospinal excitability only increased for one’s own
cellphone, not someone else’s!

 To the extent that we do pick up information from the web, we tend to own it
similarly to owning any object; this information appears to become an inseparable
part of ourselves

 Retrieval of information online is so fast that people mistake recognition of some
piece of information for recall of that information and perceive this as a confirmation
for something they thought they knew but actually did not

Question 25

Implications for advertising: an online “truth effect”?

Answer 25

 Truth effect: People’s tendency to uncritically (at least at first exposure) believe
information before disbelieving it.

 A similar tendency might be especially prevalent on the internet
o Computer= true heuristic
o Chronic state of cognitive load; the truth effect is driven by cognitive
distraction
o Because people mainly access the transactive memory because the
information is not (yet) accessible, there is no a priori basis for assessing its
merits

Question 26

Online stereotyping

Answer 26

 Because searches and offerings now become more personalized based as they are on
one’s own previous behavior, recommendations and comparison engines will
increasingly turn out a constrained set of items
1. The breath of any search or recommended result will decrease
2. As a consequence of (1), consumers will increasingly be exposed mainly or
even only to those results that match our previous values, wishes, and
preferences

 The end result might be increased stereotyping in judgement and choice with people
becoming ever more intolerant of opinions and preferences that do not match their
own

 Alternative spreading: The tendency to spread alternatives after actually choosing by
valuing the chosen option even more, and the unchosen one less than before the
choice was made.

Question 27

a transactive memory system

Answer 27

an external reservoir of
declarative knowledge that complements our own storage of declarative (and
procedural) knowledge in our own memory system

Question 28

Truth effect:

Answer 28

People’s tendency to uncritically (at least at first exposure) believe
information before disbelieving it.

Question 29

Beyond online advertising: persuasion via online interpersonal communication

Answer 29

 Consumers chatting online with each other about products is possibly the most
prevalent and prolific source of online product information
o Facebook

 When joining Facebook, the user has to concede that the company can extract
demographic and preference data from its user-based, which it sells to advertisers

 Research shows that user profiles on Facebook are actually a pretty accurate
reflection of the participant’s offline self

 People are more motivated to become friends with attractive as opposed to
unattractive people on OSNs

Company effects of online chatter

 Results show that it is the volume of chatter that matters the most and has a positive
influence on stock performance

 The negative impact of negative reviews comes quickly and goes slowly
o Negativity bias

 An increase in regular, offline advertising proved to be an effective means of
dampening the volume of negative chatter online

How emotion affects online diffusion and diffusion affects online emotion

 Going viral: The spreading of content over the web at an accelerated pace and on a
huge, sometimes global, scale.

 A key feature modulating the role of emotions on online virality was physiological
arousal, meaning that in case of high arousal both items that evoke positively arousing
emotions or negatively arousing emotions produced higher rates of virality, while the
opposite was also found: less arousing emotions produced a decrease in virality

 Virality hinges on active behavior of the message recipients

 If marketers succeed in mobilizing highly arousing, activating emotions, they might be
able to create an online campaign that might go viral

 Diffusion can shape online emotions
o Emotional contagion can occur online

Question 30

Company effects of online chatter

Answer 30

 Results show that it is the volume of chatter that matters the most and has a positive
influence on stock performance

 The negative impact of negative reviews comes quickly and goes slowly
o Negativity bias

 An increase in regular, offline advertising proved to be an effective means of
dampening the volume of negative chatter online

Question 31

How emotion affects online diffusion and diffusion affects online emotion

Answer 31

 Going viral: The spreading of content over the web at an accelerated pace and on a
huge, sometimes global, scale.

 A key feature modulating the role of emotions on online virality was physiological
arousal, meaning that in case of high arousal both items that evoke positively arousing
emotions or negatively arousing emotions produced higher rates of virality, while the
opposite was also found: less arousing emotions produced a decrease in virality

 Virality hinges on active behavior of the message recipients

 If marketers succeed in mobilizing highly arousing, activating emotions, they might be
able to create an online campaign that might go viral

 Diffusion can shape online emotions
o Emotional contagion can occur online

Question 32

Going viral

Answer 32

The spreading of content over the web at an accelerated pace and on a
huge, sometimes global, scale.