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Modeling Online Advertising

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Submitted By raghugagu
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Empirical Analysis of Weak form of Efficiency in Asian Markets

PROF. RAGHAVENDRA.K.A
Asst. Professor
Department of Management Studies
SJB Institute of Technology
Kengeri, Bengaluru – 560 060

Introduction
Recent years have witnessed growing interest in examining the mechanism and influence of online advertising. Along the line of research, an intensely debated topic has been consumers’ beliefs and attitudes toward online advertising. A host of studies (e.g. Ducoffe 1996; Russell, Staffaroni, and Fox 1994) have suggested that individuals’ attitudes toward online advertising (ATOA) are an important measure of advertising effectiveness. Past research of online advertising has provided insight into global marketing and commerce.

However, the foci of most studies have been on the USA or other developed countries. Little is known about online advertising in developing countries such as China. Culture and advertising are intrinsically linked. Cultural influence on consumers’ beliefs and attitudes toward advertising has been well documented in the marketing literature (e.g. Durvasula and Lysonski 2001; La Ferle, Edwards, and Lee 2008). As Roberts and Ko (2001) stressed, cultural differences are as relevant to online advertising as to traditional advertising. The goal of the current study is to investigate online advertising across different cultures such as China and Romania, which extends the current research on ATOA to distinctly different cultural contexts and may provide useful implications for businesses and organizations to expand across cultures. Moreover, due to the short history of online advertising, consumers’ beliefs and attitudes toward online advertising are still evolving and changing (Karson, McCloy, and Bonner 2006). Compared with the rather mature online industry in the western developed markets such as the USA, online advertising in China and Romania is still in its infancy period. The differences in developmental stages between developing markets such as China and Romania and the developed countries warrant the current study. The findings may offer a new perspective on the evolving nature of online advertising.

There are two major objectives of this study: first, the study attempts to model the relationship among three groups of factors including beliefs about online advertising, ATOA, and online advertising outcomes; second, the study seeks to explore the influence of culture on the aforementioned three factors. China and Romania are the two nations chosen for cross-cultural comparison because both are developing countries and undergoing drastic transitions with advancement of new technologies. Specifically, China entered the World Trade Organization (WTO) in 2004 whereas Romania recently joined the European Union. Both countries are facing challenges for e-commerce to take off. In addition, China represents a typical Eastern culture that is still poorly understood by the West, whereas Romanian culture has much in common with its central and Western European neighbors. Due to the rapid diffusion of the Internet and economic development in both countries, it is sensible to examine online advertising in these two as opposed to developed countries. Meanwhile, the different cultural origins and orientations of China and Romania render a meaningful comparison to examine the impact of culture on online advertising.

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