Article overview: The article being reviewed in this reading brief paper,“ The Effect Of Banner Advertising on Internet Purchasing ” investigated the relationship between banner advertising and purchasing patterns on the internet. The authors used a behavioral database that consists of customer purchases at a Web site and individual advertising exposure. The authors measure the impression of banner advertising on current customers’ probability of repurchase while accounting for duration dependence. (1)
The authors formulate a model of individual purchase timing behavior as a function of advertising exposure. A survival model was used to model the probability of a current customer making a purchase in any given week (since the last purchase). The duration dependence in the customers’ purchase behavior is captured through a flexible, piecewise exponential hazard function. The advertising covariates enter through a proportional hazards specification. These covariates, consist of strictly advertising variables, such as weight and quality, as well as advertising/individual browsing variables, represented by how many and which pages expose customers to advertising. The model is cast in a hierarchical Bayesian framework, thus enabling the authors to control for unobserved individual differences in the advertising response parameters and to investigate the impact of targeted advertising strategies. The authors concluded that banner advertising have a positive effect on Internet purchasing.
Key Learning points: the author has addressed this topic very well in this paper. The reader could easily pick up the basic ideas the author intended to highlight in his research.
The electronic business environment contributed in arising new forms of advertising tools, such as banner advertising, pop-ups, and search based links. Banner ads composed of graphics and text. It is usually