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Evaluating The Effect of Youtube Advertising Towards Young Customers' Purchase Intention
Evaluating The Effect of Youtube Advertising Towards Young Customers' Purchase Intention
Abstract—The use of YouTube advertising by companies to platform as the most active social media in Indonesia and has
communicate with their customers is increasing nowadays, along a percentage of 49% of the 12 social media platforms included
with the increasing number of YouTube audiences. But only in the research. Therefore, companies could not ignore this
a few scholars have examined the effectiveness of YouTube
advertising on customers’ purchase intention. This study aims (1) fact, by including their communication strategy in YouTube
to analyze the factors of YouTube advertising (e.g. entertainment, to engage with their customers.
informativeness, customization, and irritation) and their impact
on perceived YouTube advertising value; and (2) to evaluate Ducoffe (1995) in [8] had built an approach to study the
the effect of YouTube advertising towards customers’ purchase effectiveness of attitudes toward advertising, which focused
intention. This was a conclusive quantitative research with 261 on advertising value. They stated three antecedents of adver-
respondents aged 18–29 years. This study found that the more tising value on internet advertising, including entertainment,
entertaining and the more informative the YouTube advertising,
the higher the YouTube advertising value. However, the cus- informativeness, and irritation. Entertainment is a positive
tomization and irritation factors that were assumed to influence predictor of advertising, due to audiences seeing advertising
the YouTube advertising value, were not proven. Finally, the as a fun and enjoyable thing [9]. Informativeness is the
YouTube advertising value significantly positively influenced the advertisings’ ability to provide product-related information to
customers’ purchase intention and was partially mediated by audiences. While irritation is a negative predictor that reflects
brand awareness.
Index Terms—YouTube advertising, advertising value, pur- the techniques used by advertisers that could irritate, offend,
chase intention criticize, or manipulate the audience. Moreover, customization
was also found to be an antecedent for advertising value of
I. I NTRODUCTION internet advertising, in which an audience could customize
Advertisement always moves along with technological the information that suits his/her own interests and needs [10]
changes, from television commercials, online banners, to ad- in [11]. These four antecedents could be used to predict the
vertisements in social media [1] (Stephen & Galak (2012) advertising value on YouTube, which is one of the advertising
in [2]). According to Aslan and Karjaluoto, the advertising in the form of social media [7].
paradigm is now shifting from traditional advertising media The customer would have the intention to buy a product
(TV, outdoor, direct marketing, etc.) to digital-centric ap- or brand based on their experiences, preferences, external
proaches and advertisers are increasingly investing digitally environment, including advertisement [12]. Khan argued that
at the expense of the traditional format [3]. Zenith Optimedia customers’ purchase intention depends on their awareness of
predicts the value of advertising in online video is expected to a particular brand [13]. Moreover, Mkik, et al. found brand
touch US$ 35.4 Billion worldwide by 2019 [4]. According to awareness to be a mediating variable for the relationship
Nielsen Indonesia in 2017, advertising spending in the digital between the attitude toward advertising and behavior intention
sector in Indonesia was more than US$ 900 M, with the social [14], and Deghani, et al. concluded that advertising value
media portion of up to US$ 600 M [5]. The rapid penetration would affect purchase intention through brand awareness [7].
of smartphones, social media and online video in Indonesia
caused the tremendous growth of digital ad spending. This study took one YouTube advertising that was pop-
YouTube is one of the social media platforms which allows ular among young consumers, it was the “dijamin Ori” or
users to upload, watch and share videos [6]. According to “guaranteed original” advertising from JD.ID. JD.ID is one of
Socialbakers (2013) in [7], that YouTube attracts one billion the e-commerce platforms based in Indonesia. Based on that,
visitors and more than six billion views per month. YouTube the purpose of this study were (1) to analyze the antecedents
was ranked the third most visited website in Indonesia, ac- (entertainment, informativeness, irritation, and customization)
cording to the Internet traffic ranking website Alexa.com in of “dijamin ori” YouTube advertising value; and (2) to find
December 2017. According to We Are Social and Hootsuite out whether the advertising value would have an effect on
2017, YouTube ranked first in the category of social media customers’ purchase intention mediated by brand awareness.
II. L ITERATURE R EVIEW Online advertising such as banner ads and pop-up ads were
also considered as annoying advertisement [17]. People tend
An advertisement is defined as paid non-personal commu- to avoid online advertising because of those annoying aspects
nication form that informs the organization, product, service, of advertising (Benway (1998); Cho, et al. (2004) in [26]).
or idea of the sponsor [15]. Advertisements are the most In social media like YouTube, irritation is related to ads that
important promotion tool especially for a company that tar- indicate a disruption of purpose and customer concerns about
geted mass consumers [16]. Technological changes have also losing their privacy [26].
made changes in advertisements. The media for advertisements
moved from traditional (TV, outdoor, direct marketing, etc) to III. M ODEL
digital media, one of which is the online video on YouTube. Empirically, Dehghani, et al. found that entertainment,
Advertising value is defined as “subjective evaluation of informativeness, and customization had a positive effect on
the relative value or utility of advertising to the customer”, advertising value, meanwhile, irritation had a negative effect
and used as a useful tool for measuring the effectiveness of on advertising value [7]. Advertising value is defined as “sub-
advertising [17] and [18] in [7]. Consumers find value in jective evaluation of the relative value or utility of advertising
advertising when the advertised message is relevant to their to the customer”, therefore, it was used as a useful tool for
needs [7]. As stated before, there are four antecedents of measuring the effectiveness of advertising [17] and [18] in [7].
advertising value that would be examined in this study, namely Previous research have confirmed the growing effect of
entertainment, informativeness, irritation, and customization. entertainment toward positive advertising attitude, while ad-
The term “entertainment” refers to the customer’s response vertising channels have changed from non-mobile advertising
to the pleasant and enjoyment found in the advertisement; to mobile advertising (Newman, et al. (2004); Rau, et al.
enjoyment and escapism are positive and negative responses, (2006) in [19]). Unlike non-mobile advertisements, mobile
resulting to customers to feeling satisfaction or disappointment ads can take advantage of the various features provided by
(Ducoffe (1996) in [19]). Entertainment could be described apps and smartphones, and thus can entertain customers more
as the ability to meet the needs of an audience for escape, thoroughly (Charlesworth (2009); Oulasvirta, et al. (2012);
distraction, aesthetic pleasure, or emotional pleasure while Yang, et al. (2013); [27] in [19]). Advertisers try to improve
watching advertisements (Ducoffee (1996) in [20]). the effectiveness of messages; they believe it can make the
Informativeness can be defined as the advertising ability to audience have a positive attitude towards advertising and
inform the customer about an alternate product or service, and a positive attitude toward the brand (Bauer, 2005). Many
therefore, it could satisfy the customers (Ducoffe (1996) in marketers combined advertising and entertainment to reach
[20]). Information is perceived by the customer as a positive more customers to break the clutter and create new ways to
aspect of advertising in situations where they learn about new get more attention from customers [28].
products, such as product benefits, and comparative product Thus H1: When customers perceive the “dijamin ori”
information (Shavitt, Lowrey, & Haefner (1998) in [21]). YouTube advertising to be entertaining, its advertising value
Furthermore, Lee and Choi stated that social media provides would be more positively perceived by customers.
the right tools in the exchange and provision of information Several studies have revealed the importance of informative-
because of the format that displays more product information ness when evaluating advertising. Brown & Stayman (1992) in
[22]. [29] found that informative was the most important factor in
Customization is how ads can customize the informa- predicting attitudes toward brands. Shavitt, et al. (1998) in [29]
tion that suits the interest and needs of the audience [11]. also found that customers perceived information as a positive
Customization involves adjusting user-generated information, aspect of advertising when they learned about new products,
where users can actively determine the content they want product benefits, and product information comparatively.
to receive [10]. Customization allows users to inform their Thus H2: When customers perceive the “dijamin ori”
systems of interest through “personal settings” [23] and to YouTube advertising to be informative, its advertising value
see themselves as those who dictate the delivery process and would be more positively perceived by customers.
the delivery of the information itself [24]. Customization is Customers would be able to rely more on advertising when
possible to do so because of the interactivity provided by the the advertising was considered personal and relevant to their
Web. Companies can collect and update information according lifestyles (De Zoysa (2002) in [7]). Therefore, advertisers
to customer preferences from surveys directly in place and should follow their customer needs, profiles and consumption
from traces left by customers as they navigate through the patterns [18]. Deghani, et al. believed that advertising works
Website [25]. effectively when its value was exchanged between customers
Irritation could be described as messy and annoying content and the advertiser through the advertising message [7]. In other
for Internet surfers (Eighmey & McCord (1998) in [7]). words, customers might notice differentiated ads to be more
Previous research have shown that people are increasingly personal and avoid ads that are considered less customized
resistant to TV commercials and therefore they ignore adver- [30].
tisements or use that advertising time to participate in other Thus H3: When customers perceive the “dijamin ori”
activities (Clancey (1994); Speck & Elliott (1997) in [7]). YouTube advertising to be customized or appropriate with
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Advances in Economics, Business and Management Research, volume 72
them, its advertising value would be more positively perceived purchase in JD.ID.
by customers.
IV. M ETHOD
The variables of entertainment and informativeness are
positive predictors of the advertising value model (Ducoffe Data was collected from respondents from all over Indone-
(1995, 1996) in [29]), while irritation served as a negative sia, aged between 18–29 years old, and who had seen any
indicator. Irritation can reduce the effectiveness of advertising kind of “dijamin ori” JD.ID advertisement series in the last
and the audiences’ perceived value (Aaker & Bruzzone (1985) three months since they received the questionnaires. The total
in [31]). Irritation have the potential to divert attention from number of respondents obtained was 240, consisting of 142
real social objectives (Galbraith & Crook (1958) in [32]), female respondents (59%) and 98 males (41%), whereas there
undermining human experience (Boorstin, et al. (1974) in [32]) were 147 people (61%) in the age range of 18 to 21 years
and exploiting human anxiety to have excellent expectations old, 64 respondents (27%) who were 22 to 25 years old,
(Schudson (2013) in [32]). Gao & Koufaris (2006) in [32] and 29 respondents (12%) who were 26 to 29 years old. 80
suggest that unexpected results from visiting websites may respondents (34%) spent 2 to 4 hours using social media daily,
result in a user’s feeling of irritation. 57 respondents (24%) spent 4 to 5 hours a day, 56 respondents
(23%) spent more than 5 hours daily, and the rest (19%) spent
Thus H4: When customers perceive the “dijamin ori”
less than 1 hour a day. 193 respondents (82%) had been using
YouTube advertising to be irritating, its advertising value
social media for more than 4 years, 38 respondents (17%) for
would be more negatively perceived by customers.
2 to 4 years, and only 1% respondents who had been using
Brand awareness was described as the awareness of a brand
social media for less than 6 months.
or memory of a brand [33]. Meanwhile, according to Bush, et
There were a total of 22 indicators from 7 variables that
al. purchase intention includes positive and negative behaviors
were used in this study. All indicators were measured on a
that could be shown by the customer toward the brand or
6–point (1 = strongly disagree; 6 = strongly agree) Likert
company [34]. This represents the level or likelihood the
scale. The measurements were derived from a previous study
customer will be willing to buy. Customers acquire brand
by Deghani, et al. [7]. All variables were reliable (Cronbach
awareness through effective marketing communication chan-
alpha of more than 0.6) and all indicators valid showed factor
nels such as television, mobile phones, and online advertising
loading more than 0.5, so it could be used for further analysis.
as they provide information on product quality assurance and
The multiple regression analysis was used to test the H1 to
credibility that help reduce risk in product evaluation and
H5, also Baron and Kenny analysis (Kenny (2013)) was used
selection when customers purchase products [35]. According
to examine the mediation effect in H6.
to Khan customer intention to buy something depends on
how much awareness of a brand or a particular brand the V. R ESULT AND D ISCUSSION
customer has [13]. Dehghani, et al. also found that there was Before we did the multiple regression analysis, we con-
a relationship between advertising value and brand awareness, ducted the classical assumption test that consisted of residual
and between brand awareness and purchase intention [7]. normality test, multicollinearity test, and heteroscedasticity
Thus, H5: The more positive the “dijamin ori” YouTube test. The significance value of Kolmogorov-Smirnov was
advertising value, the customer intention to purchase in JD.ID 0.200 for residual normality test, which could be said that
would be higher. the residual value of the variables was normally distributed.
H6: Customers’ brand awareness of JD.ID would mediate The multicollinearity test results indicate that there were no
the relationship between the customers’ advertising value of symptoms of multicollinearity, which could be seen from the
“dijamin ori” YouTube advertising and customer intention to tolerance value of each independent variable which was greater
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Advances in Economics, Business and Management Research, volume 72
TABLE I
R EGRESSION ANALYSIS RESULTS
Dependent Variable Independent Variable(s) Unstandardized Coefficient Standardized Coefficient t-value Significance Conclusion
Entertainment 0.715 0.172 2.728 0.007 Sig
Informativeness 0.537 0.534 8.691 0.000 Sig
Advertising Value
Customization 0.090 0.083 1.514 0.131 Not Sig
Irritation -0.021 -0.023 -0.482 0.630 Not Sig
Brand Awareness Advertising Value 0.588 0.525 9.520 0.000 Sig
Brand Awareness 0.599 0.625 12.352 0.000 Sig
Purchase Intention
Advertising Value 0.537 0.515 11.105 0.000 Sig
than 0.2 and VIF values were less than 10. Heteroscedasticity product and service. It made the respondent have a positive
test results showed that all independent variables did not have attitude on the value of those YouTube advertising. H5 was
symptoms of heteroscedasticity because it had a significance also accepted, that advertising value significantly positively
value of Glejser test greater than 0.05. From all classical influenced (11.105; 0.000) purchase intention. That means the
assumption test results, we concluded that the data could be more positive the advertising value of “dijamin ori” YouTube
analyzed further using regression analysis. The result of the ads series, the customers’ purchase intention to buy products
regression analysis could be seen in Table I. from JD.ID would also be higher.
As we could see in table I, the value of entertainment On the contrary, the value for customization variable to
variable to advertising value was 2.728, sig 0.007 (sig le 0,05). advertising value was 1.514, sig 0.131 (sig ≤ 0,05), showing
This indicates that H1 was accepted. It indicates there was that H3 was rejected. It means that respondents perceived the
a significant influence with a positive direction from enter- customization on “dijamin ori” YouTube advertising series
tainment to advertising value and indicates that respondents from JD.ID was not good and not in accordance with their
perceived the “dijamin ori” YouTube advertising by JD.ID need and want, so the customization on those ads did not
was entertaining, made them feel enjoyment and pleasure, significantly influence the value of those ads. Moreover, the
therefore their attitude toward its advertising value became value for irritation variable also was -0.482, sig 0.630 (sig ≤
more positive. The value of informativeness to advertising 0,05), which also show that H4 was rejected. It means the
value was 8.691, sig 0.000 ((sig ≤ 0,05), H2 was accepted. respondents did not perceive that the “dijamin ori” YouTube
This means that the respondents perceived the “dijamin ori” ads series from JD.ID irritated or annoyed them, so it would
YouTube advertising series from JD.ID was informative and not affect their attitude toward those ads values.
had the ability to inform consumers about the benefit of the To examine the mediation effect, we conducted the Baron
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Advances in Economics, Business and Management Research, volume 72
and Kenny analysis [36]. The value of the path could be seen research in digital advertising. Based on these results, both
in Figure 2. In that picture it can be seen that the direct rela- conventional and digital advertising value were influenced by
tionship value between advertising value to purchase intention the customers’ perception toward the ads itself, whether it was
(c) was 0.537; sig 0.000 (c) and the indirect relationship value entertaining and informative. On the other hand, customization
mediated by brand awareness (c’) was 0.255; sig 0.000. Be- and irritation still need further study, especially in the context
cause either direct and indirect both were significant, and the of digital advertising.
coefficient value of c’ < c, therefore it is considered as partial In addition, this study only examined the four predictors of
mediation. Partial mediation is defined as the influence of digital advertising (entertainment, informativeness, customiza-
the independent variable (advertising value) on the dependent tion, and irritation) toward advertising value. Further research
variable (purchase intention) that would decrease after passing should add other predictors such as credibility (the perception
the mediator variable (brand awareness), but there was still of honesty and ads trust) and incentives (the perception how
significant direct influence [36]. In other words, the customers’ advertising provides benefits in non-monetary form and in
attitude toward advertising value of “dijamin ori” YouTube ads monetary forms, such as discounts, coupons, gift) [27]. An-
series, would affect their purchase intention positively both other limitation of this study is that it only uses one case which
directly or indirect by brand awareness as a mediator. Thus, may not represent the phenomenon that exists in advertising
H6 was accepted. via YouTube. Thus it would be better to use several cases
in one study, so that it would better represent the actual
VI. C ONCLUSION conditions.
In this study, the results showed that entertainment and
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