ECONTECHMOD. AN INTERNATIONAL QUARTERLY JOURNAL – 2017, Vol. 06, No.

1, 37–46

Internet advertising: the specifics, tendencies of development

and impact on sales

N. Horbal1, M. Naychuk-Khrushch1, B. Orlykova1

1
Depertment of Foreign Economic and Customs Activity,
2
Department of Management and International Business,
Lviv Polytechnic National University; 79013, Lviv, Bandery st. 12
E-mail: [email protected], [email protected]

Received: April 12.2017; Accepted: April 27.2017

Summary. The article is aimed at the disclosure and changing ways in which products and services are pro-
analysis of the role and place of the Internet tools in ad- duced and marketed. That is why the information industry
vertising and promoting of goods and services by market- plays a great role in the global and international market-
ers and their impact on sales. So, the article determines ing development and predetermines its prospective
the essence of advertising on Internet, theoretical, meth- growth. Progress in communications technologies has
odological and practical issues of development and func- affected the creation of innovative marketing techniques,
tioning of Internet advertising and, in particular, the use and Internet-marketing is one of the most dynamic ones.
of Internet advertising as the means of promoting prod- The number of Internet users has been increasing eve-
ucts and services. The development of online advertising ry year. That emerges new forms of social and economi-
is analyzed in global and national scope and trends are cal activities such as virtual enterprises, distant learning
highlighted. Also, the forecast of total worldwide retail etc. Due to this, the internet users have become the crucial
Internet sales till 2020 (which is expected to increase segment of consumers that can influence a steady busi-
twice) is represented. The model of main features, which ness development.
characterize Internet trade and marketing, is designed by Internet (online) advertising is likely to be the one of
the authors and represented. The main and most innova- the most important marketing methods regarding the
tive Internet advertising instruments are described and Internet users. The Internet is becoming one of the main
characterized. The issues related to the differences be- means of communication and intercourse between people
tween means, types, advantages and disadvantages of the in business and private life. The intensity of this phenom-
Internet marketing were described. Also the main ad- enon is constantly growing. What is more, the Internet
vantages (benefits) and challenges (difficulties) of Inter- tends to play a significant role as a new channel of inter-
net tools for advertising and promoting products are de- national marketing and advertising.
scribed, detailed and ranked by their importance for busi-
ness. Thus, it was found out that the main risks and diffi-
culties of the Internet tools for advertising and promoting THE ANALYSIS OF RECENT RESEARCHES
products are: cyber risks, high competition and the choosy AND PUBLICATIONS
behavior. of consumers. Those factors deserve close at-
tention from the marketers.. Issues of advertising and Internet marketing were ad-
Key words: advertising, internet advertising, online ad- dressed in the works of such scientists, as I. Boychuk and
vertising, digital advertising, promotion, publishers, ad- O. Musyka [1], T. Broadbent [2], R. Hovland and J. Wol-
vertisers, consumers, information technologies, click- burg [8], S. Illiashenko and T. Ivanova [10], V. Mozgova
through. [12], X. Nan and R. Faber [13], J. Richards and C. Curran
[18], O. Smolianiuk [19], J. Strauss and R. Frost [20] etc.
J. Richards and C. Curran defines advertising as
INTRODUCTION “a paid, mediated form of communication from an identi-
fiable source, designed to persuade the receiver to take
Nowadays modern telecommunication and infor- some action now or in the future” 18. R. Hovland and
mation technologies are more and more actively imple- J. Wolburg [8] provide an institutional view of advertis-
mented in all spheres of social life. This is significantly ing, which “explains the inextricable relationship between
38 N. HORBAL, M. NAYCHUK-KHRUSHCH, B. ORLYKOVA
advertising and consumer culture”, potential influence of In terms of the world globalization enterprises try to
advertising on consumers, ethical perspectives and legal maintain its competitiveness on the market that leads to
restrictions in the field. They believe the advertising can application of modern marketing tools, particularly –
be dualistic: “advertising is inherently controversial, de- Internet advertising. That is why the objective of deter-
veloped hand in hand with a consumer culture”. T. mining the features, purposes of the online advertising, its
Broadbent [2] investigates the popular idea that advertis- impact on sales and ways to promote businesses through
ing increases market size by creating desires. He states the Internet is becoming more and more relevant.
that very few of investigated advertisers have tried to The aim of the research is to analyze theoretical,
increase the size of their market or claim to have done so methodological and practical issues of development and
and no evidences were found of creating a desire. He functioning of Internet advertising in global and national
summarizes that banning or restricting advertising may be scope and to develop recommendations for marketers as
an ineffective instrument of social policy. X. Nan and R. to its effective usage.
Faber [13] propose that advertising theory needs to be-
come more focused on elements making advertising a
distinct phenomenon. They propose four such elements: THE MAIN RESULTS OF THE RESEARCH
skepticism, repetition, message coordination and clutter.
J. Strauss and R. Frost [20] offer traditional marketing The Internet has become the most powerful tool of
view with focus on the Internet and other technologies advertising nowadays, which makes it much more effi-
that have had a profound effect on marketing. O. Smoli- cient than traditional marketing tools. The offline adver-
aniuk [19] analyses the theoretical foundations of market- tising means such as newspapers, radio etc. still hold the
ing communications through the Internet, develops practi- lump sum of the global market but its growth is not so
cal aspects of enterprises’ marketing activity optimization rapid comparing to Internet advertising (Fig. 1).
based on modern interactive methods created by Internet
networks. V. Mozgova [12] defines Internet marketing as 250
“the process of using modern information Internet tech- 200
nologies for conducting market research, product devel- 150 digital Ad
opment, pricing, bringing to the consumer and imple- 100
50 traditional Ad
menting new approaches to sales promotion to maximize 0
customer satisfaction through innovation, organization of 2014 2015 2016 2017 2018
material and information exchanges”. She systematizes
Fig. 1. Growth in digital and traditional advertising
Internet marketing tools based their benefits. I. Boychuk
(2014-2018), bln. $ [5]
and O. Musyka [1] investigate the essence, purpose and
functions of Internet marketing. Methods of assessing the
The prospects of digital advertising worldwide spend-
efficiency of enterprise’s web server and promotional
ing are stunning, - $194,77 bln. in 2015, $194,6 bln. in
activities in the Internet are highlighted. S. Illiashenko
2016, $229,25 bln. – in 2017, $269,85 bln. in 2018,
and T. Ivanova [10] analyze and systematize methods and
$304,34 bln. in 2019, $335,48 bln. in 2020 [6].
instruments of Internet-marketing and the specifics of
Internet advertising can be defined as any form of
their application as well as provide recommendations on
communication between a consumer and a publisher, that
their use.
incorporates advertisements by emails, search engine
While the issues of advertising and Internet marketing
results pages, banners etc. The main goal of the Internet
are widely researched, the topic of Internet (online) adver-
advertising is increasing sales that can be achieved by
tising is worth wider exploration.
attracting more consumers with an access to the Internet.
Another reason of using such advertising is to raise brand
awareness by putting out information on exclusive fea-
OBJECTIVES
tures the brand possesses 2.
Advertising has always been a crucial factor of mar- As any kind of advertising the Internet ads have the
keting products, but during the development of society following goals:
forms and methods of advertising have been changing. 1) building brand awareness that plays a huge role in
Today before starting an advertising campaign, a market marketing. Putting out some exclusive information the
research should be conducted, which is necessary for brand possesses which can make customers to buy
correctly identifying potential customers and therefore products;
choosing the right promotional strategy.
 INTERNET ADVERTISING 39
2) increasing sales by presenting products on brand web- 3. Mobile advertising is a way of advertising products
sites. Nowadays it is an extremely easy way for pur- with the help of mobile devices. This method can be quite
chasing goods just by clicking on it; effective for the reason of closeness to the consumer
3) creating demand for products and then satisfying it. through the day that can reduce the ads` delivery time.
The Internet advertising is a technique that generates Fig. 2 describes the uprising usage of Internet on the
profits of producers promoting their products. Main types mobile devices.
of the online advertising and promotion are the following.
1. Pay Per Click Advertising (PPC). This type of ad- Desktop Smartphone Tablet
vertising gives information about the number of users Q4 2015 62 23 14
who ran through the publisher ads and means the necessi- Q3 2015 64 21 15
ty to pays only after clicking on it. Google AdWords is Q2 2015 67 18 15
maybe the most widely used system among marketers Q1 2015 68 16 15
which is based on this method 13. Q4 2014 69 15 16
There are some strengths and weaknesses of using 0 20 40 60 80 100
PPC for both advertiser and publisher (the website own- Fig. 2. Global search spend share by device (in quarters
er). The main advantage for the advertisers is that they of the year), % 5
have to pay for the ads with the clickthroughs. Apparent-
ly, the publisher does not need to pay attention to some 4. Display advertising is a form of the Internet adver-
specific work through the website, his profit rises as the tising which consists of the following techniques:
advertisements are clicked. The other advantages of PPC  banner ads – a graphic image on a website with a
are flexible managing of advertising budgets, high con- catchy and concise information. Banners may include
version and clear targeting for any region. some flash headers or videos in order to attract con-
Of course, the Pay Per Click Advertising has negative sumers;
aspects. For instance, due to some reasons the ads may
 text ads;
not be relevant to the customers’ preferences that definite-
 pop-ups and pop-unders are ads that appear on the top
ly lead to losing clicks. Hence, there is no much sense in
or under the current web-page that a user views;
carrying the ad on the publisher site. Since the cost of the
 text ads;
click can be expensive it may not be very effective for the
 videos, flash etc.
advertiser in the case the consumers will not purchase the
5. E-mail advertising is a form of online advertising
presented goods.
which involves receiving ads via electronic letters. Now-
2. Social media advertising is the next kind of online
adays companies are likely to send mail with information
advertising that is commonly used. This can be widely
on particular upcoming sales, new collections or events
seen at such famous social networks as Twitter, Face-
21. The objectives of e-mail advertising are similar to
book, Instagram, Pininterest etc.
other already mentioned types of advertising, among
This type of advertising incorporates some special tar-
which are: 1) encouraging customer loyalty and respect-
geting options to make the advertising more effective
fulness; 2) inducing clients to purchase goods by sending
such as:
info on alluring sales etc.
1) geotargeting that determines the location of the web
6. Landing page is a distinct page on owner’s website
sites users and delivers the advertisements in accord-
that is built for one particular conversion objective [25, 26].
ance with certain places, cities, regions, organizations,
The most common landing page is a Google Adwords
or even cinemas, with the help of which the ads are
landing page. This is a landing page that people “land on”
placed pertinently to a certain place.
after they click on a Google Search Ad. In the light of the
2) contextual advertising which considers appearing
Lean theory, landing page could be seen as a unique in-
particular adds on the pages the users surfing at after
strument to advertise products, to increase consumer stream
users` looking for certain Internet pages by the key-
in online sales and decrease waste. By gathering clicks on a
words. For example, if a person is viewing a web page
simply built landing page it’s possible to get information
concerning sport, he can see sneakers, balls or other
about consumers and their needs towards products.
goods for sport.
Generally speaking, there are few types of landing
3) behavioral advertising, the pivotal task of which is to
pages [26]:
collect data about web pages the consumer visits, the
1. Click-through Page – one of the simplest type of land-
time session, the clickthroughs he makes, the key-
ing pages and main purpose of it is to “warm up” visi-
words he types in a web browser etc. So, when enter-
tors towards a product and inform them about offer
ing further web sites the visitors may face particular
while getting them to “click-through”;
ads according to their recent search engine results 1.
40 N. HORBAL, M. NAYCHUK-KHRUSHCH, B. ORLYKOVA
2. Lead Capture Page is more than just a click-through the visitors all the information they need in order to
landing page as its intent is to gather personal data make a purchase through the page.
(name, email address, etc.) of visitors by asking them Hence, the Internet advertising is a compound tech-
to fill the client forms. It gives a possibility to built nique with a plenty of advantages that can significantly
client databases; influence company profitability. Such advertising has
3. Pitch Page helps to attract customers to a product by been steadily growing in popularity since the late 1990’s.
advertising the product and its features. Thr product Year by year the growth in digital advertising has been
pitch page showcases product and keeps the product in averaging nearly 18% and will surely expand in the fu-
the center of attention; ture. Fig. 3 shows the growth in digital advertising com-
4. Sales Page is a standalone page used to sell a products paring to non-digital ones and Fig.4 – an increase in digi-
or services. So it’s a well developed page with high tal advertising revenue of 20,4% in 2015 comparing to
quality of visual presentation, mentioning of sale poli- 2014, which equals $10,1 billion.
tics, terms, etc. The purpose of a sales page is to give

Q4 2015 Q4 2014 Percentage change

4,4
Magazine 4,5 -3%
1,6
Radio 1,5 +6%
2,7
Newspaper 3 -13%

Cable TV 6,4
6,8 -6%
Broadcast… 15,5
15,2 +2%
Internet 14,3
11,7 +23%

Fig. 3. Total ad revenue (Q4 2015/ Q4 2014), bln $. 9

As it can be summarize, crucial benefit of Internet ad-
70 +20,4 59,6 vertising is the immediate publishing of information
60 49,5 which is not limited by geographic or time constraints.
50
$ bln.

40 Thus advertisers can customize advertisements, making

30 consumer targeting more efficient and precise. For exam-
20
10 ple, AdWords, Yahoo! Search Marketing and Google
0
2014 2015 AdSense enable ads to be shown on relevant web pages or
related search results. On the other hand, consumers have
Fig. 4. Digital advertising revenue growth (2015/2014) 9 greater control over the content they see, affecting the
timing, placement, and visibility of online advertisements.
Such situation with extremely expanding Internet ad- Within the scope of Internet marketing, online advertising
vertising can be explained by its undoubted qualities: includes display advertising, affiliate marketing, search
 Firstly, unlike offline media, online advertising can be engine marketing (SEM), and mobile advertising [22].
highly interactive. From incorporating videos and The Internet is expected to continue playing an in-
games to audio messages and sections for query input, creasingly important role in people’s lives in the near and
there are many methods to keep the consumer keenly distant future. Thus posting advertisements in Internet
and constantly engaged; will be definitely cost-effective and will help to reach the
 Secondly, in case of online advertising it is possible to audience all over the world in the short span of time.
collect accurate data of pages visited, quantity of people Internet marketing does huge impact on trade general-
who watched the ads, the number of times the ad was ly and on Internet trade as well. The global volume of
viewed by the same user, how the user reached the ad or Internet sales and e-commerce in general has multiplica-
the website, and whether the activity resulted in a sale; tively grown with Internet advertising growing. Internet
 Thirdly, geo targeting, as it was described previously, is advertising helps to cover absolutely different markets by
one of the most significant factors in choosing the meth- using same instruments and methods. Thereby, a seller
od of advertising. Geo-targeting helps to narrow the tar- can easily reach a consumer in province next to him/her
get audience in order to release only relevant information as well as reach a consumer at other continent at the same
to the users, preventing unnecessary ads as well. time by using same advertising instruments. The speed of
 INTERNET ADVERTISING 41
internet advertising spreading cannot be overestimated  costs for marketing – the newest Internet tools help to
comparing with classical advertising tools. Also the cru- gather information about potential consumers and
cial impact of Internet advertising on trade can be evalu- sales passively and cheaper comparing with classical
ated by economic effects, caused by using Internet tools researches;
for advertising. Minimization of sale costs is one of the  costs for product promotion. Such feature of Internet
mostly expected results. Such costs include: adv as fast information spreading can promote prod-
 costs for using offline tools – any kinds of printed adv, ucts by itself without any special promoting activities.
TV, radio etc.; It’s possible to show and investigate main features of
Internet trade and marketing (Fig. 5).

Key features

Volume of cov- Variability of implementation Speed of Minimization of

erage implementation sale costs

 different mar-  permanent and quick  rapid spread of  costs for classical
kets by volume variation of forms and products advertising tools
 different mar- mechanisms of imple-  instantaneous usage
kets by location mentation spread of infor-  costs for market-
mation despite of the ing
 absence of necessary enterprise’s efforts  costs for product
physical contacts with promotion
clients
Fig. 5. The main features of Internet trade and marketing (designed by the authors)

The most popular sphere for Internet trade is retail in Second place in worldwide rating of Internet commerce
FMCG products. So, obviously the advertising should be belongs to USA (22%, $420 billion). The leader of Euro-
more intensive exactly in this sphere. pean Internet trade is Great Britain. Analyzing number of
About the half of total retail sales in e-commerce active Internet buyers and total buyers in European coun-
sphere in 2016 belongs to China – 47% or $900 billion. tries shows the following data (Fig.6) [7].

Macedonia 11%
15%
Italy 26%
31%
Lithuania 32%
32%
Hungary 36%
37%
Spain 42%
45%
Slovakia 50%
51%
Belgium 55%
58%
Estonia 59%
65%
Finland 71%
73%
Great Britain 81%
0% 20% 40% 60% 80% 100%

Fig.6. Part of active Internet buyers in European countries [7]

According to the forecasts, till 2020 total Internet No doubt the informational facilities, technologies en-
sales volume of products or services ordered using the gross our country, enabling daily life to be easier, wasting
Internet via any device, will increase twice (Fig.7) [7]. less time than before for everyday operations. The statis-
tics shows that globally about 91% of people nowadays
are used to shopping online (Fig. 8). What is more, the
42 N. HORBAL, M. NAYCHUK-KHRUSHCH, B. ORLYKOVA
share of people who do not use Internet has fallen from 2) Demand for products and services from other regions
17% to 9% in the span of 2011-2016 years [28]. has grown, – regions throughout the world are realiz-
6
ing the enormous information resource the Web is and
4,058 are interested in content, and products and services
4 3,418
2,86 that their own regions do not provide.
1,915 2,352
2
1,548 3) Online Payment – barriers which blocked E-
commerce growth throughout the world were different
0 currencies and transaction fees. However, use of the
2015 2016 2017 2018 2019 2020 BitCoin has partly solved this task. International pay-
Fig.7. Forecast of total worldwide retail Internet sales, $ ment system has also activated online trade. Use of
trillions [7] mobile payment applications has made online pay-
ments easy and mass available. Among such applica-
Not only the categories of goods may vary but the age tions the most popular in Europe is the PayPall sys-
category of buyers may as well vary. The main TV- tem, and in Northern America – quite new ApplePay,
audience is mainly older people and residents of small which was launched at the end of 2015.
towns. On the contrary among the main Internet users are Also, from the other hand, adopting Euro in new Eu-
the ones under the age of 45 years who live in big cities. ropean countries makes Internet trade quite suitable for
big business. By enabling better price comparisons, in-
creasing competition and improving deals for online buy-
8%
ers, the Euro is making it easier to conduct business in the
14% 15-29
European online market and providing better entry by
29% 30-44 non-European companies.
45-54 Generally, the usage of Internet tools for advertising,
22% 55-64 promoting and sales has both some benefits and difficulties.
27% The main benefits are completely related with Internet
65+
advantages generally: fast and wide access. It means pro-
ducers can easily and fast promote goods and services at
Fig. 9. The share of Internet-users by the age categories, any part of the Earth, where Internet access is available.
% [28] Also, surely, Internet tools provide the advantage in costs
of advertising and promotion of products.
Generally the main reasons caused necessity of online From the other hand, there are huge risks, related with
presence for companies are [14]: online instruments. Firstly, there are security questions.
1) Internet population has extremely grown for last few Online privacy infringements, corporate hacks, cyber
years. According to the Computer Industry Almanac, attacks all over the world arise the problem of cyber secu-
533 mln people have access to the Internet, which rep- rity on the top of the wave of modern economics and
resents approximately 8% of the world’s population. politics. That’s why cyber protection during Internet mar-
Some part of consumers combine online and offline keting and trade requires attention and particular actions
shopping, but quite big part of them totally abandoned [4, 15]. Providing any online activities in trade sphere
classical purchases for some groups of goods (mostly needed to be combined with cyber security solutions both
clothes, home electronic devices and books [7]). on state, local and business levels.

Fig. 8. Categories of goods people tend to buy (2016/2011), % [28]

 INTERNET ADVERTISING 43
According to the new report published by the research Earth (with Internet
firm MarketsandMarkets [4] the cyber security market is access)
forecasted to grow from $122.5 billion in 2016 to $202.4
3 Costs. Consumers become too
billion by 2021. Due to the growing security needs Lower costs comparing choosy.
of business and consumption via Internet, the cyber secu- with classical advertising Consumer doesn’t trust
rity solutions market is growing instantly. Protection of and promotion instru- easily advertising.
Internet advertising and Internet promotion, Internet sales ments usage.
and Internet payments should take responsibly top place
among Internet trading tasks for business. From the global outlook let’s now move to the devel-
That’s why we put cyber security challenge on the top opment of Internet advertising in Ukraine.
in the list of Internet trade difficulties for business. The share of Internet users in Ukraine is predicted to
Also, the other challenge of Internet tools usage is re- rise from 49% of population (19.7 mln people) in 2015 to
lated to high competition which appears in any trade 60% in 2020 [17]. Half of Ukrainians have access to In-
sphere and arises by wide usage of Internet technologies. ternet at their homes (50.9%), including 51.8% - to high
Generally, online environment is characterized by highly speed, 42.6% and 18.5% use wireless Internet and modem
competitive nature. But, the growth of the Internet has connection respectively. 89.0% of Ukrainian aged 15 to
increased competition tremendously [14]. That’s why it’s 24 read the news on the Internet at least once a week and
important to use additional ways of product’s promotion. as much watching them on television. Internet news are
Among the most popular and efficient Internet instru- preferred by 73.1% Internet users aged 25-34 years and
ments of promotion are the following [24]: by 47.7% and 12.1% in the age range 35-54 and 55+
1) Feedback forms – help to improve goods and services respectively [3].
according exactly to real costumer’s expectations; Internet is the second largest outreach news source in
2) Bookmarking; the country (after television), with about half Ukrainian
3) Content – should be useful for visitors and attract (48.3%) read the news online at least once a week. 58%
them to company’s site; of Ukrainian (21.1 mln. people) use Internet at least once
4) Online Chat; a month. The most visited websites in Ukraine are
5) Surveys – helps to gather information for improving «Google.com», «Mail.ru», «Vk.com», «Yandex.ua» and
advertising, promotion events, sales and business plan «YouTube.com» [23]. 46% of Ukrainian use social net-
in general. works, and among ages 15-24 years the number of users
The other challenge is the other side of high competi- is 89.9%. One of the most popular social networks in
tion – consumers become too choosy. They understand Ukraine are Russian «Vkontakte.ru» and «Odnoklassni-
that using Internet technologies they get easy access to ki.ru» (about 70% of users). American «Facebook» and
plenty of goods and services. Modern consumer gets «Twitter» are used by 42.9% and 21.6%, respectively [3].
access to the huge number of options by using only As for the language preferences of Internet content, the
his/her fingertips. Also the worldwide trend in the con- majority (93.9%) read the information in Russian, three-
sumers’ behavior is that they trust advertising less. Ran- quarters (75.3%) – in Ukrainian and only 19.4% - in Eng-
dom opinion of strangers in Internet can impact a con- lish [3]. Ukrainian-speaking online media is used daily by
sumer choice more than an excellent advertisement. 21%, several times a week – by 17%, several times a
So, summarizing information and research results month – by 5%. One-line media are much more popular
about usage of Internet tools for advertising products and in the western and central regions of Ukraine comparing
promotion sales it is possible to rank its advantages (bene- to the southern and eastern regions [16].
fits) and challenges (difficulties) (Table 1). Among sources of information Ukrainians have the
greatest confidence in friends’ recommendations - 81% of
Table 1. Ranking of advantages (benefits) and challenges respondents. Consumers feedbacks published online and
(difficulties) of Internet tools for advertising products and information on the brands sites are trusted by 63% and
promotion sales usage (designed by the authors) 59% respectively. Among the traditional media Ukraini-
Ranks Advantages (benefits) Challenges (difficulties) ans rely to some extent on advertising billboards and
1 Time. Cyber risks. magazines (34%), information on TV (32%), newspapers
Ability to advertise and The higher risk of cyber (31%) and radio (30%). The level of confidence in the
promote quickly infringements and breaches. new forms of advertising is quite similar to traditional
media: for example, online video ads are trusted by 29%,
2 Coverage. High competition.
Ability to advertise and Competition in online
and advertising in social networks by 32%. Confidence in
promote in any part if the sphere is usually very high. banner advertising and promotional emails is low – 20%
44 N. HORBAL, M. NAYCHUK-KHRUSHCH, B. ORLYKOVA
and 19% respectively. The least trusted among Ukrainians lowing factors: cost reduction and optimization; reducing
is advertising on mobile phones – only 15% of respond- the cost of contact with the consumer; social activity of
ents. Different communication channels are stimulating Internet users; effective targeting; transparency and the
purchases to the different extent; – most buyers are moti- ability to assess the results of communications etc. How-
vated by the recommendations of friends (81%), custom- ever, alongside with the active development of Internet
ers’ feedbacks (69%) and information on the websites of marketing there are also specific problems of such mar-
brands (63%) [27]. keting communications. These include: necessity to en-
Internet trade is one of the most promising retail sure an appropriate level of consumer confidence to
channel in Ukraine, taking into account the growing need online sources; the need for additional analysis of the
among Ukrainian of saving and non-cash payments. In consumer behavior, the effectiveness of online marketing
general, the forecasted increase in sales (before taxation) tools etc.
through the Internet in 2020 comparing to 2015 is 68%, As it can be seen, modern marketing faces many en-
when it will reach 29.5 bln. UAH. Consumers are increas- hancements to appeal more users than ever before because
ingly using the Internet for analyzing and comparing of many reasons. Firstly, the world is going to be mobile
prices using the price comparison platforms (price.ua, as the technologies improve. This way the advertising will
prom.ua etc.) and online stores. In 2015 the most success- be more measurable and the opportunities, formats and
ful Internet retail business in Ukraine was the online store demonstration will broaden. Secondly, in order to allure
«Rozetka», whose market share rose by 3.5% and ac- users the marketing agencies make their ads more sophis-
counted for 31% of retail sales [17]. ticated, non-standard. It may be technology of 360° in
In 2015 the volume of Ukrainian advertising media photo or video, showing the panoramic view as in real
market (8941 mln. UAH) slightly decreased compared to life, visualized ads, chats or ads in popular messengers as
2014 (9,065 mln UAH), while in 2016 the growth of at Viber for example. As a result, the number of Ukrainian
least 12% is predicted as the market volume can achieve users is going to increase making the digital marketing the
10 bln. UAH. The growth in Internet advertising in 2015 one of the most profitable and fruitful sphere of promo-
reached 11% compared to 2014 and is projected to con- tion.
tinue to grow in 2016 by 17% as the spending can achieve
up to 2750 mln UAH. The reasons for such growth are CONCLUSIONS
not only high interest of advertisers to the Internet, but the
devaluation of the Ukrainian currency. The highest The Internet has become a major source of infor-
growth in 2016 is expected in the field of digital video, mation for consumers and what is more, it has exceeded
including «YouTube» and the use of electronic auctions. such traditionally widely-used media resources as radio,
The share of mobile advertising is about 10% of all ban- television, magazines etc. This is no surprising as Internet
ner advertising and search and is projected to grow in contains all needed data with its almost instant access. All
2016 [11]. things considered, it is possible to draw such conclusions
The Internet advertising in Ukraine is developing rap- of the conducted research:
idly and has perspectives to equal its positions with the 1) The ability to follow customers through the Internet
digital marketing in Europe and around the world. creates numerous and vast possibilities for marketers
The results of the analysis allows us to recommend in the competitive global market.
domestic marketers to further activate Internet advertising 2) The main benefits of Internet advertising are: ad-
as the most promising in terms of efficiency marketing vantages in time, wide geographical coverage and
tool. Internet marketing automates the process of interac- economy of costs.
tion with customers, providing personalized service at a 3) From the other hand, Internet features and abilities
convenient time to effectively organize feedback, prompt- have caused new challenges and difficulties, related to
ly receive marketing information to improve advertising their usage: crowing of cyber risk level, high competi-
effectiveness [12]. Integrated use of online marketing tion in online sphere and choosy behavior of consum-
provides a synergistic effect. Such marketing is particu- ers.
larly relevant during the economic crisis because of the 4) Internet technologies in marketing can bring marketers
possibility of introducing low-cost ways of promoting, the real economy and profits. This can be achieved by
use of more original ideas to attract customers with unex- great benefits and facilities which both the consumers
pected creative solutions, improving communication and firms receive.
efficiency [10]. Using the Internet makes it possible to 5) The article outlines recommendations for Ukrainian
measure interest of consumers using time and financial companies to activate Internet advertising as the most
parameters. The feasibility of reallocation of budgets for promising marketing tool and a low-cost communica-
Internet communications is caused primarily by the fol- tions technology.
 INTERNET ADVERTISING 45
Generally, the advertising has always been and is pre- tising Coalition. Marketing in Ukraine, 6 (93), 41-47
dicted to be an important element of marketing, and the (in Russian).
Internet is one of its most promising tools. So, future 12. Mozgova V.G. 2013. Internet-marketing tools and
directions of research can cover the recommendations on their benefits for modern Ukrainian enterprises. Ef-
effective usage of separate Internet advertising instru- ficient Economy, 10, 79-86 (in Ukrainian).
ments and evaluation of their results. 13. Nan X. and Faber R. J. 2004. Advertising theory:
Reconceptualizing the building blocks. Marketing
Theory, 4, 7–30.
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