ANTECEDENTS AND CONSEQUENCES OF WEB ADVERTISING

CREDIBILITY: A STUDY OF CONSUMER RESPONSE TO BANNER ADS

Sejung Marina Choi and Nora J. Rifon

ABSTRACT: Rapid growth in online advertising revenues indicates the viability of World Wide Web advertising as an alternative
to that of traditional media. Practitioners and academicians recognize that building credibility is important in this relatively new
environment. To date, no academic research has explored the interplay of vehicle and advertiser source credibility in determining
advertising effects on the web. The present study explores antecedents and consequences of online advertising credibility and
examines the effects of (1) website credibility, (2) ad relevance (the advertised product's relevance to website content), and (3)
advertiser credibility on ad credibility, ad and brand attitudes, and product purchase intentions. Structural equation modeling
systematically tested and refined a model representing interrelated relationships among the relevant variables. The results suggest
that source credibility is vital to understanding web advertising effectiveness. Managerial implications and directions for future
research are provided.

The Internet has become a part of everyday life. Over 160 concern for the risks of doing business online may be assuaged
million people are estimated to use the Internet (Nielsen by trust for an established, credible brand or company. Thus,
NetRatings 2002) for a variety of tasks including information online consumers are likely to seek out and purchase brands
search and entertainment. Since 1994 when the first Internet they trust (Moran 1999). Although marketers are still not sure
banner ads were sold, advertisers have been quick to develop how to develop and maintain their credibility or trust (Moran
the medium and reach their audiences. Internet advertising 1999; Smith 2000), dot-com companies spent a considerable
revenue in the United States marked $1.55 billion for the first amount of money on advertising in traditional media (Diaz
quarter of 2002 (IAB 2002), and although its revenues declined 2000; Fitzgerald 2000; Webster 2000) to achieve initial brand
18% from the same period in 2001 due to the slowing recognition and direct consumers to their websites.
economy and the subsequent downward slope in the overall
Practitioners and academics both have acknowledged that the
advertising market, Internet advertising is expected to
website credibility, and the Internet at-large, should be put
continue. In fact, advertising on the Internet is predicted to
into an equation of its message effectiveness (Johnson and
grow to $11.5 billion in 2003, exceeding advertising spending
Kaye 1998; Moran 1999; Rieh 2002; Smith 2000). However, the
in some traditional media such as magazines and radio (IAB
sources and effects of website and banner advertising
2000). Considering Internet advertising's growth, there is little
credibility have not been fully examined; indeed, it is not yet
doubt that the Internet is a powerful and viable alternative to
known if present theories of advertising effects can
traditional media advertising.
accommodate the medium.
With abundant information available to consumers from
The study presented in this article explores the role of source
ostensibly unlimited and often unfamiliar sources, building
credibility in determining Web advertising effectiveness.
credibility and recognition is an essential challenge to Internet
Using traditional advertising effects theories, the study goes
marketers (Elliott 1999; Moran 1999; Smith 2000).
beyond recent investigations of vehicle effects on consumer
Conventional wisdom is that credibility or trust is vital to
response to banner ads. Specifically, the study examined the
successful electronic businesses. However, the credibility of
effects of website credibility and advertising credibility on ad
information presented on the Internet has been questioned
credibility, ad and brand attitude, and product purchase
(Rieh 2002; Wathen and Burkell 2002). Although many
intention. The effects of banner ad relevance (i.e., product
consumers use it, the Internet is still a relatively new and
category advertised to website editorial content) on consumer
sometimes disorientating place for them. Consumers rarely
perceptions of the ad and brand are conceptually developed
find the face-to-face or voice-to-voice interpersonal
based on studies of the matching of celebrity sources to
reassurance provided by sales representatives. Nor are they
products (Kamins and Gupta 1994; Misra and Beatty 1990; Till
likely to find firsthand, physical or tactile experiences that are
and Busler 2000). A structural equation model of the variables
available through brick and mortar stores. For some, the

JournalofInteractiveAdvertising,Vol3No1(Fall2002),pp.1224.
2010AmericanAcademyofAdvertising,Allrightsreserved
ISSN15252019
13 JournalofInteractiveAdvertising
supports the use of traditional effects models; source
credibility and website content/advertised product relevance
significantly influence banner ad outcomes. The results
contribute to the development of a theory of source credibility
and advertising effectiveness on the Web and provide practical
insights into advertising media strategies.
LITERATURE REVIEW
Web Advertising
Web advertising has diverse formats. Sponsorships, classifieds,
and interstitials are among various formats of advertising on
the web. Yet, banner ads are the most prevalent form of web
advertising (Zeff and Aronson 1999) accounting for one-third
of total revenues during the second and third quarters of 2001
(IAB 2001). Some view banners to be the "ad for the ad"
(Harvey 1997, p. 12) because they direct audiences to their
associated target sites (Rossiter and Bellman 1999), often
viewed as the "actual ad" (Harvey 1997). Target sites, which
include corporate websites, campaign sites, and electronic
commerce sites, provide a great amount of information that
cannot be offered in banners. Regardless of their physical
space limitations, banner ads have proven to successfully
generate advertising effects such as brand awareness, attitudes,
and purchase intention (Briggs and Hollis 1997; IAB 2001) as
well as build web traffic (Li 1998). For this reason, they have
attracted the most attention by practitioners and researchers
to date.
Incipient research on banner ad effectiveness essentially
ignored credibility and focused on ad or message-related
characteristics (Ju-Pak 1999; Li 1998). For example, one
experimental study found that animated (versus static) banner
ads generated better recall, and large (versus small) banner ads
enhanced viewer comprehension (Li and Bukovac 1999). More
recent work has attempted to develop a theoretical framework
for advertising effects on the web (e.g., Cho 1999; Rodgers and
Thorson 2000; Rossiter and Bellman 1999) with a shared
assumption that audiences might process web advertising
information differently from that in traditional media due to
the distinctive characteristics of the medium such as
interactivity. In response to consumer and practitioner
concerns (Barilla 2000; Quinn 2001) academic attention has
turned to credibility (Flanagin and Metzger 2000; Johnson and
Kaye 1998, 2000).
Credibility on the Web
The Internet has become an important source for information.
Users encounter abundant and diverse information online, but
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often will intentionally seek information thought to be useful
for achieving their search objectives (Wathern and Burkell
2002); perhaps not an easy task in the new environment where
central control over information is absent. With no
overarching quality control or editing process, anyone can
author or provide information on the Internet. Accordingly,
understanding consumer judgments of web information
credibility is an essential issue for the development of ad
effects models.
Consumers have been found to use cues available at the site to
filter information on the Web. For example, the website
provider's reputation and URL domain type (e.g., edu, gov,
org, or com) are among the criteria consumers utilize to judge
credibility of information presented in the site (Rieh 2002).
Consumer judgments of website information credibility are
more a function of the website provider's credibility (viewed as
the source of information), than by the perceptions of the
actual author or creator of the content (Rieh 2002). Likewise,
credibility of advertising on the Web would be influenced by
the reputation of the website provider. If traditional theoretical
approaches to advertising effects apply to the Internet, then
the perceived credibility of the website may affect the
credibility perception of an ad placed in the site and the
subsequent attitudinal outcomes of the ad. A useful approach
to understanding these relationships is source credibility.
Source Credibility
"Source credibility" is a term commonly used to refer to a
message sender's positive characteristics that influence the
receiver's acceptance of the message communicated (Ohanian
1991), and source credibility has been found, in part, to
determine the persuasiveness of a message (Petty and
Cacioppo 1986). Source credibility perceptions affect message
evaluation, attitudes, and behavioral intentions; more credible
sources (often endorsers in advertising) have been found to
produce more favorable attitudes and stronger behavioral
intentions than less credible sources (Atkin and Block 1983;
Freiden 1982; Friedman and Friedman 1979; Kamins et al.
1989; Ohanian 1991; Petty, Cacioppo, and Schumann 1983;
Sternthal, Phillips, and Dholakia 1978).
Expertise and trustworthiness have been identified as
potentially important and enduring dimensions of source
credibility (Hovland, Jannis, and Kelley 1953; Ohanian 1990;
Tripp, Jensen, and Carlson 1994). Expertise is the extent to
which a communicator is perceived to be able to provide valid,
accurate information (Hovland, Jannis, and Kelley 1953). In
advertising, it is the knowledge that an endorser or
14 JournalofInteractiveAdvertising
spokesperson seems to possess to support the claims made in
the advertisements. Trustworthiness refers to an audience's
belief that the communicator provides information in an
honest manner, without a motivation for manipulation or
deception (Ohanian 1991). Friends and family, for example,
are perceived to be more trustworthy than salespeople
(DeSarbo and Harshman 1985).
Perhaps the most commonly studied source in advertising is
the message presenter or product endorser, often a celebrity.
Well-known people or celebrities are viewed as more credible
and influential than average people in most cases (Atkin and
Block 1983; Freiden 1982; Friedman and Friedman 1979;
Kamins et al. 1989; Petty, Cacioppo, and Schumann 1983;
Sternthal, Phillips, and Dholakia 1978). However, the process
of advertising creation and placement involves more
communicators or sources. Stern (1994) extended the concept
of source credibility by recognizing that research that focuses
only on the persona (i.e., a visible presenter in an ad) does not
explain the broader picture of source effects in advertising; a
full model of source effects must include the sponsor (or
advertiser) and the author of the ad. Creators of ads (e.g.,
designers or producers) in general are not known to the
audience. Of particular note is that advertisers or sponsors of
ads appear to be an important source for ad effects
(Goldsmith, Lafferty, and Newell 2000; MacKenzie and Lutz
1989).
Advertiser Credibility
Recently, advertiser or corporate credibility has received close
attention (Goldberg and Hartwick 1990; Goldsmith, Lafferty.
and Newell 2000; Lafferty and Goldsmith 1999). Corporate
credibility is defined as "the extent to which consumers believe
that a firm can design and deliver products and services that
satisfy customer needs and wants" (Keller 1998, p. 426), and
has been found to have direct, positive effects on attitude
toward the ad, attitude toward the brand, and purchase intent
(Goldsmith, Lafferty, and Newell 2000). In some Attitude-
toward-the-Ad research, advertiser credibility, defined as "the
perceived truthfulness or honesty of the sponsor of the ad,"
appeared to exert a strong effect on attitude toward the ad by
enhancing ad credibility sponsored by the company or
advertiser (MacKenzie and Lutz 1989, p. 51). Ad credibility
refers to the extent to which consumers perceive the message
in the ad to be believable, and is based largely on "the trust a
consumer places in the source of that particular ad" (the
credibility of the advertiser) (MacKenzie and Lutz 1989, p. 61).
Accordingly, advertiser credibility has been identified as one
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of the important factors determining advertising effectiveness.
However, the effects of advertiser credibility in the context of
web advertising are not examined yet. Given the little
information available in banner ads, well-known advertiser
names might lead to credible perceptions of the ad.
Based on the findings of MacKenzie and Lutz (1989) and
Goldsmith et al. (2000) concerning the significant influence
that advertiser credibility may have on a number of ad-related
constructs, the following hypotheses were tested:
H1a: Perceived advertiser credibility is positively and
directly related to ad credibility.
H1b: Perceived advertiser credibility is positively and
directly related to attitude toward the brand.
H1c: Perceived advertiser credibility is positively and
directly related to purchase intent.
Although Goldsmith et al. (2000) found direct effects of
corporate credibility on attitude toward the ad, the Attitude-
toward-the-Ad model suggests the influences of advertiser
credibility on ad attitudes be mediated by ad credibility. Thus,
no direct relationship of advertiser credibility to attitude
toward the ad was proposed.
Another source of influence, which has been studied less than
other types of sources, is the medium of advertising
placement. Consumer perceptions of a medium in general,
and the particular vehicles (in this case websites) of ad
placement would be expected to have effects on consumer
responses to an ad.
Vehicle Source Effects: Website Credibility
Advertisements do not appear alone. Mass media
advertisements typically appear embedded in a non-
advertising (i.e., editorial or programming) context within a
medium and vehicle. Vehicle source effect is "a measure of the
relative value of an ad exposure as a function of the exposed
vehicle" (Aaker and Brown 1972). That is, it represents the
differential effect that an ad exposure will have on an audience
exposed in one vehicle as compared to that exposed in
another. Several empirical studies have shown that different
vehicles can influence the persuasiveness of the same ad
(Aaker and Brown 1972; Freiden 1982; Winick 1962). High-
status vehicles are in general more effective than low-status
vehicles in producing positive advertising outcomes.
These vehicle effects evidenced in traditional media, most
notably the creation of credibility perceptions, reasonably
15 JournalofInteractiveAdvertising
could be expected for banner ads on the web as well
(Shamdasani, Stanaland, and Tan 2001). Consumers are
presented with thousands of websites when searching for
information and they can easily move from one site to another
sometimes even accidentally by clicking on links. Unlike in
conventional media such as newspapers and magazines,
consumers have instant access to a huge number of vehicle
sources on the web. With the large number of websites
available, consumers tend to seek credible information
provided by well-established websites. In addition, since
banner ads are inherently short on information, it is more
likely that people might use other cues available at the time of
processing (e.g., vehicle source or site provider) to make
judgments of the ads. Indeed, website reputation has been
found to serve as a cue for consumer inference-making about
the content carried in the site including the ads appearing in
the website (Hermes 1996; Shamdasani, Stanaland, and Tan
2001).
Shamdasani, Stanaland, and Tan (2001) assessed three-way
interaction effects between website reputation, advertised
product/website content relevance, and product involvement.
The results suggest that consumer evaluations of banner ads
for low-involvement products are mainly determined by
website reputation, whereas the effectiveness of the banner ads
for high-involvement products is enhanced by relevance
between the advertised product category and content of the
host site. Of note is that both website reputation and relevance
were found to have positive effects on the dependent variables
(i.e., attitude toward the ad, attitude toward the brand,
intention to click on banner ads, and purchase intention).
Accordingly, website credibility was expected to lead to
favorable advertising outcomes and the following hypotheses
were tested to assess the effects of the website credibility on ad
and brand evaluations. The credibility perceptions of the
website were hypothesized to have a direct effect on ad
credibility that in turn influences attitude toward the ad
(MacKenzie and Lutz 1989).
H2a: Perceived site credibility is positively and directly
related to ad credibility.
H2b: Perceived site credibility is positively and directly
related to attitude toward the brand.
H2c: Perceived site credibility is positively and directly
related to purchase intent.
As evidenced in Shamdasani, Stanaland, and Tan's study
(2001), content of the website in which banner ads appear
Fall 2002
influences consumer responses to the ads and the advertised
product. Along with vehicle source effects, effects of the
context or environment of the vehicle in which ads are
embedded have been suggested in conventional media.
Context Effects: Relevance Between Website Content and
Advertised Product
Research has shown that an advertiser or endorser delivering
the same advertising message to the same audience can
generate different effects depending on the ad environment -
the context in which the ad is embedded (Aaker and Brown
1972; Chaiken and Stangor 1987). Context can influence
audience perceptions of the ad and the advertised product.
When the advertised product fits well with the context, the
content presented in the environment, the audience is likely to
find the ads more useful and interesting. Individuals are more
likely to use vehicles that meet their special interests or
informational needs within a medium. Correspondingly, ads
that promote products that are relevant to the content of the
vehicle in which the ads appear would induce more positive
audience responses.
Relevancy between content of a vehicle (i.e., website) and the
product category of banner ads placed in the site has been
found to enhance consumer responses to banner ads (Cho
1999; Shamdasani, Stanaland, and Tan 2001). Research on
celebrity endorsers in advertising also provides evidence that a
good match or congruence between source and product leads
to more positive ad and brand evaluations (Kamins and Gupta
1994; Kamins et al. 1989; Till and Busler 2000). Perhaps the
expertise dimension of source credibility can explain relevance
or congruence effects. That is, if the site is considered as
reputable or prestigious, the relevance or compatibility
between the content of the site and the product category
extends the credible image of the source, which is perceived as
an expert by the consumer. People might be more likely to
perceive the placement of the ad as the vehicle's approval of or
endorsement for the product if they notice a congruent fit
between the expertise of the source (i.e., website provider) and
the product category. Relevance or congruence between the
content of the site and the advertised product was predicted to
influence consumer credibility perceptions of the ad as well as
brand attitudes and purchase intent, and the following
hypotheses were proposed to test the expected relationships.
H3a: Relevance between the content of the site and the
advertised product on the site is positively and directly
related to ad credibility.
16 JournalofInteractiveAdvertising
H3b: Relevance is positively and directly related to
attitude toward the brand.
H3c: Relevance is positively and directly related to
purchase intent.
Attitudes toward the ad and the brand and purchase intention
have long been examined as advertising outcome variables.
The aforementioned roles of website credibility and website
content/advertised product category relevance have been
discussed in enhancing credibility perceptions of the ad, brand
attitudes, and purchase intention. However, they are also
expected to exert indirect influences on attitude toward the ad
through ad credibility, as evidenced in the Attitude-toward-
the-Ad study (MacKenzie and Lutz 1989). In addition, the
interrelationships among ad attitudes, brand attitudes, and
purchase intent have been suggested and tested in prior
research. Many studies have assessed the effects of attitude
toward the ad on attitude toward the brand that subsequently
influences purchase intent (Goldsmith, Lafferty, and Newell
2000; MacKenzie and Lutz 1989; MacKenzie, Lutz, and Belch
1986). Thus, the following hypotheses are put forth to create a
more comprehensive picture of the relationships among the
variables, and explain ad effectiveness more completely.
H4a: Ad credibility positively and directly relates to
attitude toward the ad.
H4b: Attitude toward the ad positively and directly relates
to attitude toward the brand.
H4c: Attitude toward the brand positively and directly
relates to purchase intentions.
The Study
A study was undertaken to examine source effects in the web
advertising process. Although the issue of credibility on the
web has received increased attention due to consumer
uncertainty and security concerns, research on what
determines perceived web ad credibility is scant. The purpose
of the present study was to systematically assess the effects of
advertiser credibility, website credibility, and website
content/advertised product category relevance on the
subsequent ad outcome variables: ad credibility perceptions,
attitudes toward the ad/the brand, and purchase intent.
Toward this end, a model was constructed with the
hypothesized causal relationships among the variables (Figure
1). Structural equation modeling systematically and
simultaneously tested the interrelated, structural linkages and
provided a comprehensive understanding of the process.
Fall 2002
METHOD
Websites and Banner Ads
The current study measured online consumer responses to a
realistic banner ad appearing in a created website. For this
purpose, eight versions of websites and banner ads were
professionally developed to reflect several cases of banner ad
placement. A concern of this study was to generate variations
in consumers' credibility perceptions to detect the structural
relationships of the relevant components in the proposed
model. Correspondingly, two online photojournalism
magazine sites with an editorial feature and two banner ads
were developed. "LIFE" was chosen as a well-established online
magazine and a real but barely known magazine site "foto8"
was selected from a search on the Internet as a less known
vehicle. To create a more "realistic" exposure setting, the
content of the website, a feature story about digital
photography was chosen for its easiness to read and expected
personal relevance to the participants (i.e., college students) in
the study.
The banner ads featured a digital camera or an MP3 player.
These product categories were selected for their relevance and
availability to the study participants. Digital cameras were
expected to more closely relate to the content of the website
(high relevance) than MP3 players (low relevance). Kodak and
Sony were selected as reputable advertisers for the digital
camera and MP3 player ads respectively. A fictitious
advertiser, Keica was used to represent the case of an unknown
or unfamiliar advertiser promoting its products online. A
fictitious, neutral, brand name, MX5200 was used for both
products in all of the banners, as a newly introduced brand to
prevent any possible effects of prior experience or knowledge
with real brands. The rectangular-type banner ads were placed
on the top of the front pages of the websites. Participants saw
one of the eight versions of the materials. Four banners used
for the study are shown in Appendix A.
Participants
A total of 294 male (45%) and female (55%) students
participated in the study. Subjects were recruited from
undergraduate courses at a Midwestern university. The
courses were campus-wide electives so that the participants
represented a variety of majors and backgrounds. Their ages
ranged from 18 to 28 years, with an average of 21 years. Over
90 percent of the participants were single and Caucasians.
Missing data were treated with listwise deletion of cases and a
final sample size of 267 was used for analysis.
17 JournalofInteractiveAdvertising
Procedure
The study was administered in groups of 10-20 in a computer
lab on campus. Participants were asked to browse one of the
eight varieties of the websites as they normally would. After 5
to 10 minutes passed, they turned off the monitor and filled
out a paper-pencil questionnaire. Upon completing each
session, they were debriefed and dismissed.
Measures
Most of the measures employed here were adapted from
relevant research and have been commonly used in the
domain of this topic. Attitudes toward the ad and the brand
were measured on a three-item, seven-point semantic
differential scale. The items were anchored by "good/bad,"
"pleasant/unpleasant," and "favorable/unfavorable"
(MacKenzie and Lutz 1989). The scales were found to be
reliable (ad attitudes: = .90; brand attitudes: = .88). Credibility
perceptions of the website were assessed on a three-item,
seven-point semantic differential scale by asking how
"believable/ unbelievable," "convincing/unconvincing," and
"credible/not credible" participants thought the website was
(MacKenzie and Lutz 1989). This website credibility scale
appeared to be less reliable ( = .73). It may be because website
credibility has never been measured on the scale although it
was employed as a relevant measure. Advertiser credibility ( =
.92) was assessed on a six-item, seven-point semantic
differential scale anchored by "believable/unbelievable,"
"credible/not credible," "trustworthy/not trustworthy,"
"dependable/not dependable," "reliable/unreliable," and
"reputable/unreputable" (Lafferty and Goldsmith 1999;
MacKenzie and Lutz 1989). Purchase intention was measured
on a two-item, five-point Likert scale ( = .78). Relevance
between advertised product and website content was measured
on a four-item, seven-point, semantic differential scale with
endpoints of "compatible/not compatible," "good fit/bad fit,"
"relevant/irrelevant," and "congruent/not congruent"
(Shamdasani, Stanaland, and Tan 2001; Till and Busler 2001).
The scale was found to be reliable ( = .94).
DATA ANALYSIS AND RESULTS
Overview
Before testing the proposed hypotheses, initial analyses
examined differences that resulted from the different versions
of the materials shown to the participants. No information on
the websites and advertisers were provided and thus the
subjects' evaluations of them were expected to rely on their
own judgment. Since the websites and advertisers were either
Fall 2002
known or unknown, familiarity scores were obtained to assess
differences between the two types of websites or advertisers
respectively. Next, the effects of advertiser/website familiarity
and relevance were tested using ANOVAs.
Subsequently, to better understand interrelationships between
the constructs of interest, a proposed structural equation
model was tested and retested with AMOS 4, using the two-
step model-building approach that tests the measurement
model before examining the hypothesized structural linkages
(Anderson and Gerbing 1988). A measurement model that
included latent constructs was first analyzed. As the next step,
the proposed model with hypothesized relationships was
tested and refined through a series of tests in an attempt to
better explain the data. A final, modified model is presented as
a result.
Testing Differences across Conditions
T-test results on website familiarity and involvement with the
website content showed no significant differences between the
two websites (website familiarity t = .45, df = 265, p > .1;
content involvement t = .57, df = 265, p > .1). However,
another t-test indicated that known advertisers were
significantly more familiar to the participants (M = 6.28) than
the unknown advertiser (M = 2.9; t = 20.28, df = 265, p < .01).
Significant differences in perceived relevance between the
advertised product and the website content was also found
between the two product categories by using a t-test (digital
camera M = 5.86; MP3 player M = 4.28; t = 9.40, df = 265, p <
.01), although the relevance scores for both products were
above the mid-point on the scale.
A series of ANOVAs were performed to examine differences
in scores on the variables of interest across the eight versions
of the materials. The results showed no significant differences
(p > .05) in the measures depending on the varieties of the
materials the participants were exposed to. One exception was
advertiser credibility; the known advertisers were viewed to be
more credible (M = 5.77) than the unknown advertiser (M =
4.67; F(1, 259) = 85.80, p < .01), although the unknown
advertiser was also deemed relatively credible as the rating was
above the mid-point on the 7-point scale. Although advertiser
credibility was found to vary with advertiser types, the
ANOVA results did not indicate significant differences in the
other relevant variables (i.e., ad credibility, ad attitudes, brand
attitudes, and purchase intent) based on the two advertiser
conditions. Given the non-significant differences among the
materials, structural equation modeling was pursued to test
the proposed hypotheses and investigate the interrelationships
18 JournalofInteractiveAdvertising Fall 2002

among the relevant constructs. Differences in the advertiser Table 3. Factor Loadings of Indicators of Latent Constructs
credibility perceptions were expected to generate variations in
the construct of advertiser credibility that was hypothesized to
subsequently influence the other variables in the model.
Testing the Measurement Model
The measurement model was tested in the first step. The
means, standard deviations and scale reliabilities of each latent
construct are reported in Table 1.
Table 1. Means, Standard Deviations, and Scale Reliability
Coefficients

The measurement model was analyzed and improved with

AMOS 4. All the items or indicators significantly loaded on
the corresponding factors (p < .01). Some error terms were
allowed to covary as modification indices available in AMOS 4
suggested when the error terms were considered to have
reasonable, correlated relationships conceptually as well. Table
2 presents correlations of all latent constructs in the
measurement model used in the development and refinement
of the structural model and Table 3 reports the factor loadings
for each latent variable. The goodness-of-fit indices indicated a
good fit of the measurement model with the data: 2 = 263.62,
df = 217, p < .05; GFI = .93; AGFI = .90; NFI = .94; CFI = .99;
RMSEA = .03.
Table 2. Correlations of Latent Constructs
Analyzing Structural Relationships
The first step in testing the fit of the model was to estimate the
paths in the proposed model in Figure 1. The parameter
estimates for this model are reported in Table 4. Of the twelve
proposed relationships, nine were statistically significant in the
expected direction (p < .05). H1a (advertiser credibility to ad
credibility), H1b (advertiser credibility to brand attitudes),
H1c (advertiser credibility to purchase intent), H2a (site
credibility to ad credibility), H3b (relevance to brand
attitudes), H3c (relevance to purchase intent), H4a (ad
credibility to ad attitudes), H4b (ad attitudes to brand
attitudes), and H4c (brand attitudes to purchase intent) were
supported. Contrary to expectations, however, three
relationships were not significant (p > .05), disconfirming H2b
(site credibility to brand attitudes), H2c (site credibility to
purchase intent), and H3a (relevance to ad credibility).
19 JournalofInteractiveAdvertising
Table 4. Parameter Estimates
The goodness-of-fit indices suggest that the proposed model
fits the data well; 2 = 276.67, df = 223, p < .01; GFI = .92; AGFI
= .89; NFI = .94; CFI = .99; RMSEA = .03. However, in an
attempt to refine the model and achieve parsimony, the non-
significant relationships were tested in the second phase of the
analysis by systematically relaxing a restriction and examining
the resultant change in chi-square. That is, chi-square indices
of the models without each of the paths were reestimated and
compared to the proposed model. The paths (1) from site
credibility to brand attitudes, (2) from site credibility to
purchase intent, and (3) from relevance to ad credibility did
not yield significant changes in chi-square: (1) 2difference =
1.27, df = 1, p > .05; (2) 2difference = .61, df = 1, p > .05; (3)
2difference = .73, df = 1, p > .05). Thus, these three paths,
which did not significantly contribute to improvement of the
model fit, were removed.
Parameter estimates for the revised model are presented in
Table 4. Overall this final model accounts for the data well; 2 =
278.71, df = 226, p = .01; GFI = .92; AGFI = .90; NFI = .94; CFI
= .99; RMSEA = .03. To compare the original model and the
modified model, the chi-square difference between the two
models was estimated. The resultant chi-square change did not
indicate significant improvement of the final model in the
model fit; 2difference = 2.04, df = 3, p > .05. However, the
modified model was chosen as the final model because it is
more parsimonious without any non-significant causal
Fall 2002
linkages and the goodness-of-fit statistics indicate a slightly
better fit of the revised model with the data (i.e., AGFI = .89
for the proposed model; .90 for the final model). See the final
model in Figure 2.
DISCUSSION
With its brief history, the World Wide Web is still struggling
to build credibility or trust on the consumer side; in fact the
Wall Street Journal committed an entire section of its
September 16, 2002 issue to trust in e-commerce (Wall Street
Journal 2002). Trust and the believability or credibility of
website providers, their content, and advertising is still at
issue. This study proposed and examined a structural equation
model for understanding antecedents and consequences of
online advertising credibility in the context of banner ads.
Overall this study expands the literature on source credibility
and web advertising effectiveness by examining relevant
variables in a systematic way. The results of the study revealed
many significant relationships among the variables of interest.
Of particular note are the effects of advertiser credibility and
website credibility on consumer responses to banner ads. They
may deserve future research attention because they appear to
drive ad credibility perceptions that ultimately lead to ad and
brand attitudes and purchase intention. Most importantly, the
final "best fit" model shows that source credibility perceptions
and website/product relevance cannot be ignored in studying
ad and brand-related outcomes and have merit to further our
understanding of web advertising effectiveness.
Results suggest that credibility perceptions play an important
role in the development of ad/brand attitudes and purchase
intent. Both advertiser and website credibility perceptions
appear to influence banner ad credibility that subsequently
affects attitudes toward the ad/brand and purchase intention.
The credibility perceptions of these two ad sources (i.e.,
vehicle and advertiser) determine consumer judgment of how
believable the ad is which in turn strongly influences ad
attitudes. Although website credibility was not found to exert
direct effects on attitude toward the brand and purchase
intent, advertiser credibility appears to directly influence
brand attitudes and purchase intention. Consistent with the
findings in traditional media (Goldsmith, Lafferty, and Newell
2000), advertiser credibility enhances ad/brand attitudes and
purchase intention. Perhaps in this still relatively new
environment (i.e., the Internet) the credibility of the company
who manufactures and sells the advertised product plays a
more important role in consumer responses to banner ads,
than the credibility of its site of placement. Consumers want to
20 JournalofInteractiveAdvertising
rely on companies they have known and thus they can trust.
Website credibility may be more important when the site
actually serves as retailer.
Vehicle source effects and context effects in traditional
advertising may hold true for online advertising, and therefore
should be taken into account to develop effective web
advertising strategies. As for media placement strategies on the
web, relatively unknown advertisers, who are not perceived to
be credible by consumers but want to produce positive
consumer perceptions of the brand quickly through online
advertising, may need to find places that are viewed as credible
sources for their ads and product information in them. When
their brand does not have an established image, it would be a
good idea to place its ads on websites perceived as credible and
relevant to the product category by target audiences. This
would facilitate the process of building a credible, favorable
image of the brand and greater intention to purchase the
product by making the ad of the brand more credible. On the
other hand, well-known advertisers with established
reputations can rely on their own credible image to generate
positive ad outcomes. Although credible websites still help to
make their ads more credible, reputable advertisers have more
options for vehicles selections. They can place banner ads in
somewhat less credible websites because creating ad credibility
is not a big concern for them. Rather, they may need to
consider relevance as an important factor in selecting websites
for banner ad placements because when the website content is
closely related to the advertised product category, brand
attitudes and purchase intent are enhanced.
Unexpectedly, website content/advertised product relevance
was not found to exert a direct effect on ad credibility although
it directly influenced attitude toward the brand and purchase
intent. The absence of relevance effects on ad credibility may
be a function of the ads and conditions created for this study.
This study appeared to be a test of the role of relevance when
relevance exists (digital camera M = 5.86 / MP3 player M =
4.28), and advertiser credibility is moderate to high (digital
camera M = 5.77 / MP3 player M = 4.67). It is possible that the
effect of relevance, or the lack thereof, on credibility may be
triggered or only salient when it does not exist. Internet users
may have developed an expectation of customization of
website content. The savvy user may desire and expect
advertising to match his or her needs as defined by the website
choice, hence a match between the advertiser and information
content of the website. Indeed, ad relevance maximizes the
utility of both ad and website content to the site visitor. Users
may not notice when ads are relevant since a match meets
Fall 2002
expectations or schema for desirable websites, and so would
not trigger processing interrupts (Bettman 1979) or additional
elaborations as predicted by schema theory (Hastie 1984; Srull
1981) for unexpected pairings. However, when ad content
does not match site content, the user may notice, stop
processing, and discount the credibility of the advertiser and
ad content on the basis of its low utility. Experienced users
may wonder why irrelevant ads appear on the website, and
perhaps infer that the advertiser is not as savvy as the user.
Schema theory may hold promise to direct future research.
Methodologically, future studies might try to create and
compare poor matches of product category and website
content to relatively good matches for credibility effects.
Although the present study offers a more comprehensive
picture of the issue of web advertising credibility by examining
the interrelationships between its antecedents and
consequences, other variables can be added to the picture.
Consumer involvement with the product was not included in
the model presented in this study. In addition, involvement
with the website content might have differential impacts on
these effects. For instance, when consumers have strong
interest in the content, they might find the information on the
product relevant to the content more useful and in turn have
more favorable responses to the ad. Similar to the concept of
credibility of advertising in general in the Attitude-toward-
the-Ad research in conventional media (McKenzie and Lutz
1989), credibility of the web advertising in general might also
determine consumer credibility perceptions of a particular
banner ad. Also, future research could test these relationships
in the context of other, more traditional media, so that media
driven similarities and differences in consumer response
patterns can emerge. Source credibility is likely to be
important in all media, but consumer perceptions of
credibility in web advertising may be less certain than in more
familiar, traditional media and vehicles. Audiences might view
conventional media as more credible than the Internet
(consider for example, how newspapers are perceived as a
more credible medium than other traditional media) ("NAA
Report" 2001; Flanagin and Metzger 2000), and this difference
in media credibility might also create differences in ad and
brand credibility, ad and brand attitudes, and purchase
intentions.
Pragmatically, the results of the study suggest that popular
websites with high prices that reach many Internet users may
not be good choices for banner ad placements if the website
content is too general to generate relevance perceptions and
the subsequently desirable brand attitudes and purchase
21 JournalofInteractiveAdvertising
intent. In addition, although they are related, website ad rates
and website perceived credibility may not exactly correspond.
Ad rates are mostly determined by direct-response measures
such as the number of visitors to the sites or click-through
rates. Consumer judgment of website credibility as well as
relevance between website content and advertised product
should be put into the media placement equation.
Figure 1. Proposed Model
Figure 2. Modified Model
Fall 2002
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APPENDIX A
Banner Ads
1. Known Advertiser / Digital Camera
2. Unknown Advertiser / Digital Camera
3. Known Advertiser / MP3 Player
4. Unknown Advertiser / MP3 Player
24 JournalofInteractiveAdvertising Fall 2002

ABOUT THE AUTHORS

Sejung Marina Choi (Ph.D., Michigan State University) is an
Assistant Professor of Advertising at The University of Texas
at Austin. Her research interests are in the areas of source
credibility, cause-related marketing, advertising on the
Internet, and cross-cultural consumer behavior; Email:
marina@mail.utexas.edu.
Nora J. Rifon (Ph.D., City University of New York) is an
Associate Professsor in the Department of Advertising at
Michigan State University. Her research interests include
consumer privacy, cause-related marketing, sponsorships, and
source credibility; Email: rifon@msu.edu.