Promote or inhibit? Research on the transition of consumer potential purchase intention.

Abstract

A dramatic shift from offline to online has happened in consumer behavior, leading to enterprises ploughing a large number of digital advertisements to capture consumers’ attention online. To evaluate the effectiveness of different online advertising, we explore the dynamic impacts of nine different online channels on the transition of consumers’ potential purchase intention and the consumer behavior. We use a continuous-time hidden Markov model (CT-HMM) to capture the transfer path of consumers who are affected by various online channels. Our findings reveal that online advertising has a positive and statistically significant impact on the transition of consumer purchase intention, of which search advertising can significantly increase consumers’ propensity to purchase, and its effect on transferring consumers from high to low purchase intention is not very strong in comparison. However, consumers have a very low annoyance threshold to short messaging service (SMS) advertising, and they are easy to get tired of SMS advertising and transfer to low purchase intention. Most firm-initiated advertising is more likely to transfer consumers to a low purchase intention state. Advertisements which can not improve consumer purchase intention very well have fewer stimulating effects on consumers’ information collection behavior than other advertisements. Our research contributes to the literature on the effectiveness of online advertising and provide some management insights for enterprises.