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ABSTRACT
The main objective of this research is to investigate how price information in online display advertisements affects the consumer’s internal reference price (IRP). The internet context differs from prior pricing research contexts in which consumers allocate all or none of their conscious attention to price stimuli. In this context, consumers allocate some of their attention to ads, but they do so incidentally. Across four studies, we show that these incidental exposures to price information in online ads influence the IRP. The results suggest that the price magnitude used in the online ad (either low or high) determines the price anchoring mechanism at play. The price magnitude in conjunction with ad repetition and ad type (price comparing ad vs. single price ad) also affect the consumer’s IRP. By uncovering these effects in online display advertising, this research contributes to pricing and online advertising research and provides specific insights for online marketers.
Disclosure Statement
No potential conflict of interest was reported by the authors.
Supplemental data
Supplemental data for this article can be accessed online at https://doi.org/10.1080/10864415.2022.2076195.
Notes
1 We further elaborate on the functioning of the semantic anchoring mechanism in the “Eye Tracking and Price Cognition” section and in .
2 Moreover, we measured the participants’ willingness to pay, as another highly correlated variable with IRP, for the 3 models of headphones from 3 different brands, and the results were in agreement with the EP results.
3 All p-values were larger than .5; detailed results are available upon request.
4 7-point Likert Scale (1=Strongly Disagree; 7=Strongly Agree): “I feel I know enough about this product category.”
5 7-point Likert Scale (1=Strongly Disagree; 7=Strongly Agree): “I feel confident in saying that my general knowledge of prices of products in the above depicted product category is quite good.”
6 7-Point Likert Scale (1=Strongly Disagree; 7=Strongly Agree): “On my personal perception, this product category is important to me.”
7 Adding price recall as a control variable does not change the results.
8 We also controlled for the effect of price recall, as proxy for ad recall, and our results did not change.
9 Note that the average fixation duration was longer on high-price ads than low-price ads for the middle and bottom ads, but not for the top ad.
10 In their review of eye-tracking studies, Holmqvist et al. [Citation26] mention that eye fixations are mostly around 200-300 ms, although they can be as short as 30-40 ms. The fixation duration is important not only because it is an indicator of attention, but also because, according to the eye-mind hypothesis [Citation26], it is an indicator of the amount of cognitive processing. Given that the exposure time is less than 30 ms in subliminal priming, whereas the fixation duration for online display ads is usually longer than 100 ms, consumers should process online display ads more deeply than price anchors in subliminal priming.
Additional information
Notes on contributors
Hamid Shaker
Hamid Shaker is a Senior Lecturer in Marketing at Nottingham Business School, Nottingham Trent University. He holds a Ph.D. in Marketing from HEC Montréal. His research interests include behavioral pricing, retargeting, and online consumer behaviour. His work has been presented at several international conferences, including American Marketing Association (AMA), European Marketing Academy (EMAC), Academy of Marketing Science (AMS) and Society of Consumer Psychology (SCP).
Sylvain Sénécal
Sylvain Sénécal (corresponding author) is a Professor of Marketing, holder of RBC Financial Group Chair of E-commerce, and co-director of Tech3Lab at HEC Montréal. His research interests are related to online consumer behaviour (customization, web site evaluation, clickstream analysis) and consumer neuroscience. His work has been published in journals in Marketing and E-commerce, such as Journal of Retailing, Journal of the Academy of Marketing Science, International Journal of Electronic Commerce, and Journal of Interactive Marketing.
Yany Grégoire
Yany Grégoire is a Professor of Marketing and holder of Omer DeSerres Chair of Retailing at HEC Montréal. He has published extensively on the issues of customer revenge, online public complaining, and service failure in major journals including Journal of Marketing, Journal of the Academy of Marketing Science, Journal of Consumer Psychology, Journal of Retailing, MIT Sloan Management Review, and Journal of Service Research and Personnel Psychology
Sihem Taboubi
Sihem Taboubi is a Professor of Marketing at HEC Montréal and a member of Group of Research in Decision Making (GERAD). Her main research covers the applications of game theory to the area of marketing, revenue management, and pricing. Her work has been published in journals including European Journal of Operation Research, International Game Theory Review, Decision Science, and Economics Letters.