Exploring YouTube Marketing Communication: Brand awareness, brand image and purchase intention in the millennial generation

Abstract

Companies can use digital media in promoting their business or social media like Facebook, Instagram, YouTube. Many researchers examine the effects of different uses of social media on consumer buying behavior from different perspectives. The purpose of this research is to see the application of YouTube Ads in building brand awareness and brand image and its effect on purchase intention. Respondents in this study are millennials who are in Batam City and surrounding areas with an age range of 18–35 years chosen using the non-probability sampling method. This study uses Structural Equation Modeling (SEM) with the SmartPLS. YouTube Advertising influences brand awareness and brand image, whereas brand awareness and brand image do not affect purchase intention. YouTube ads are directly related to the purchase intention. Brand awareness and brand image are not mediating variables because they are not associated with purchase intention.

Keywords:

• digital marketing
• YouTube Marketing Communication
• consumer behavior

PUBLIC INTEREST STATEMENT

This paper analyzes the role of YouTube Marketing Communication (YMC) in strengthening brand image, brand awareness and purchase intention. Marketers are trying to increase the purchase intention of an audience who sees an ad. For some people consider that advertising on YouTube is no longer relevant because it interferes with the activity of viewing a content. Marketers must be observant in seeing the changes that occur in advertising today. Therefore, the right YouTube Marketing Communication strategy will increase brand image, strengthen brand awareness and the ultimate goal of buying intent on a brand. The existence of this research is expected to be a reference for marketers to draw up an appropriate communication strategy especially in millennial generation.

1. Introduction

Technology continues to develop. In the beginning, technology is only used to help people in running their activities. The everyday actions of human beings always connect with technology because technology can improve human beings to communicate, search for information, and access entertainment. Using communication technology can address distance problems. Technology can connect someone from one region to another. Thus, technological developments change human behavior in communicating, buying products, and accessing entertainment content. In recent years, Internet users have experienced a growth of 33% worldwide. It can provide greater acceptance for consumers as a medium that can facilitate information retrieval and how to end the purchase of products and services (Gerrikagoitia et al., 2015).

Table 1. Outer model

No	Criteria	Standard	Results
1	Loading Factor	≥ 0.6	BA1 = 0.866	PI1 = 0.817
			BA2 = 0.854	PI2 = 0.886
			BA3 = 0.734	PI3 = 0.898
			BI1 = 0.754	YA1 = 0.709
			BI2 = 0.767	YA2 = 0.775
			BI3 = 0.841	YA3 = 0.797
				YA4 = 0.852
2	Composite Reliability	≥ 0.6	BA = 0.860 BI = 0.831 PI = 0.901 YA = 0.865
3	Average Variance Extract (AVE)		BA = 0.673 BI = 0.621 PI = 0.752 YA = 0.616
4	Square Root AVE	Higher than the correlation value between variables	The value of AVE squared is smaller than the correlation value between variables

Source: Data Processed.

Table 2. Inner model

Variable	Original Sample (O)	Sample Mean (M)	Standard Deviation (STDEV)	T Statistics (|O/STDEV|)	P Values
Brand Awareness -> Purchase Intention	0.113	0.104	0.097	1.171	0.242
Brand Image -> Purchase Intention	0.097	0.104	0.085	1.139	0.255
YouTube Ads -> Brand Awareness	0.572	0.575	0.077	7.399	0.000
YouTube Ads -> Brand Image	0.488	0.494	0.089	5.485	0.000
YouTube Ads -> Purchase Intention	0.732	0.738	0.058	12.689	0.000

Source: Data Processed

Based on the results of the survey of APJII penetration of Internet users in Indonesia continues to increase from year to year seen from the year 2014 only ranged from 88.1 million users. While in 2018 amounted to 171 million users of the total population in Indonesia of 264 million people, this has increased from the previous year in 2017 internet users in Indonesia only 143 million users (APJII, 2018). With the rapid increase in Internet users in Indonesia, causing changes to the marketing patterns undertaken by several companies. Using technology in the marketing process facilitates the company in determining its market target so that the company can save time and money (Febriyantoro & Arisandi, 2019). The company used to measure marketing costs of installing banners, printing flyers, TV commercials, and radio advertising. The company has modified its strategy by using technological sophistication to sell its goods and companies via social media such as Twitter, Instagram, WhatsApp, Line. To keep up with market changes and consumption patterns of consumers, the company began to devise new strategies to reduce market saturation and increase its share.

Based on data from We Are Social (2019) states that the total population of Indonesia is 268 million people. Internet users and active users of social media, each with 150 million users. So it can be stated that Indonesia has a significant market possibility of companies to target their marketing programs through digital content. With 150 million active users, companies need to create appropriate marketing programs and attractive ad impressions so they can attract attention from social media users. Previously, marketers create captivating advertising messages and the purchase of space in the media to be conscious of consumer expectations and develop a preference for buying a brand. Social media marketing has a communication style that can not be changed or withdrawn by shifting the way consumers select, share, and assess information. With the advent of social media, traditional media like television and newspapers have lost viewers or readers who feel confused and may have diminished their power as a network ad (Duffett et al., 2019).

Advertising patterns are now interactive because of the existence of technological developments and communication so that there is a change in company marketing activities. Customers interact with the company through digital channels encouraging the company to realize the need to record interactions with customers and measure performance to serve as a reference for designing marketing strategies Effective (Chaffey & Patron, 2012; Febriyantoro & Arisandi, 2018). A campaign is part of marketing activity to create awareness of an audience. Product-oriented campaigns occur in environments that require companies to bring out the uniqueness of their products. So now, it will be a campaign through the most popular digital channels and often used by companies that are the YouTube platform (Rodriguez, 2017).

YouTube users are over one billion per month worldwide. This number is one-third of the total number of internet users worldwide. YouTube is the most popular platform now, so the popularity of YouTube will continue to increase in line with the increasing number of internet users. It predicts YouTube users to reach 1.78 billion users and will continue to grow in 2021 by 1.86 billion users (Statista, 2019). The increasing popularity of YouTube because of the user’s dependence on getting information, entertainment, and education. Users use the YouTube platform to find the latest sources of information. Google states that YouTube users are looking for various entertainment content by 57 percent, while 86 percent watch YouTube for finding the latest sources of information. Indonesia also experienced it, and Google conveys findings ranging from increasing popularity, YouTube, user demographics to the most desirable content by YouTube users in Indonesia (Techinasia, 2018).

According to data from We Are Social (2019), who surveyed in 2019 of internet users in Indonesia. There is a percentage of active users of the social media platform. YouTube ranks first for the platform most frequently used by social media users in Indonesia, with 88 percent. The second rank is the Whatsapp platform, with 83 percent, and Facebook ranks third with 81 percent. From these results, it can be seen that the most common YouTube platform used mainly by Internet users in Indonesia. So this is an opportunity for companies to increase brand awareness, brand image, and ultimately on purchase intentions.

YouTube role in Indonesia continues to improve, and it can for the duration of accessing YouTube each year with a second increase year over year. Based on the results of the research, YouTube users in Indonesia, 92 percent of the first goal is to search for video content. Users are more comfortable accessing exciting content from YouTube. Several surveys indicated that the popularity of YouTube could compete with television, 53 percent of the 1,500 people interviewed said that accessing YouTube every day and the rest of television watching (Techinasia, 2018). Some companies use YouTube to advertise. As seen from its effectiveness, YouTube is an effective medium to show advertisements for its products. When viewed on YouTube, there are two types. The first is non-skippable adverts and skippable advertisements. Each has advantages and disadvantages. If non-skippable viewers see the entire ad displayed while skippable viewers can skip the ad, with a waiting time of 5 seconds, viewers will skip the ad posted by the company. Previous studies have produced findings that demographics, duration of impressions, access. Ad impressions have a positive effect on cognitive attitudes through YouTube marketing communication (YMC) (Duffett et al., 2019). This study looks at the role of YouTube marketing communication (YMC) on brand awareness, brand image, and purchase intention.

Some researchers discuss the effects of different uses of social media on consumer buying behavior from different perspectives (Bouhlel et al., 2010; H. Y. Hsu & Tsou, 2011; C. L. Hsu et al., 2013; Mir & Zaheer, 2012; Saxena, 2011; Febriyantoro & Arisandi, 2019). Discussing YouTube, the first site that comes to users’ minds. The fact shows that Google owns YouTube when a search on Google, YouTube site is always on top; this reflects that YouTube is different from other platforms. Since the amount of content is uploaded on YouTube every day and some of it is a product that is related, with YouTube being one of the platforms where consumers look for product information before deciding to buy. Therefore, marketers need to look at the factors that influence consumer purchase intentions in YouTube advertising videos. The purpose of this study is to contribute to the consumer behavior literature by examining the effects of user-generated content in YouTube videos on consumer purchase intentions, as well as looking at the relationship of brand awareness and brand image.

Some research also explores consumer attitudes and influences on the intensity and spending behavior of advertising on the internet. Informativeness, irritation, and entertainment are determinants of attitudes towards web advertising (Ducoffe, 1995; Y. J. Kim & Han, 2014) as well as the credibility of the fourth influential factors (Yang et al., 2014). Intensity and shopping behavior are also influenced by flow as a mental condition for focusing and engaging in something. (Y. J. Kim & Han, 2014; Yang et al., 2014).

This study aims to find the attitudes and behavior of YouTube users towards advertising. As a form of information that is avoided, advertisements provide the possibility to be watched or ignored. This research is critical as a guide for marketers to create ads that increase watching opportunities.

2. Literature review

2.1. YouTube Marketing Communication

It developed YouTube as an ICT digital information and entertainment channel but later became a significant revenue-generating channel. YouTube content is available but generates revenue through marketing communication through mobile devices, such as smartphones. YouTube has created considerable growth. YouTube offers a variety of options and formats for marketing communication organizations (Stokes, 2013). YouTube Marketing Communication (YMC) has become an essential promotional tool, among organizations, with almost 80% of marketers arguing that YouTube is a marketing communication platform through useful online digital video. Therefore, it is not surprising that YouTube Marketing Communication (YMC) is responsible for the more significant part of the promotion budget, which reaches 25% (Chadha, 2018). Many organizations have spent most of the budget on MC. Marketing communication activities through social media, such as YouTube, but without knowing the effect of attitudes arising on the consumer. The result of MC activities is purchasing. The measurement is easy using online analytics (Youtube, 2018). In several studies that examine the effectiveness of YMC through qualitative and quantitative of Generation Y. There are different results which state that Generation Y responds to the activities of the company through YouTube Marketing Communication. Cognitive attitude will be stimulated and the influence on purchase decisions on generation Y.

2.2. Entertainment

Entertainment media channels are defined as things that are of interest to the audience through a variety of existing media (Eighmey & McCord, 1998). Previous research gives a higher entertainment value, and this causes users to be encouraged to watch more often. Entertainment can also appear through advertisements that arise, and this makes the user feel comfortable and enjoy the show (W.-N. Lee & Choi, 2005). Advertising is usually used to actualize the hedonic needs of consumers (Rodgers & Thorson, 2000). So marketers need to develop pleasure and enjoyment in advertisements that delight the audience (Pollay & Mittal, 1993). The popular social media used in advertising today can entertain the audience and increase the fun and pleasure in watching advertisements (Fischer & Reuber, 2011). The entertainment values that support advertising can drain the emotional level of the audience, so this can be a positive message for marketers to continue and develop their creative campaigns (Muntinga et al., 2011). Social media users can exchange information, share photos and videos, and establish social relationships (Y. Kim et al., 2011). Through the YouTube channel, marketers can purchase premium ads, obtain more targeted audiences, and slip their products into a well-known YouTube content to allow natural companies to improve their marketing programs. As such, the placement of a product is the most common form of entertainment in marketing communication, which paves the way and makes a new avenue to get more consumers’ attention (Kotler & Keller, 2016).

2.3. Informativeness

Information can be defined as the extent to which useful information is provided to users Ducoffe (1995) states that the user distinguishes media advertising capabilities to offer consumer information with the various fundamental reasons to accept the ad itself. Ducoffe (1995) defines informativeness as the ability of an ad to inform consumers about some of the alternative products. Then this could lead to a satisfactory purchase decision. Erdem et al. (2006)found that consumers show that they are more looking for product information, and get more information through the exchange of data with the community and their relatives (De Mooij & Hofstede, 2010). The principle is reinforced by previous studies showing the importance of information in response to ads through various social media. Thus, social media is an excellent medium for marketing communication because of its format that can display more detailed product information (W.-N. Lee & Choi, 2005).

2.4. Irritation

Irritation can be described as a mess and annoying content size for surfers (Eighmey & McCord, 1998). Previous studies have shown that people are resistant to TV advertising, so they avoid commercials and take the time to engage in such events, online advertisements such as banner ads and pop-up ads are often viewed as irritating (Edwards et al., 2002). People avoid online advertising because of the irritating aspects of internet advertising (Cho & Cheon, 2004). Ducoffe (1995) states that annoying banner ads can divert consumers’ attention and experience. Consumers recognize advertisements as annoying and unwanted penetration (Edwards et al., 2002). Regarding social media like YouTube, the irritation associated with advertising can be identified as a nuisance and a concern for consumers to lose their privacy (Corstjens & Umblijs, 2012).

2.5. Customization

Customers are more adaptable to advertising today, computers in Human Behavior are personalized and relevant to their lifestyle. Therefore, advertisers need to follow customer needs, profiles, and consumption patterns (Rao & Minakakis, 2003). Ducoffe (1995) Believes that advertising works efficiently when advertising messages are shared between customers and marketers. Others, customers should pay attention to specific ads that are more customized but avoid ads that are considered less adaptable (Liu et al., 2012). Social media, with the advantage of customization, can change the way advertising, which has provided profiles and tracks customer activity based on location and demographics for each user (Zeng et al., 2009). YouTube, as one of the millennials, the most active channels among other social media, has a potential platform for carrying out companies’ missions by distributing and producing video content based on their individual needs and user preferences.

2.6. Brand awareness

Brands can effectively enhance strong relationships with customers (Tsimonis & Dimitriadis, 2014). Brand awareness is described as brand recognition or memory (Huang & Sarigöllü, 2012). Nowadays, new media not only strengthens customer-to-company relationships and existing company-to-customer but also presents the formation of a new trance in conventional options, increasing the company’s ability to interact with customer dialogue and thereby strengthening their communication tools (Tsimonis & Dimitriadis, 2014). Social media can build and increase brand awareness (Stephen & Toubia, 2010). Because a large majority of individuals have used social media, brand names scattered across the network will help educate and spread people across the network, increasing brand recognition.

2.7. Purchase intention

Previous research has shown that buying intention is the essential indicator of advertising effectiveness and can be influenced by indicators such as attitudes towards advertising (SI Wu, 2006). For example, MacKenzie et al. (1986) found that attitudes toward advertising affect brand awareness and purchase intention. What is more, Zeng et al. (2009) have identified that the value of advertising is positively related to behavioral intentions in the social media environment. More specifically, other studies recognize the value of advertising as leading to purchase intentions in social media advertising (Y. Kim et al., 2011). The purchase intention investigated is highly dependent on the recommendations and brand values shared by other consumers on social media channels (Dehghani & Tumer, 2015).

3. Conceptual model and hypothesis

In this section, we present our hypotheses and conceptual models based on previous discussions about the literature review regarding consumer attention on YouTube advertisements and relevant additions. Issues related to our variables that measure advertising effectiveness, such as through brand awareness (Dehghani et al., 2016), brand value and purchase intention, where consumers form perceptions about the physical characteristics of a brand from various sources of information about advertising (Pikas & Sorrentino, 2014). These attributes contribute to the meaning or value given by the brand to consumers, such as brand awareness (Rao & Minakakis, 2003).

Empirically, Ducoffe (1995) researched aspects of irritation on the value of advertising that had a negative impact on attitudes towards advertising. Additionally, in a separate study, Rao and Minakakis (2003) reported that there was a negative relationship between irritation and advertising value and a positive correlation between informativeness and advertising value. Accordingly influences attitudes towards advertising. Previous studies have also shown that advertising values are related to three factors: informativeness, entertainment, and irritation, which in turn affect attitudes towards advertising (Waters et al., 2011). However, entertainment and informativeness are measured from the positive aspects of social media advertising, each representing an affective value and cognitive value (W.-N. Lee & Choi, 2005). On the other hand, another study revealed that the value of advertising had nothing to do with irritation, but reflected the adverse reactions of consumers to incomplete shipping.

3.1. Relationship between Youtube ads and brand awareness

Based on previous studies, customized advertisements can increase information, fun, and credibility. However, customized advertisements can also reduce disruption because advertising messages are well personalized to handle customer interests and preferences. According to (S. Lee et al., 2015), personalization does not show a direct influence on the value of advertising. However, it has an indirect effect through informality, credibility, and entertainment. Consumer brand awareness formed by advertising influences purchase intentions through social media channels (Dehghani & Tumer, 2015). According to previous researches, the brand image produces positive results in increasing product awareness, organizational image, as well as survival, profitability, and growth, especially in larger organizational brands (Foroudi, 2019; Wen, 2013). According to Prentice and Loureiro (2018), the brand image creates experiences for customers and emotional responses to purchases of certain brands. Brand image plays an important role in improving product identification and consumer purchase intentions for a particular product or service (Coelho et al., 2018). Then this will increase the value of the product or service in the customer’s mind. Through brand image, customers capture certain messages about a product, which might influence their attitudes and ultimately make decisions, which affects their buying behavior (Buil et al., 2013). Through integrated advertising, companies can remind customers of every new development or improvement of a product to attract customers to remain loyal to the product or service (Chaab & Rasti-Barzoki, 2016). Therefore, advertising enhances the customer’s repeat buying behavior towards the chosen product. Based on the above, the following hypothesis is developed:

H1: YouTube Ads has a positive effect on brand awareness

3.2. Relationship between Youtube ads and brand image

Previous studies have found that repetition in advertisements affects the minds of customers, which also helps them remember things about the product and make repeated purchases. According to a survey conducted Sunderaraj & Loheswari, (2015), this market is very competitive, and especially for consumers, are considered the market. Marketers focus on various factors to attract more customers. Based on conclusions and opinions from the experts, the effect of positive advertising on brand image and in this study produced the following hypothesis:

H2: YouTube Ads has a positive effect on brand image

3.3. Relationship between Youtube ads and purchase intention

Advertising value is the customer’s rating of an advertisement (Ducoffe, 1995). Purchase intention from consumers increases when consumers show a positive attitude towards a product or service (MacKenzie et al., 1986). Thus, customers who watch an advertisement positively are likely to give a positive response to the product or service advertised (Y. J. Kim & Han, 2014). Advertising value has a positive effect on customer purchase intentions for a product or service, similar to research conducted by several other researchers who provide a statement that there is a positive relationship between advertising value and purchase intention (Tsang et al., 2004). Value advertising is a measure of advertising effectiveness, which is defined as “a subjective evaluation of the relative value or utility of advertising to consumers” (Ducoffe, 1995). Perceived to contribute to the value of advertising to the growth of experience flow because consumers focus entirely on the message received, eliminating irrelevant thoughts (Hoffman & Novak, 1996). Consumers evaluate messages received as feasible if they fit their needs or include valuable information for purchases. Previous research studies the relationship between advertising attitudes and purchase intentions (Tsang et al., 2004). However, there have been several studies investigating the relationship between advertising value and purchase intentions. Consumers show favorable attitudes to products or services when purchase intentions increase (Ko et al., 2005). To confirm this process, Kim, Kim and Park (2010) conduct empirical tests and determine that consumers “attitudes toward advertising positively influence purchase intentions. Overall, this forms a total utility that is likely to attract consumers” attention to social media advertisements such as YouTube channels. Therefore, we consider the following hypothesis for our empirical research:

H3: YouTube Ads has a positive effect on purchase intention

3.4. Relationship between brand awareness and purchase intention

Brand awareness may have a strong positive influence on customer purchase intentions because customers tend to assign a high quality to products that meet their brand (Esch et al., 2012; De Waal Malefyt, 2015). In fact, according to Kotler and Keller (2016), branded products have no market value unless there is a market category of people who are brand aware, recognize their elements, and are willing to spend money to have them. It means that not all products are advertised branded to accept customers “awareness, credibility, and value or will guarantee consumer purchase intentions (Kakkos et al., 2015). As mentioned earlier, brand advertising can help customers” intentions to buy products or services for the first time, which can further determine continuous or interrupted use—disconnect from the product by the customer depends on customer satisfaction benefits from the product (Rubio et al., 2014). Continuously repeated purchases and use of the product by the customer can greatly increase product awareness and customer loyalty, thereby creating a competitive advantage (Suki et al., 2016). Based on the previous argument, customers who get favorable satisfaction from p products may gradually develop greater willingness to buy products and, later, actively seek out the products in a store (Hung et al., 2016; De Medeiros et al., 2016). With this, the level of product awareness can increase in large part as customers begin to spread positive word-of-mouth praise about the product, which in turn can result in customers’ willingness to pay more for products (Keuschnigg, 2015). Indeed, brand awareness increases perceived quality, advertised brand value, and customer purchasing decisions. Based on the above, the following hypothesis is developed:

H4: Brand awareness has a positive effect on purchase intention

3.5. Relationship between brand image and purchase intention

Verdilla & Albari’s research (2018) shows that, along with its development, brand image can also be defined as the perception of a brand that is reflected by brand associations that contain meaning in consumer memory. Khan et al. in Verdilla and Albari (2018) recognize that it is essential to form an image positive on a brand because it is expected that a positive image that is owned in the minds of consumers will appear a positive attitude towards the existence of the brand. It is believed that a well-known brand image will be unique in the market (Aaker, 2014; Febriyantoro, 2016). Besides, consumers use a strong brand image to develop their interest in buying the brand (Kotler & Keller, 2016; Martha & Febriyantoro, 2019). Based on these descriptions, in This research can be formulated as follows:

H5: Brand image has a positive effect on purchase intention

Figure 1. Research model.

4. Research methodology

Based on Figure 1, the research model examines the relationship between Youtube Marketing Communication, brand awareness, bramd image and purchase intention. This model was compiled from previous research. This research is a type of survey research that uses a questionnaire in data collection. The data is related to YouTube Market Communication, Brand Awareness, Brand Image, and Purchase Intention. The method used is quantitative. Quantitative methods are used in research to test populations or specific samples. The data collection used is a research instrument, as well as quantitative data analysis, which intends to test a predetermined hypothesis. To get this data, researchers distributed questionnaires to YouTube users aged between 18–35 years who were millennials. The research location is in the City of Batam in Indonesia, the location of this study was determined because Batam has a population of various regions in Indonesia and Batam is an Industrial City and a center for technological development in Indonesia. This study uses a non-probability sampling technique with a purposive sampling method in which sample units are selected based on specific criteria to get a sample with the desired characteristics.

Analysis of the data in this study is quantitative to test the hypotheses that have been set. A data analysis technique used by researchers is to use the SEM (Structural Equation Model) SmartPLS analysis technique version 3.0. According to Hair et al. (2014), stated PLS-SEM is still able to handle reflective and formative actions without identification problems. Two models must be analyzed in PLS, namely, Assessing the outer model or measurement model and evaluating the inner model or structural model. Hypothesis testing uses the full model analysis of Structural Equation Modelling (SEM) with SmartPLS. In the full Structural Equation Modelling model, besides confirming the theory, it also explains the presence or absence of relationships between latent variables.

5. Results and discussion

The number of samples collected in this study was 101 respondents based on gender. There was 66.7 percent consisting of women and 33.7 percent consisting of men. According to the age of the respondents were dominated by respondents with an age range of 18–25 years with 90.9 percent, the next 6.1 percent of the age range 26–30, and the remaining 3 percent from the age of 35 years and over. Furthermore, based on the frequency of watching on a day, 39.4 percent watched YouTube more than five times a day. While respondents who viewed YouTube 3–5 times a day were 23.2 percent, followed by 21.2 percent watching YouTube only once a day and the remaining 16, 2 percent watch YouTube 2 times a day. Whereas based on the duration of the respondents’ willingness to view the advertisements in each YouTube content as many as 47.5 respondents only saw the ad for less than 5 seconds, 38.4 percent of respondents saw the advertisement for 5–10 seconds, and the remaining 14.1 percent of the respondents saw the ad on YouTube for more than 10 seconds. As for what advertisements they see. Based on the survey results, the styles of advertising displayed vary when YouTube shows, advertising based on users ‘ search preferences.

From these descriptive statistics, it can be seen that the millennial generation dominates users. Cohort theory notes that various parts of the population can be divided into different generation groups based on events that have taken place over a specified period. As a result, each group displays homogeneous values, attitudes, interests, lifestyle, needs, behavior, and consumption patterns because they are influenced by innovation and technological development; and experience, which occurred over a certain period (Moore, 2012). Therefore, cohort theories are essential for organizations and brands. They provide opportunities to adapt marketing communication strategies to attract consumers based on the characteristics, needs, and desires of the right consumer groups. The Millennial Generation was born between 1982 and 2002, which is of particular interest to organizations because it can increase purchasing power (Marshall & Leaney, 2013).

5.1. Outer model (Measurement model)

An outer model is a model that defines how each block of indicators relates to the latent variable. The outer model evaluation is conducted to check the model’s validity and reliability. The indicator used in this analysis is a reflective indicator for evaluating the external model by convergent and discriminant validity of indicators that form latent structures and composite reliability for indicator frames. Evaluation of convergent validity is carried out by measuring loading factors and Average Variance Extracted values (AVE). The loading factor value shows the correlation of the indicator score with its construct, where the value of good validity. The loading factor value is more than 0.7 for confirmatory research, and the loading factor value 0.6–0,7 for exploratory analysis. The recommended AVE value must be greater than 0.5, which means that 50% or more the variance of the indicator can be explained. Evaluation of discriminant validity is assessed by comparing the square root of the average variance extracted for each construct with the correlation of constructs with other constructs in the model. The model has sufficient discriminant validity if the roots of AVE for each construct is higher than the correlation construct and the other constructs. Reliability testing is done by looking at the value of composite reliability. Reliability is considered acceptable if the value of composite reliability of confirmatory research is more significant than 0.7, and the value 0.6–0.7 is still appropriate for exploratory analysis.

Based on Table 1, the processed data using SmartPLS software, it can be seen in the table that this model meets the criteria of the outer model. Then it can be seen from the outer test of this model that this model has good validity and reliability.

In this research model, YouTube Ads (YA) is reflected by the leading indicators, namely the ability to display entertaining content (YA1), the ability to convey information (YA2), the ability to deliver targeted advertisements (YA3), and the ability to increase trust in a product (YA4), from the overall results of the four indicators, the ability of an advertisement to increase trust in a product has the most significant loading factor with 0.852.

Brand Awareness (BA) is reflected by three leading indicators, among others, awareness of a brand (BA1). The ability to recognize a brand (BA2), the ability of consumers to understand every detail of a brand (BA3), the results of loading factors can be seen that awareness of a brand has the highest value with 0.866.

Next to the Brand Image (BI) is explained by three leading indicators that have characteristics. That can strengthen the brand image (BI1), the brand is known to have a good reputation in the community (BI2), brand reputation in an industrial sector (BI3). From the results of loading factors, it can be seen that the highest value of the brand image variable indicator is the reputation of a brand in its industrial sector.

Three leading indicators reflect the Purchase Intention variable consideration in buying a product (PI1), intention to buy a product shortly (PI2), and the possibility of purchasing a product when getting a promotional offer (PI3). From the result of the loading factor, the option of buying when getting a quote, The discount has the most significant value with 0.898.

Figure 2. PLS algorithm.

After conducting the outer model test which can be seen in figure 2, the inner model test is done. Evaluation of the inner model is an analysis that describes the relationship between variables, whether there is a positive or negative influence. In the inner model, testing is carried out on two criteria, namely: R of the endogenous latent variable and estimation of the path coefficient (Hair et al., 2014).

5.2. Inner model (Structural model)

Observations R-square of endogenous latent variables is done to see how much variability the variability of an exogenous construct can explain endogenous constructs. After evaluating the R square, the evaluation of the model is then done by testing the path coefficient estimation to determine the effect between variables through the bootstrapping technique. In that test, a variable is said to affect other variables if the t-statistic is higher than the t-table at 5% alpha. In other words, the variable is influential if it has a t-statistic value exceeding 1.96.

In this analysis, the value of R square on the relationship of YouTube ads to Brand Awareness is 0.327. It can be interpreted as implying that YouTube Ads as an exogenous variable can only explain the relation to Brand Awareness as an endogenous variable of 32.7 percent. While the remaining 67.3 percent is determined by other variables outside the variables studied.

Next YouTube Ads on Brand Image is only able to explain 23.8 percent, and the rest is influenced by variables that are not examined in this study. YouTube Ads, Brand Image, and Brand Awareness simultaneously affect Purchase Intention of 56.1 percent. The remaining 43.9 percent is influenced by other variables not examined in this study.

Based on table 2, the structural model results of processing using SmartPLS indicate that Brand Awareness has no significant effect on Purchase Intention. It can be seen from the value of the path coefficient 0.113 and the t-statistic value 0.242 and p-value 0.242 (t-value <1.96 and p-value> 0.05). As for Brand Image and Brand Awareness, it has no significant effect, and this can be seen from the value of the path coefficient of 0.097, the t-statistic value of 1.139 or less than 1.96, while for the p-value of 0, 255 or more than 0.05. Then it can be concluded that the Brand Awareness and Brand Image variables are not mediating variables from YouTube Ads and Purchase Intention. YouTube Ads has a significant effect on Brand Awareness. This result can be seen from the value of the path coefficient of 0.572. It can be interpreted that when an increase in the use of YouTube Ads will increase Brand Awareness by 57.2 percent, while for the t-statistic value of 7.399 or more from 1.96. YouTube Ads has a significant effect on Brand Image, and this result refers to the path coefficient value of 0.488 and a t-statistic value of 5.485 or higher than 1.96. While YouTube Ads directly has a significant influence on Purchase Intention, judging by the value of the path coefficient of 0.732, this can be interpreted as every application of the YouTube Ads. YouTube Marketing Communication strategy can increase the purchase intention of the audience on YouTube by 73.2 percent, in addition to the t-statistic value of 12,68, which is higher than 1.96.

Figure 3. Inner model.

Based on figure 3, this research shows that all four factors in YouTube Ads consisting of Entertainment, Customization, Information, and Irritation. All factor effects on advertising are playing an essential role in helping to increase brand awareness and brand image. Research from Dehghani et al. (2016) shows that the role of YouTube Ads in increasing brand awareness of YouTube users. This study revealed that all four factors (Entertainment, Customization, Information, Irritation) the value of advertising play an important role in helping customers by increasing brand awareness when accepting YouTube ads and then shaping purchase intention. The results show it perceived entertainment and ad customization are positive drivers the strongest value of advertising while irritants are negative drivers, which supports previous research (Aaker & Bruzzone, 1985; Lee & Choi, 2005). Users feel entertained and get relevant information following what they need. YouTube Ads is also able to increase the purchase intentions of consumers. Research conducted by Dehghani et al. (2016), where consumers will be interested in buying a product when they find a similarity of information on the product. This was stated through MacKenzie et al. (1986) where they stated that consumers’ purchase intention increased when consumers showed a positive attitude towards a product or service.

Consumers will get an entertainment treat, ad customization, but the irritation of an advertisement becomes a negative thing. This study is supported by previous research (W.-N. Lee & Choi, 2005), which states the same thing. That advertising can have a positive or negative impact on viewers and companies because each audience has a different understanding of advertising.

In a rapidly evolving technological environment, customization plays an essential role in increasing the value of advertising. Previous research from J. U. Kim et al. (2010) states that customization has an indirect effect through informativeness, entertainment, and the credibility of an advertisement. Liu et al., (2012) discusses the importance of advertising on social media by looking at its effect on attitudes towards advertising. Previous studies have not shown a relationship between advertising value variables and brand awareness and purchase intention. Therefore, this study is complementary to the current literature.

From the managerial side, this research is a crucial suggestion for companies in investing in marketing budgets on YouTube Ads. The company uses YouTube Ads as part of a promotional strategy that provides entertainment for consumers, especially in the early seconds of the ad. From the findings of research that has been done, the majority of people skip 47.5 percent of advertisements just waiting for ad impressions for 5 seconds. Therefore, companies need to display creative and professional advertisements, so that viewers who see the ads feel interested to see these ads and decide to visit the site and understand the product. YouTube provides ad customization so that only ads that match the interests of the audience appear in advertisements on YouTube. Customization has a positive impact on the company to maximize its advertising content. Not all viewers like the ad because some ads are considered annoying by viewers. Companies need to be observant in planning ads that will be displayed on YouTube ads. Advertising on YouTube will further increase brand awareness and brand image for the company, and it is necessary to pay attention to companies in preparing advertising plans on YouTube.

6. Conclusion

Based on the results of hypothesis testing. It can be concluded that YouTube Advertising influences Brand Awareness and Brand Image, whereas Brand Awareness and Brand Image does not affect Purchase Intention. YouTube ads are directly related to the purchase intention. So from this result, brand awareness and brand image are not mediating variables because they are not related to the purchase intention. From these results, it can be seen that the role of YouTube Ads in increasing brand awareness and attract corporate brand image. YouTube can increase the purchase intentions of YouTube users. Companies need a budget for effective advertising on YouTube by creating creative ads that can attract attention from YouTube users. The majority of YouTube users ignore the ads that appear. Therefore, companies need to create unique ads so that those users can use them.

7. Limitation and scope for further research

This study shows that the brand awareness and brand image variables are not mediating variables on YouTube ads and purchase intentions, this proves that the ads on YouTube make consumers want to buy a product from the brand. In contrast, the YouTube ads variable has a significant effect on brand awareness, and this indicates that the ads that appear on YouTube make the viewer able to identify a brand well, as well as the relationship between YouTube ads with the brand image, in this study shows that YouTube ads can improve the brand image of a brand and create a good reputation on a brand. The limitation of this research is that there are still few studies that discuss YouTube ads in-depth. The research variables are only limited to YouTube ads, brand awareness, brand image, and purchase intention. This research is only conducted in Batam City, so it needs extensive research, so the results of this study will be different in other regions and countries.

For further research is expected to add variables, especially brand equity and brand advocacy in YouTube advertisements, and the scope of this research needs to be broadened so that they can be a picture for business people in adopting this theory for their business.

Additional information

Funding

The author received no direct funding for this research.

Notes on contributors

Mohamad Trio Febriyantoro

Mohamad Trio Febriyantoro is an alumnus of Ciputra University and Indonesian European University Surabaya. Currently, the author continues the doctoral program at Universiti Tun Husein Onn Malaysia (UTHM). He is also lecturer at the Management Study Program at the Universal University of Batam. The focus of the research of the author is Marketing Management and Entrepreneurship. The government also funded some of the research through a Research grant. The author has also written several books that have been circulating throughout Indonesia.