How do digital natives perceive and react toward online advertising? Implications for SMEs

Advertising was once touted as a ‘big boys’ marketing tool, but the advent of the Internet has led to the emergence of online advertising, which has benefitted marketing organizations of all sizes, especially small and medium enterprises (SMEs), for 20 years since the new millennium. However, the emergence and proliferation of digital natives as a new generation of consumers necessitate further research to ensure the continued attractiveness, effectiveness, and relevance of online advertising. Furthermore, there is a need to consolidate the multifaceted nature of technology and media in online advertising and the corresponding behavior enacted by consumers, particularly digital natives, today. In this regard, this paper endeavors to examine the perceptions and reactions of digital natives toward online advertising using the theory of planned behavior, technology acceptance model, and uses and gratifications theory as an integrated theoretical lens to guide this examination. Using covariance structural equation modeling on a sample of 380 digital natives, this paper finds that the ease of use, usefulness, entertainment gratification, credibility, design, and personalization of online advertisement positively influence the attitude of digital natives toward online advertisement. However, assurance from online advertisement did not produce any significant effect, a unique finding that exemplifies the confidence that digital natives exhibit in digital environments as a self-assured generation. Finally, this paper finds that the attitude and subjective norms among digital natives toward online advertisement and the security and responsiveness of the website of the online advertised product positively influence the intention of digital natives to purchase the online advertised product. The implications of these findings for theory and practice as well as its limitations and future research directions conclude the paper.