Enough Internet startups have failed that they (or at least the venture capitalists) have finally come to recognize that their business is no different from any other business, in that success depends on marketingunderstanding one's customers, and hence, using marketing research. Imagine that your first job after business school is as the main marketing person for the six-month old Internet Company by a friend of a friend.

This particular startup is a travel site that specializes in "extreme sports" (skiing off cliffs, riding mountain bikes from great heights into large air bags, as well as the more "traditional" bungee jumping and skydiving). The target audience is the current profile of users, that is, men in their 20s (though the percentages of women and older thrill seekers are growing). This group of customers is coincidentally also highly likely to be "wired"; thus, advertising on the Internet is expected to be effective at reaching this audience.

It is your responsibility as the Extreme Marketer to conduct tests to assess the effectiveness of your company's advertisement on the Internet. At the moment, you've created two variations of a banner ad inviting browsers to your Web site and you're trying to choose between the twowhich is most likely to attract these guys to click onto your Web site to learn more about your vacation packages and then possibly purchase one?

One of the ad banners your creative staff has developed is depicted in vivid colors, with captivating graphics that attempt to illustrate the possible thrills, for example a photo with a view of skiers at the top of a mountain shot from their delivery helicopter, or a photo of a skydiver in mid-air taken by a skydiving photographer. This ad format offers very little by way of informative content, such as details about the logistics of the trips, locations, lengths of stay, price and so on. This ad is analogous to what is traditionally called the "beauty" shot in advertising production (a televised or still photo shot that shows the car or the jar of peanut butter without mentioning miles per gallon or caloric content). Thus, we call this version of the possible banner ad "beauty".

Another banner ad has been prepared that appears somewhat less colorful and less pictorial in style, but which contains more detailed information about the extreme sports outings you are hoping to encourage the viewers to purchase. Given its greater information content we call this version of the banner as "info".

You could just run a little study at this point. You could purchase banner ad space on your usual business relationship. Web sites, randomly assign half of those sites your beauty ad, and half your info ad. Then you would sit back and count over some duration (such as the next two weeks) the number of click-through you achieved with the one as format versus the other, and conclude that the banner ad with the greater draw should be the one with which your firm proceeds.

However, you have done your homework and are aware of some secondary data from eye-tracking studies. These studies insert small cameras into PC screens that monitor where the PC user is looking. The results suggest that placing the banner ad on some locations on the screen may be more effective than others. For example, one theory is that the brain processes whatever is in 'the right of a person's visual field in the left half of the brain, and stimuli in the left part of a person's visual field is processed in the right-brain hemisphere. Research conducted by physiological psychologists suggests that the left brain processes analytical features and verbal descriptions most effectively, whereas the right brain processes pictures and holistic impressions better.

The info ad is verbal and offers many facts that readers could use to analyze and assess their interest, and the beauty ad is mostly graphics and leaves a holistic impression of the thrill-seeking vacation. Thus you're beginning to think that perhaps the info ad would be best understood and most persuasive if it were processed by a viewer's left brain, which would dictate placing it on the right side of a Web page. In contrast, the beauty ad might be better understood and more persuasive if it were processed by a viewer's right brain, which means placing the banner ad on the left side of the viewer's screen.

So now the Internet advertising study you've created is somewhat more complicated. There are two factors, rather than just one: the advertising type (beauty or info) and the banner placement (left or right). Your expectations are that the ad is most likely to be effective (measured for the moment by the number of click-through it achieves) if the beauty ad is placed to the left or the info ad is placed to the right. However, you create all possible combinations because, after all, your hypothesis about "which ad should do better where" in fact just a hypothesis. Thus, although each Web traveler sees only one ad, there are four ad variations: beauty on the left, beauty on the right, info on the left and info on the right. You buy your ad space at your usual supplier Websites and you randomly assign one of the four ads to each of those locations. You determine how long you will wait (for example, two weeks) before counting the results.

Questions:

1. Discuss the different kind of research designs and what kind of design has been described above.

2. How might you improve upon what has been proposed?

3. What will be the null and alternative hypothesis that you propose to test for the design suggested in the case

4. What method(s) will you use to analyze the resulting data that you will obtain?

5. Discuss the different scaling techniques and in the above design discuss the measurement scales for the different variables.