Internet Advertising Redefines the Performance of Companies

Abstract

Today’s Internet is the most robust modifier in social and economic relations. The opportunities that companies find dramatically changed communication ways and mechanisms. E-commerce development also influences trade because of more intensive competition, which is more often in digital form. Internet advertising plays a special part in this process. The influence of Internet advertising is multidimensional. In the research, we test certain assumptions that will provide us with a clearer idea of consistent relations between Internet advertising and companies’ performance. As illustrated by the sample of Russian companies, we analyse advertising as a sector and identify mainstream trends. In the research, we applied methods of statistical, comparative, and correlationregression analyses to test hypotheses. Findings make it possible for us to conclude that companies’ revenue growth rates do not depend on growth rates of Internet advertising budgets and proportions of Internet advertising to overall advertising budgets. Revenue growth rates for most companies under examination almost do not depend on growth rates of Internet advertising. There is a weak correlation between Internet advertising dynamics and return on sales (ROS). Having applied the multiple regression model, we proved that companies’ revenue is not always highly dependent on usages of Internet advertising. This study has identified the adjacent effect in terms of website visibility. The study has confirmed that the hypothesis on the relationship between companies’ website traffic and growth in Internet advertising budgets. The patterns highlighted might be helpful in the development of corporate Internet marketing.