The Empirical Definition of the Function of Advertising Costs in E-Commerce

Abstract

In the publication, an empirical study of the advertising costs in the e-commerce market is carried out. In order to determine the type of functional dependency of advertising costs, dynamics of advertising costs in the e-commerce markets of the US, the world, and Ukraine were researched, followed by an approximation of the series of statistical data on the Internet advertising costs. There is a functional dependency on the Internet advertising costs in the form of a power function with two coefficients that relate to the level of consumer awareness of goods and services in the e-commerce market and the level of saturation of the e-commerce market for advertising investments. The use of the power function of advertising costs has allowed to theoretical definition and statistical confirmation of existence of the effect of saturation of the developed e-commerce markets with advertising, where the growth of investment volumes in the Internet advertising begin with an increase, then peak and start to decline. The optimal level of advertising costs is determined by the condition of the full consumer awareness and the maximum saturation of the e-commerce market with advertising.

Keywords

• e-commerce
• advertising costs
• saturation effect