Digital Advertising and Generation Z Online Spending in Indonesia’s Emerging Market: The Moderating Role of Advertising Relevance

Agung Wijoyo; Luh Nadi; Rodhiah

doi:10.61255/jeemba.v4i4.951

Authors

Agung Wijoyo Universitas Pamulang
Luh Nadi Universitas Pamulang
Rodhiah Universitas Tarumanagara

DOI:

https://doi.org/10.61255/jeemba.v4i4.951

Keywords:

Advertising Relevance, Digital Advertising Effectiveness, Emerging Market, Generation Z, Online Spending Behavior, PLS-SEM

Abstract

Purpose - The rapid expansion of Indonesia’s digital economy has intensified the strategic role of digital advertising in influencing consumer purchasing behavior, particularly among Generation Z consumers who actively engage with social media and e-commerce platforms. Although personalized and relevance-based advertising systems have become increasingly common, empirical evidence regarding how digital advertising effectiveness influences actual online spending behavior remains limited and inconsistent. This study therefore examines the effect of digital advertising effectiveness on Generation Z online spending behavior and investigates the moderating role of advertising relevance within Indonesia’s emerging digital market.

Design/methodology/approach-This study employed a quantitative explanatory approach using a cross-sectional survey design. Data were collected from 420 Generation Z consumers aged 18–27 years who actively participated in online shopping activities. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM) with SmartPLS 4. The conceptual framework was primarily grounded in the Stimulus–Organism–Response (SOR) framework and supported by complementary insights from the Technology Acceptance Model (TAM).

Finding/Results - The findings indicate that digital advertising effectiveness positively and significantly influences online spending behavior and emerged as the strongest predictor in the model (β = 0.364, p < 0.001). Advertising relevance also demonstrated a significant direct effect (β = 0.154, p < 0.001) and strengthened the relationship between digital advertising effectiveness and online spending behavior (β = 0.114, p = 0.003). Digital literacy additionally contributed positively to online spending behavior (β = 0.171, p < 0.001). The structural model explained 27.8% of the variance in online spending behavior (R² = 0.278), indicating modest but meaningful explanatory capability.

Originality/Value - This study contributes to digital advertising and consumer behavior literature by demonstrating that advertising relevance functions both as a direct behavioral driver and as a contextual enhancer of digital advertising effectiveness in shaping Generation Z online spending behavior within an emerging market context. The findings also highlight the importance of personalization, contextual suitability, and consumer-oriented advertising strategies for improving digital engagement and purchasing outcomes.

Abstract views: 64 ,

PDF downloads: 15

Downloads

Download data is not yet available.

References

Arghashi, V., & Yuksel, C. A. (2022). Interactivity, Inspiration, and Perceived Usefulness! How retailers’ AR-apps improve consumer engagement through flow. Journal of Retailing and Consumer Services, 64, 102756. https://doi.org/10.1016/j.jretconser.2021.102756

Badan Pusat Statistik. (2025). Statistik E-Commerce Indonesia 2025. Badan Pusat Statistik. https://www.bps.go.id

Benitez, J., Henseler, J., Castillo, A., & Schuberth, F. (2020). How to perform and report an impactful analysis using partial least squares: Guidelines for confirmatory and explanatory IS research. Information & Management, 57(2), 103168. https://doi.org/10.1016/j.im.2019.05.003

Bilgin, Y. (2022). The effect of social media marketing activities on brand awareness, brand image and brand loyalty. Business and Management Studies: An International Journal, 10(1), 128–146. https://doi.org/10.15295/bmij.v10i1.1980

Castillo, A., Rescalvo-Martin, E., & Karatepe, O. M. (2026). How is common method bias addressed using partial least squares structural equation modeling in hospitality and tourism research? Tourism Review, 81(1), 204–228. https://doi.org/10.1108/TR-07-2025-0762

Chandra, S., Verma, S., Lim, W. M., Kumar, S., & Donthu, N. (2022). Personalization in personalized marketing: Trends and ways forward. Psychology & Marketing, 39(8), 1529–1562. https://doi.org/10.1002/mar.21670

Davis, F. D. (1989). Perceived usefulness, perceived ease of use, and user acceptance of information technology. MIS Quarterly, 13(3), 319–340. https://doi.org/10.2307/249008

Dehghani, M., Kim, K. J., & Dangelico, R. M. (2021). Effects of advertising relevance and personalization on consumer engagement in digital media. Journal of Business Research, 132, 667–678. https://doi.org/10.1016/j.jbusres.2020.09.058

Djafarova, E., & Bowes, T. (2021). Instagram made me buy it: Generation Z impulse purchases in fashion industry. Journal of Retailing and Consumer Services, 59, 102345. https://doi.org/10.1016/j.jretconser.2020.102345

Dwivedi, Y. K., Ismagilova, E., Hughes, D. L., Carlson, J., Filieri, R., Jacobson, J., Jain, V., Karjaluoto, H., Kefi, H., Krishen, A. S., Kumar, V., Rahman, M. M., Raman, R., Rauschnabel, P. A., Rowley, J., Salo, J., Tran, G. A., & Wang, Y. (2021). Setting the future of digital and social media marketing research: Perspectives and research propositions. International Journal of Information Management, 59, 102168. https://doi.org/10.1016/j.ijinfomgt.2020.102168

Fatima, T., & Khan, I. (2022). The impact of digital marketing on consumer buying behavior through social media platforms. Journal of Public Affairs, 22(3), e2671. https://doi.org/10.1002/pa.2671

Francis, T., & Hoefel, F. (2020). True Gen: Generation Z and its implications for companies. McKinsey & Company. https://www.mckinsey.com

Godey, B., Manthiou, A., Pederzoli, D., & Rokka, J. (2022). Social media marketing efforts of luxury brands: Influence on brand equity and consumer behavior. Journal of Business Research, 139, 994–1006. https://doi.org/10.1016/j.jbusres.2021.10.022

Hair, J. F., Sarstedt, M., & Ringle, C. M. (2022). PLS-SEM: Indeed a silver bullet – Retrospective observations and recent advances. Journal of Marketing Theory and Practice, 31(3), 261–275. https://doi.org/10.1080/10696679.2022.2056488

Hsu, C.-L., & Chen, M.-C. (2021). How social commerce influences customer decisions: The mediating role of social support and relationship quality. Journal of Retailing and Consumer Services, 59, 102328. https://doi.org/10.1016/j.jretconser.2020.102328

Huang, M.-H., & Rust, R. T. (2021). A strategic framework for artificial intelligence in marketing. Journal of the Academy of Marketing Science, 49(1), 30–50. https://doi.org/10.1007/s11747-020-00749-9

Islam, J. U., Rahman, Z., & Hollebeek, L. D. (2021). Consumer engagement in online brand communities: A solicitation of congruity theory. Internet Research, 31(2), 580–603. https://doi.org/10.1108/INTR-09-2019-0373

Jamil, K., Dunnan, L., Gul, R. F., Shehzad, M. U., Gillani, S. H. M., & Awan, F. H. (2022). Role of Social Media Marketing Activities in Influencing Customer Intentions: A Perspective of a New Emerging Era. Frontiers in Psychology, 12, 808525. https://doi.org/10.3389/fpsyg.2021.808525

Kim, D. Y., Kim, H. Y., & Lennon, S. J. (2021). E-service characteristics, consumer trust, and purchase intention in online retailing. Journal of Research in Interactive Marketing, 15(2), 255–275. https://doi.org/10.1108/JRIM-02-2020-0030

Kim, J., & Han, K. (2021). The role of utilitarian and hedonic values on users’ continued usage intention in a mobile commerce environment. Sustainability, 13(8), 4384. https://doi.org/10.3390/su13084384

Kim, J., & Jeong, H. J. (2023). It’s my virtual space: The effect of personalized advertising within social media. International Journal of Advertising, 42(8), 1267–1294. https://doi.org/10.1080/02650487.2023.2274243

Koay, K. Y., Cheah, C. W., & Lom, H. S. (2022). An integrated model of consumers’ intention to use personalized advertising in social media. Journal of Retailing and Consumer Services, 64, 102755. https://doi.org/10.1016/j.jretconser.2021.102755

Kusumasondjaja, S., & Tjiptono, F. (2023). Exploring the role of social media marketing and online consumer engagement in Indonesia’s digital marketplace. Heliyon, 9(4), e14904. https://doi.org/10.1016/j.heliyon.2023.e14904

Lee, J., & Kim, S. (2022). The effect of personalized recommendation systems on consumers’ online shopping experiences. Electronic Commerce Research and Applications, 52, 101117. https://doi.org/10.1016/j.elerap.2022.101117

Lim, W. M., Rasul, T., Kumar, S., & Ala, M. (2022). Past, present, and future of customer engagement. Journal of Business Research, 140, 439–458. https://doi.org/10.1016/j.jbusres.2021.11.014

Lim, X. J., Cheah, J. H., Ng, S. I., & Ting, H. (2022). What drives online purchase intention in social commerce? The role of social media influencers, trust, and perceived value. Journal of Retailing and Consumer Services, 65, 102873. https://doi.org/10.1016/j.jretconser.2021.102873

Lima, W. M., Gupta, S., Aggarwal, A., Paule, J., & Sadhna, P. (2024). How do digital natives perceive and react toward online advertising? Implications for SMEs. Journal of Strategic Marketing, 32(8), 1071–1105. https://doi.org/10.1080/0965254X.2021.1941204

Lin, X., & Wang, X. (2022). Towards a model of social commerce: Improving the effectiveness of e-commerce through leveraging social media tools based on consumers’ dual roles. European Journal of Information Systems, 32(5), 782–799. https://doi.org/10.1080/0960085X.2022.2057363

Liu, J., Wang, C., Zhang, T., & Qiao, H. (2023). Delineating the Effects of Social Media Marketing Activities on Generation Z Travel Behaviors. Journal of Travel Research. https://doi.org/10.1177/00472875221106394

Lou, C., & Xie, Q. (2021a). Something social, something entertaining? How digital advertising disclosure and message appeal influence consumer responses to social media advertising. Journal of Interactive Advertising, 21(1), 58–73. https://doi.org/10.1080/15252019.2020.1852632

Lou, C., & Xie, Q. (2021b). Something social, something entertaining? How digital content marketing augments consumer experience and brand loyalty. International Journal of Advertising, 40(3), 376–402. https://doi.org/10.1080/02650487.2020.1788311

Lütjens, H., Eisenbeiss, M., Fiedler, M., & Bijmolt, T. (2022). Determinants of consumers’ attitudes towards digital advertising – A meta-analytic comparison across time and touchpoints. Journal of Business Research, 153, 445–466. https://doi.org/10.1016/j.jbusres.2022.07.039

Mehrabian, A., & Russell, J. A. (1974). An Approach to Environmental Psychology. MIT Press.

Molinillo, S., Aguilar-Illescas, R., Anaya-Sánchez, R., & Liébana-Cabanillas, F. (2021). Social commerce website design, perceived value and loyalty behavior intentions: The moderating roles of gender, age and frequency of use. Journal of Retailing and Consumer Services, 63, 102404. https://doi.org/10.1016/j.jretconser.2020.102404

Nuryakin, N., Aryanto, V. D. W., & Setiawan, M. B. (2022). Mediating effect of value creation in the relationship between relational capabilities on business performance. Cogent Business and Management, 9(1), 2034234. https://doi.org/10.1080/23311975.2022.2034234

Organisation for Economic Co-operation and Development. (2023). OECD Digital Economy Outlook 2023. OECD Publishing. https://doi.org/10.1787/bb167041-en

Qadri, U. A., Ahmed Moustafa, A. M., & Waqas, M. (2026). When and how AI personalization drives sustainable purchases: The roles of relevance, privacy, and transparency in eco-friendly advertising. Journal of Retailing and Consumer Services, 89, 104592. https://doi.org/10.1016/j.jretconser.2025.104592

Rahman, M. A., Nurhayati-Wolff, H., & Kurniawan, R. (2022). Generation Z consumer behavior toward digital commerce in Indonesia. Sustainability, 14(18), 11245. https://doi.org/10.3390/su141811245

Rahman, M. S., Mannan, M., Hossain, M. A., & Zaman, M. H. (2022). The adoption of e-commerce platforms and consumer purchase behavior in emerging economies. Sustainability, 14(7), 4245. https://doi.org/10.3390/su14074245

Sağkaya Güngör, A., & Ozansoy Çadırcı, T. O. (2022). Understanding digital consumer: A review, synthesis, and future research agenda. International Journal of Consumer Studies, 46, 1829–1858. https://doi.org/10.1111/ijcs.12809

Sanny, L., Arina, A. N., Maulidya, R. T., & Pertiwi, R. P. (2023). Purchase intention on Indonesian e-commerce platforms: The moderating role of social media engagement among Generation Z consumers. Cogent Business & Management, 10(1), 2167298. https://doi.org/10.1080/23311975.2022.2167298

Sarstedt, M., Hair, J. F., Cheah, J.-H., Becker, J.-M., & Ringle, C. M. (2021). How to specify, estimate, and validate higher-order constructs in PLS-SEM. Australasian Marketing Journal, 27(3), 197–211. https://doi.org/10.1016/j.ausmj.2019.05.003

Saura, J. R., Palos-Sanchez, P., & Rodriguez-Herraez, P. (2021). Digital marketing strategies and online consumer behavior in the digital era. Journal of Theoretical and Applied Electronic Commerce Research, 16(6), 1610–1625. https://doi.org/10.3390/jtaer16060090

Shareef, M. A., Dwivedi, Y. K., Kumar, V., & Kumar, U. (2021). Content design of advertisement for consumer exposure: Mobile marketing through social media. International Journal of Information Management, 61, 102294. https://doi.org/10.1016/j.ijinfomgt.2020.102294

Tandon, A., Dhir, A., Kaur, P., Kushwah, S., & Salo, J. (2021). Behavioral reasoning perspectives on organic food purchase. Appetite, 154, 104786. https://doi.org/10.1016/j.appet.2020.104786

Tran, G. A., Strutton, D., & Taylor, D. G. (2022). Do social media advertisements matter? The effect of contextual relevance on online consumer responses. Journal of Consumer Behaviour, 21(4), 845–857. https://doi.org/10.1002/cb.2034

Tuncer, I. (2021). The relationship between IT affordance, flow experience, trust, and social commerce intention: An exploration using the S-O-R paradigm. Technology in Society, 65, 101567. https://doi.org/10.1016/j.techsoc.2021.101567

Ul Haq, I., Mazhar, B., Maqsood, F., Pokharel, M., Tareen, H. K., & Maaz ul Hassan, M. (2026). Understanding Algorithmic Personalization in Instagram Ads: The Role of Perceived Creativity, Authenticity & Need for Cognition in Shaping Generation Z’s Purchase Intentions. Telematics and Informatics Reports, 21, 100287. https://doi.org/10.1016/j.teler.2025.100287

Vieira, V. A. (2013). Stimuli-organism-response framework: A meta-analytic review in the store environment. Journal of Business Research, 66(9), 1420–1426. https://doi.org/10.1016/j.jbusres.2012.05.009

Voorveld, H. A. M. (2021). Brand communication in social media: A research agenda. Journal of Advertising, 50(1), 14–26. https://doi.org/10.1080/00913367.2020.1858019

Wang, J., Shahzad, F., Ahmad, Z., Abdullah, M., & Hassan, N. M. (2022). Trust and Consumers’ Purchase Intention in a Social Commerce Platform: A Meta-Analytic Approach. SAGE Open, 12(2). https://doi.org/10.1177/21582440221091262

Xu, X., Wang, Y., & Zhao, K. (2022). Understanding consumer behavior in social commerce: An S-O-R perspective. Electronic Commerce Research and Applications, 51, 101114. https://doi.org/10.1016/j.elerap.2021.101114

Youn, S., & Kim, H. (2022). The effects of personalized advertising on consumer attitudes and purchase intention in social media environments. Sustainability, 14(9), 5231. https://doi.org/10.3390/su14095231

Zhang, M., Qin, F., Wang, G. A., & Luo, C. (2021). The impact of live video streaming on online purchase intention. Service Industries Journal, 41(9), 656–681. https://doi.org/10.1080/02642069.2020.1722977

Zhu, P., & Li, X. (2023). The influences of livestreaming on online purchase intention: Examining platform characteristics and consumer psychology. Industrial Management & Data Systems, 123(3). https://doi.org/10.1108/IMDS-07-2022-0430