Facebook: a new image of marketing 1

FACEBOOK: a new image of marketing

A study on effectiveness of Facebook marketing

A Research Proposal submitted

by

Ramandeep Chutani

MBA, University Canada West

CDRS 313: Research Methodology

Prof. Brian Amouzegar

November 11, 2010

Facebook: a new image of marketing 2

Table of Contents

1. Abstract…………………………………………………………………………………..3

2. Introduction…………………………………………………………….….……….……4

3. Problem……………...………………………………………………….………….…….5

4. Proposed Literature…………………………………………..…………………………6

4.1. Facebook-ing for business……………………………………………………………………6

4.2. Viral Marketing………………………………………………………………………………..7

4.3. Vancouver Business: Success story………..…………………………………………….….8

4.4. Critique and Analyze………………..………………………………………………………..9

5. Proposed Methodology…………………………………….....………………………...9

5.1. Methodology………………………………………………………………………………….9

5.2. Participants……………………………………………………….……..………….11

5.3. Ethical Issues………………………………………………………………………………...12

6. Project work plan and deliverables…………………………………………………...13

7. References………………………………………………………………………………14

6. Appendix………………………………………………………………………………..16

Facebook: a new image of marketing 3

1. Abstract

This research proposal focuses on the effectiveness of Facebook marketing. The success of Facebook

has not escaped the specialists’ attention, but there is a clear absence of quantitative research because

there has been huge debate within the marketing community that is influencing consumer behaviour

and brand perception, so, this study will help to support the debate. Many brands and small

businesses have already entered the Facebook platform and due to the economic remunerations of

this platform, brands with a truncated marketing budget can be lured to join the race. The purpose of

this research is to, with a quantitative approach; determine the level of effectiveness in Facebook

marketing standard. An experiment will be accompanied where a sample of participants will be

exposed to a selection of fictive fan pages on Facebook during one week’s time. After

experimentation process and surveying fans, I will be able to demonstrate the fact of considering a

Facebook an effective marketing tool for businesses.

Facebook: a new image of marketing 4

2. Introduction

Facebook is a popular social networking website launched in the second month of 2004.

Seemingly, it has been studied that almost one out of 14 people in this world is a Facebook user.

Facebook has become an unbeatable phenomenon by its fastest growing number of users and

user friendly platform. By the time it had started, Facebook has approximately more than 500

million users. Each user is connected to an average of 140 friends which shows if a company

persuades a single person to post something about their business or brand they are having the

potential of reaching 140 or more. There are more than 25 billion content shared like pictures,

posts and links and over 170 million things to interact with, includes pages, events, applications,

games and groups (Facebook web-page, press information, 2010). Facebook’s early

achievements attracted investors and marketing companies to nurture their businesses with the

help of its growing number of users. Many national and international companies are using the

help of Facebook to market and advertise their business in order to fascinate more clients

(Retrieved from: http://en.wikipedia.org/wiki/Facebook).

Nowadays, Facebook marketing is becoming talk of the biz world. Facebook’s enormous user

power helped multinational and national companies to build number of clients and sales of their

products and services in a very short period of time. The advertiser is no longer the person in a

company that decides how, when, where and whom to communicate. Nowadays it is the

customer that decides which company and what information to take part of (Meadows-Klue,

2007). Facebook is thus an attractive marketing channel to reach younger consumers, and

particularly interesting for new companies that do not have extensive marketing budget. As a

Facebook: a new image of marketing 5

researcher, I would like to explore more on the effectiveness of Facebook marketing. Hence, this

research mainly focuses on the effectiveness of Facebook’s marketing.

3. Problem

Facebook is a young contender in communication platform and therefore, there are not many

studies or researches regarding its effectiveness as a means of marketing. Deceptively, there are

very few guidelines in relation to what role fan pages should play in a business’ marketing

strategy and how the brand should communicate with consumers through such a medium. The

absence of scientific studies does not, however, reflect a lack of interest amongst advertisers and

the number of businesses starting their own fan page is constantly increasing. Lately, there has

also been a debate concerning the effectiveness of a creative approach against a selling approach

to marketing. This debate has been supported by extensive research and according to several

studies a creative approach is to be preferred (Colliander, Erlandson and Modig, 2010).

However, these results have yet to be tested on Facebook platform.

The problem questions that will be used to perform the research are: how effective is Facebook

marketing, why Facebook marketing is called low-cost marketing? And how ‘fan pages’

influence Facebook marketing? The main purpose for this research is to investigate whether

start-up companies shall use a Facebook fan page in order to enhance perceptions of brand

associations and improve traditional key advertisement indicators amongst consumers. The study

will also determine whether an advertiser shall adopt a creative approach rather than a strictly

selling approach on Facebook. This research will addresses to start-up companies targeting

Facebook: a new image of marketing 6

young students. Objectives of this research are; to analyze, the effect of Facebook marketing on

unknown brands and to ensure full validity to the study, both internally and externally.

4. Proposed Literature Review

4.1. Facebook-ing for business

According to author of this article Facebook is everywhere these days, and it isn’t going

away. A recent report stated that 10% of total time spent on the internet is on Facebook, and it

would be stupid for local businesses not to take advantage of the opportunity accessible by

Facebook. Jared Todd (author) also represented some primer for business looking to reach out to

customers through Facebook

Invite customers, but don’t be pushy : Invite customers to join the page but never push

them otherwise they will get irritated.

Publish your Facebook Page on Website, Twitter, or any other social networking website

Run Facebook Only Promotions : Run promotions which are only accessible through

Facebook.

Facebook for Business : This is the process where a company can promote its products

with the use of Facebook.

(Retrieved from: http://whizkidkonnect.com/)

The main reason why I chose this article, because of author’s straight forward approach in

describing benefits of Facebook, he also shows the main possible ways to get the attention of the

customers. This article represents all the possible ways which make Facebook an effective

marketing tool.

Facebook: a new image of marketing 7

4.2. Viral Marketing

Groups are one of the simplest ways to perform viral marketing on Facebook. It is as easy

as if somebody is relaxing on a couch. It starts when members starts joining a group after that

they can invite any person or a friend on Facebook by using a very unique feature called the built

in Invite feature. If your members are interested and would like to join about your group, it can

grow really fast. Additionally, the group name will usually appear on your members’ personal

profile pages until they leave the group. Many people view groups as “Bumper Stickers”.

Because profile pages are exceedingly trafficked, these links can engender a lot of clicks to a

group page. (Justin Smith, 2007) (Retrieved from

http://www.insidefacebook.com/2007/12/09/inside-facebook-marketing-bible-24-ways-to-

market-your-brand-company-product-or-service-in-facebook/,

http://www.facebook.com/pages/Viral-marketing-tips/92274993058)

Viral marketing is a part of internet marketing. The source here mainly states the meaning of

viral marketing which is also known as word-of-mouth marketing. All these information is

essential for a best conclusion on the research topic. There are certain parts of Facebook page

that results to viral marketing such as its application that connects people with each other

instantly, its fan page feature, invitation process i.e. inviting your Facebook fans or Friends for

an event or gathering. This information is vital for knowing the effectiveness of Facebook

marketing. (Bhavya George, Social Maximizer, 2010) (Retrieved from:

http://sem-group.net/search-engine-optimization-blog/social-media/viral-marketing-on-

facebook-7-points-you-just-cannot-neglect/)

Facebook: a new image of marketing 8

4.3. Vancouver Business: Success story

One success story which is about an entrepreneur who worked hard to develop a

successful and profitable e-business is Sandy Stevens of Sandy’s Home-style Baking Company.

Being healthy to channel her love of baking and sweets into a viable career, Stevens has

experienced a great deal of success over the short time her e-business has been running. Based in

Vancouver, Canada, Stevens was unaware of using marketing tactics that are provided online,

but due to his friend encouragement she learnt all the possible to ways to market her company

products through web. She done her own web designing and she also created a link with

newspapers with the help of search engines like Yahoo! and Google. Now her business is

blooming because of her effort and believing in online marketing and advertising (Retrieved

from: http://www.biz2success.com/2010/06/anyone-can-do-it-small-e-business-success-stories/).

This is a good example of how getting customers in an efficient and effective way. In terms of

expenses, she spent a small portion of her money to create a platform where people can get

information easily. This article will help to strengthen the topic as it demonstrates the success

rate of promoting products and services through internet marketing. Facebook is a part of

internet, thus, this article is essential to find out the speed of growth in business by using

Facebook as a marketing tool.

Facebook: a new image of marketing 9

4.4. Critique and Analyze

The most vivacious part of this research is to provide a theory or a model that proves the

effectiveness of Facebook marketing. Therefore, these are some literatures which are essential

for researching on effectiveness level of Facebook marketing. In the first article, the author is

primarily focused on the way to get attention of online customers and the rest of the articles are

all about active Facebook users’ signals innovativeness of brand. It covers branding, approach

and style of a product or service that is being marketed by the company. Branding a product

through web is an opportunity for those businesses who would like to increase to increase their

brand value (Steven Holzner, 2009). Furthermore, it elucidates on viral marketing and its

practices; it also shows how it is essential for local businesses. Lastly, it articulates on the

success stories of some business who already adapted internet marketing as their marketing tool

(Chris Treadaway, Mari Smith, Facebook Company, 2010). Overall, all the research articles are

deliberated to be resourceful for the research.

5. Proposed Methodology

5.1. Methodology

There has been quite a buzz about social media currently, and of how it is giving the

consumer increasingly more power while rapidly changing the real face of marketing. I found

myself very captivated by this sensation, but was soon to realize that this open-ended belief in

the influence of social media lacked some very fundamental quantitative research. I decided to

fill this breach and found a great source of inspiration reading Kocken & Skoghagen (2009).

They had conducted quantitative research, analyzing whether Twitter was a valid marketing

Facebook: a new image of marketing 10

platform and how it should be used. With the conviction that there are many similarities between

Twitter and Facebook I decided to perform an equivalent study on Facebook.

Inspired by Kocken & Skoghagen (2009) a deductive approach is to be applied in the research.

The study is of underlying character, being that the objective is to find a connection between the

acquaintance of a brand on Facebook and certain effects on consumer comportment and

discernment of brand associations. A quantitative study will be held by simulating a realistic

environment which I believe to obtain more general results. Respondents will be given four

specific brands (i.e. fan pages) to follow on Facebook during one week and were thereafter will

be asked to answer a survey. I chose to follow this experiment design despite the difficulties

attached with involving a rather big test-group into a relatively time-consuming study. My choice

was greatly influenced by the fact that Kocken & Skoghagen (2009) had used a similar design,

which had already been proved to be successful. Moreover, I am hoping that by using a similar

design as Kocken & Skoghagen (2009), I will open up for an interesting comparison between

Facebook and Twitter as marketing channels.

The experiment will be started by ideating four fictive brands, thus certifying that none of the

respondents would be aware with them, and creating all the necessary fan pages. Status updates

will be prepared and would be posted during the study. The participants will be divided into four

groups. Each respondent will be given four fan pages (i.e. one for each brand) in order to follow

and asked to create one friend list consisting of all fan pages he/she will be assigned. The friend

list is a necessary deterrent in order to simulate a news feed (i.e. one of the sections of Faceobok)

and make sure that all status updates I will like the respondents to perceive must be noticed.

Facebook: a new image of marketing 11

After the experiment, a survey will be distributed to all participants through the Facebook-mail.

The participants will be given one week to answer the survey before they will get disregarded

from the study. This will help to reduce the time period in order to pass between the experiment

and the survey as that could have biased the study. The survey was created with a survey-tool

available from the website of Survey Monkey (www.surveymonkey.com). An exact same survey

will be given to all the respondents, covering all the four brands examined. Most of the questions

will be standard where respondents will be asked to determine how well they agreed with some

given assertions, similar to those asked by Kocken and Skoghagen (2009) in Twitter marketing.

5.2. Participants

Since the study would require some involvement from the participants I realized that it

would be challenging to influence people to participate unless if I have any kind of personal

relationship with them. That is the reason why I decided to recruit participants to my study

amongst own social networks. Nevertheless, being part of the target group I will be involving a

sample that is relatively representative with regards to the objectives of the study.

The target of this study is to gather almost 300 people who are interested in participating to this

study. The respondents of this study will be students of 20 to 30 years of age. Most of the

participants will be asked to become fan of selected fan pages. After this procedure I will be

giving out a survey to all the fans. Questions in the survey will be concerning the effectiveness of

Facebook marketing.

Facebook: a new image of marketing 12

5.3. Ethical Issues

All the sources and references are open and accessible through the web except

information gathered directly from the company itself is not accessible. According to them any

information from their company is confidential and cannot be used in any research without their

authorization. So, I decided to send them an e-mail, requesting that they will allow me to gather

appropriate information directly from their website. Other issue will be the sample that will be

collected within the same network (i.e. students of Vancouver) and this may have inhibited

reliability of the scores.

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6. Project Work Plan and Deliverables

Tasks to be performed Dates Time Required1. Final Research proposal

and submit for clearance

3-11 November 2010 One week

2. Literature Review 22-30 November 2010 One week

3. Methodology 5-15 December 2010 Three weeks

4. Collect Data (i.e.

surveys, fan pages)

16th December 2010 - 1st

march 2011

Ten weeks

5. Process Data and make

preliminary

interpretation

End of each month of data

collection

Five weeks

6. Analyze and write report 2-30 March 2011 Two weeks

7. Publish and discuss work

findings

6-25 April 2011 Two weeks

8. Final Thesis submission 26th April 2011 – 15th May

2011

Three weeks

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7. References

Colliander, J. Erlandsson, S. Modig, E. (2010), “Speed or Distance”, Manuscript, Stockholm

School of Economics; Cote, J.

Chris Treadaway, Mari Smith, Facebook (Firm) (2010). Facebook marketing: an hour a day,

Indianapolis: Wiley Publishing.

Steven Holzner (2009). Facebook marketing : leverage social media to grow your business,

Chicago: Que Publishing.

Creswell, J.W. (2003). Research design. Qualitative, quantitative and mixed methods approach.

Thousand Oaks, CA: Sage.

Meadows-Klue (2007), “Falling in Love 2.0: Relationship marketing for the Facebook

generation”, Journal of Direct, Data and Digital Marketing Practice, Vol. 9, Issue 3, p. 245-250;

Facebook web-page, press information, http://www.facebook.com/press/info.php?statistics, 15

May 2010

http://www.facebook.com

http://www.clickrmedia.com/services/social-media-marketing/facebook

http://en.wikipedia.org/wiki/Facebook

http://en.wikipedia.org/wiki/Criticism_of_Facebook .

Facebook: a new image of marketing 15

http://whizkidkonnect.com/

http://arc.hhs.se/download.aspx?MediumId=947

http://netbrands.net/

http://www.insidefacebook.com/2007/12/09/inside-facebook-marketing-bible-24-

ways-to-market-your-brand-company-product-or-service-in-facebook/

http://www.facebook.com/pages/Viral-marketing-tips/92274993058

http://www.biz2success.com/2010/06/anyone-can-do-it-small-e-business-success-

stories/

http://sem-group.net/search-engine-optimization-blog/social-media/viral-

marketing-on-facebook-7-points-you-just-cannot-neglect/

http://wilderdom.com/research/QualitativeVersusQuantitativeResearch.html

http://hbr.org/2010/03/one-cafe-chains-facebook-experiment/ar/1

http://www.sagepub.com/upm-data/10982_Chapter_4.pdf

http://www.slideshare.net/maemae21/social-ethical-issues-of-information-

systems-facebook

http://www.churchofcustomer.com/2009/10/facebook-fan-pages-are-the-

future.html

http://news.smh.com.au/breaking-news-technology/paypal-to-become-a-way-to-

pay-for-facebook-ads-20100219-oj88.html

http://sem-group.net/search-engine-optimization-blog/social-media/viral-

marketing-on-facebook-7-points-you-just-cannot-neglect/

Facebook: a new image of marketing 16

8. Appendix

Research Survey:

Facebook Marketing

1. Which social networking website is considered to be a best tool for marketing?

Which social networking website is considered to be a best tool for marketing?  Facebook

MySpace

Twitter

2. Is Facebook an effective marketing tool?

Yes

Maybe

No

3. How frequently do you log into Facebook?

Daily

Monthly

Several times a day

Weekly

4. Do you normally click on Facebook Ads?

 Sometimes

Several Times

Never

(Retrieved from: www.surveymonkey.com)