Market Research (Final Thesis on SNS )

FINAL THESIS

Social networking sites : AN effective approach to marketing

TABLE OF CONTENT

INTRODUCTION CHAP # 01 ..................................06 - 20

LITERATURE REVIEW CHAP # 02 …………………………21 - 38

METHODOLOGY CHAP # 03……………………………….39 - 46

Research Findings & Data Analysis CHAP # 04.…………………..…47 - 74

Discussion of Data AnalysiS CHAP # 05 ……………..………75 - 82

SUMMARY CHAPT # 06………………….…………….…..83 - 85

Conclusion, Limitations of the study CHAP # 07….……………….. 86 - 96

MUHAMMAD ALI JINNAH UNIVERSITY


December 08, 2011

Ms. Asheen DanishMuhammad Ali Jinnah University Karachi.

Respected Mam,

This Research Article has focused on considering “Social Networking Sites as an Effective Approach to Marketing”. The main objective of this research was to find out the effectiveness of marketing on Facebook and do they help marketers in interacting with consumers in a better manner. This report includes all evidence supporting our conclusion and the steps and paper work involved in a standard research project.

If you have any queries or doubts about the compilation of this report you may feel

free to contact members of the group at the e-mails listed below.

Sincerely,

[email protected] ,

[email protected] ,

[email protected] ,

[email protected] ,


mailto:[email protected]





ACKNOWLEDGMENT

First and foremost, we would like to thank Allah Almighty, for giving us the

strength to complete the research project we started. Next in line would be our

most respected teacher, mam Afsheen Danish for imparting to us the

knowledge, without which our research would have been incomplete.

The fellow members of our group have proven to be a source of encouragement

throughout, each and every one in the group pitched in with an appreciable

effort.



Abstract

Social Networking Sites such as Facebook and MySpace have rapidly become most

visited web places for a huge number of internet users providing an opportunity for the

marketers to leverage on their popularity and market their products or services. These

websites play an important role in shaping public opinion on virtually every aspect of

commerce. This research paper focuses on whether social networking sites prove to be

useful for marketers or not and how marketers can have a better understanding of the

consumers and gain insight about their behavior and attitude enabling them to interact

and communicate directly with the consumers and improve their marketing efforts to

enhance their business profile. Increasing popularity of these sites is also taken into

consideration to see its impact in future

Key words: Social Networking Sites, Viral Marketing, Online Advertisin



Chapter 1

SOCIAL NETWORKING: AN APPROACH TO EFFECTIVE MARKETING

1. INTRODUCTION

Social Networking Sites (SNS) act as a platform to connect a number of individuals with

common interests allowing them to actively participate in interacting and communicating

ideas, interests, feedback and sharing other sites and links. This would ultimately result

in reaching out to a large number of audience twenty-four hours a day and seven days a

week giving rise to a communication channel for potential clients. Comparing the cost of

the clicks, potential impressions or interaction with the company’s brand to the cost of

marketing through traditional method shows that the investment is relatively cheap.

Since marketers aim to reach to the consumers to the maximum extent SNS helps them

to directly seek their target market



The paper is focusing primarily on Facebook as it has an existing number of 80 million

users with well developed marketing tools which will be discussed to evaluate what

marketing efforts should be implemented and how a business profile can be enhanced.

Marketers can thus have a more focused approach by targeting certain segments of

members sharing a particular interest through an integrated marketing plan. Marketers

can also make use of user demographics and trends which is provided by Facebook in

the form of free data enabling them to review any individual’s activities and assuring

advertisements of trusted referrals as they are allowed to attach friend-to-friend referrals

to their advertisements. This provides the opportunity to avail flexible pricing and buy

any advertising space based on clicks and impressions allowing rich media display and

developing an internet presence for organizations. Advertising through SNS is much

cost efficient through the option of paying either for the click or the impressions. When

an individual sees the ad on the web page, it accounts for an impression and when he is

actually connected to the company’s web page by clicking on it, it is termed as Click.

Individuals remain entertained by Facebook as it provides them what interests them and

expands their networks. The concept of friend-of-a-friend leads to increasing the range

of individuals who would be interested in a particular product thus enhancing the

organization’s popularity.



1.2. BACKGROUND

1.3 Literature Review

Social networks are online communities of people who typically share a

common interest or activity. They provide a variety of ways for users to interact

with each other — blogs, e-mail, instant messaging, and newsfeeds which

contain information about, or valuable to those in your network. They are

powerful in their ability to facilitate communication. These sites have enhanced

their popularity by Word-of-Mouth and users seek opinions from their friends in

case of making any purchase decisions. This shows that social media has

become a better source of advertising than traditional methods. Consumers

themselves provide much of the information and content related to a particular

product with lesser control over messaging and positioning by marketers. If any

information is transferred to the consumers through a trusted network, it would

have a more influencing impact than any other medium. Consumers tend to be

more comfortable while communicating with each other by sharing opinions and

recommendations. Users tend to organize by affinity, life stage and

psychographics showing that information is referred to them rather than being

pushed forcefully.



webpage, giving rise to huge traffic on your website, improving your search

engine optimization, increasing customer loyalty and resulting in success of

new product launches.

Social Networking can be a component of numerous business initiatives, including:

Amplifying word-of-mouth marketing

Market research

General marketing

Idea generation & new product development

Co-innovation

Customer service

Public relations

Employee communications

Reputation management

A recent survey of life science marketing professionals conducted by Red Bridge

Marketing showed that there will be an increase of more than 100% in the use of social

media marketing in 2009 over 2008; 15.2% used social media marketing in 2008 and

21.2% plan to start using it in 2009. Research shows that various business goals

companies are hoping to achieve with their social media marketing efforts



1.3.1 Social networking sites as a vital tool for marketing campaign :

Social networking is defined as the grouping of individuals together into to specific

groups, often like a small community or a neighborhood. Although social networking is

possible in person, especially in schools or in the workplace, it is most popular online.

This is because unlike most high schools, colleges, or workplaces, the internet is filled

with millions, if not more, of individuals who are looking to meet other internet users and

develop friendships.

Face book is a social networking website that allow users to communicate with friends

and exchange information the site is free to users and generate revenue from

advertising and sponsored groups .

1.3.2Low cost:

Study shows that if carried out in a proper manner, social marketing can draw a highly

targeted segment of Internet users to visit your business or your website. ROI is an

essential part of any business plan. If a business had lower budgets, it must increase its

ROI to be on the safe side. Social marketing is one of the cheapest ways of marketing

currently available. Marketing on SNS only involves costs for actual clicks made;



therefore marketers can ensure that they are only paying for advertisements that are

successful in attracting customers.

1.3.3Does not required specialized or technical skills:

Anyone who understands how to use the internet must easily make use of a social

networking site meaning that it does not require any specialization or vast technical

skills. Due to an increasing amount of overflowing ads, they have lost their charm and

are no longer of any interest to users; in fact it has become relatively irritating. Because

most Internet users are bombarded with ads every day, as a whole society has become

so used to them people generally do not click on them. Banners and even link ads are

losing their charm because many people do not trust an online advertising campaign

backed by money. With social marketing, you can provide a more human touch to

attract potential customers and can target only that market of users who would

ultimately pay attention to your products.

1.3.4 Marketers can keep a track of the consumers:

AdSense follows a user’s behavior by placing related ads on visited websites. The

promotion of a brand does not remain limited to the member alone; it gets extended to

the member’s friends. Facebook also offers Insight, a service which supplies free data

to promoters, enabling them to review the activity and performance of their



advertisements as well as user demographics and trends. Facebook enables

advertisers to be cost-efficient through a choice of paying either by clicks or

impressions. This enables a company to create advertisements which can best serve

their promotion objectives.

1.3.5 A “PUSH” strategy:

New technology such as social networks and the consumer empowerment accruing

from them have created a new breed of consumers, forcing marketers to consider how

they communicate this value proposition to this group and engage with them. Marketers

can no longer rely on mass media channels to “push” their communications to

consumers in this new customer-focused environment; they must embrace new

strategies if they wish to succeed (Sawhney and Kotler, 2001). Facebook CEO Mark

Zuckerberg enthused about a new era of pull marketing in which consumers would

voluntarily endorse the products and brands they like, where Facebook helps marketers

in creating highly effective ad campaigns (Klaassen, 2007).

1.3.6 Marketers can measure effectiveness of their advertisements:

The benefits of marketing on social networks is that it allows access to any target

markets regardless of geographic locations and thus provides a broad-based



understanding of the market realities, consumer perceptions and behavior which could

be beneficial to marketers.

Leading companies such as Unilever, Xerox, P&G, Virgin, Toyota, JP Morgan, CISCO,

IBM, Burger King and Honda had successfully utilized social networking websites.

Facebook allows advertisers on their site to measure the effectiveness of their

advertising (i) through deep analytics where advertisers are able to track who is

engaging with their pages and how; and (ii) via optimization where advertisers can

adjust and refine their targets, budgets or creative instantly.

1.3.7 Consumers both consume and supply:

Users of social networks act as a consumer as well as a supplier. If a user appreciates

your content he would be influential over a large number of other individuals thus

enhancing your business’ popularity. If the other users perceive the message to be

valuable for them, this would ultimately give rise to a huge audience. This is extremely

powerful to marketers, as users don’t feel that the information is being pushed at them,

but referred to them by a trusted friend in a trusted network.

When a business has its focus on forming a group or organizes a page on a social

networking website, the members are reminded of your brand with every related action



or link. Therefore while deciding which group or page to join, such links would be of

interest to them.

1.3.8 Enhances customer loyalty:

If a user participates with consistency and provides an honest opinion it would definitely

add value to the business as useful information would be provided to them providing

them an opportunity to improve upon. It would enhance your organization’s credibility

and would build users’ trust in your business.

1.4 STATISTICS

Some statistics of facebook are as follows :

More than 400 million active users , average user has 130 friends on the site , More

than one million developers and entrepreneurs from more than 180 countries , More

than 60 million Facebook users engage with Facebook Connect on external websites

every month,

There are more than 100 million active users currently accessing Facebook through

their mobile devices. Study shows that Facebook contains three types of ads

categorized as Homepage ads leaving an option for users to engage with a brand by

becoming a fan; social impressions include social context like users’ friends who are



already fans of the brand; and organic impression appears on the homepage of friends

of users who have engaged with a brand.

Study shows that if carried out in a proper manner, social marketing can draw a highly

targeted segment of Internet users to visit your business or your website. ROI is an

essential part of any business plan. If a business had lower budgets, it must increase its

ROI to be on the safe side. Social marketing is one of the cheapest ways of marketing

currently available. Marketing on SNS only involves costs for actual clicks made;

therefore marketers can ensure that they are only paying for advertisements that are

successful in attracting customers.

1.5. RATIONALE OF STUDY



marketers to leverage on their popularity and market their products or services. These

websites play an important role in shaping public opinion on virtually every aspect of

commerce. This research paper focuses on whether social networking sites prove to be

useful for marketers or not and how marketers can have a better understanding of the

consumers and gain insight about their behavior and attitude enabling them to interact

and communicate directly with the consumers and improve their marketing efforts to



enhance their business profile. Increasing popularity of these sites is also taken into

consideration to see its impact in future.

1.6. SCOPE OF RESEARCH

This research paper can prove to be an opportunity for the marketers to enhance their

understanding of the consumers and develop marketing activities that interests these

users and enables them to be moreinteractive with the marketing team. Further research

could widen the frame of reference by drawing on larger samples both nationally and

internationally. Further investigation into this model could clarify and confirm the importance

in developing advertising on the online social networks. Individuals with various preferences

should be considered, and the role of the network structure can be seen to study its

effectiveness. Moreover, further research is needed to address social networking sites as

an advertising medium and measure its relevance and credibility considering the target

market.

1.7. AIMS AND OBJECTIVES

1.7.1 Aim :

This research paper aims at understanding whether social networking sites prove to

be a useful tool for marketers or not and how marketers can have a better



understanding of marketing their products/services to the right users, at the right time,

and gain insight about them.

1.7.2 Objective:

The objective of this report is to understand how effective marketing can be conducted

through Social Networking Sites and whether marketers can have a better

understanding of consumers and gain insight about their behavior through these sites.

1.8. Research questions :

I. What are the factors resisting consumer’s attention towards advertisement on

online social networking sites?

II. Do consumers avoid advertisements on online social networking sites when

they find it disrupting their online tasks?

III. Do consumers avoid advertisements on online social networking sites due to

negative experiences with previous online advertisements ?

IV. Do marketers have profile pages eye catching enough for the consumers or not?

V. Do contests help in gaining more ideas and making more fans on fan pages?

VI. Do discounts and free gifts facilitate in attaining more consumer attention?



VII. Are the marketers providing proper knowledge and information regarding product?

VIII. What are the reasons of online advertisements on social networking sites being

avoided by most of the consumers?

IX. Do social networking sites acts as an opportunity for marketers to understand

consumers thought process ?

X. Do social networking sites provide an opportunity for capturing consumer attention

towards product/service?

XI. Does a social networking site provide better understanding for marketers to target

the right users at right time?

1.9. HYPOTHESIS

1.9.1 Hypothesis 1:

H0 = Social Networking Sites are an effective tool for marketing.

H1 = Social Networking Sites are not an effective tool for marketing.

1.9.2 Hypothesis 2:

H0 = Social Networking Sites provides effective mode of communication to consumer .

H1 = Social Networking Site does not provide effective mode of communication to

consumer.



1.10 STRUCTURE OF THESIS

In chapter 1, research a way of thinking, which describes that there are two main

paradigms that form the basis of social science research: positivist and nuturalist. The

crucial question that divides the two is whether the methodology of research in the

physical sciences can be applied to research in the social sciences.

In chapter 2, this chapter the research process, has provided an overview of the

research process, which has been broken into eight steps, the details of which are

covered in the remainder of our book. At each step the model provides a smorgasbord

of methods, models, techniques and procedures so you can select the one most

appropriate for your study.

In chapter 3, writing the literature review, your reаson is to convey to your reаder whаt

knowledge аnd ideаs have been estаblished on а topic, аnd whаt their strengths аnd

weaknesses are. Аs а piece of writing, the literature review must be defined by а


http://www.ukdissertations.net/


guiding concept (e.g., your reseаrch objective, the problem or issue you аre discussing

or your аrgumentаtive thesis). Literature search play an important role in helping to

formulate the research problem it brings clarity and focus research problem,improve

the methodology and broadens your knowledge base.

In chapter 4, formulation of a research problem is the foundation ,in term of design,on

which to build the whole study it is important to articulate the objectives of your study

clear.company’s history,product,management and other significant details are included

in this section.

In chapter 5, we analyse that how to identify variables to work on our report. While the

task can become more difficult as the complexity of an experiment increases, there are

a few questions you can ask when trying to identify a variable. What is the experimenter

manipulating? The things that change, either naturally or through direct manipulation

from the experimenter, are generally the independent variables. What is being

measured? The dependent variable is the one that the experimenter is measuring.



In chapter 9, we select a method for data selection we learn to apply methods of

collection require rigorous and systematic design and execution that includes; thorough

planning, well considered development, effective piloting, weighed modification,

deliberate implementation and execution and appropriate management and analysis.

Chapter 2

Literature Review

2.1 Literature Review

Social networks are online communities of people who typically share a

common interest or activity. They provide a variety of ways for users to interact

with each other — blogs, e-mail, instant messaging, and newsfeeds which

contain information about, or valuable to those in your network. They are

powerful in their ability to facilitate communication. These sites have enhanced

their popularity by Word-of-Mouth and users seek opinions from their friends in

case of making any purchase decisions. This shows that social media has

become a better source of advertising than traditional methods. Consumers

themselves provide much of the information and content related to a particular



product with lesser control over messaging and positioning by marketers. If any

information is transferred to the consumers through a trusted network, it would

have a more influencing impact than any other medium. Consumers tend to be

more comfortable while communicating with each other by sharing opinions and

recommendations. Users tend to organize by affinity, life stage and

psychographics showing that information is referred to them rather than being

pushed forcefully.

According to a recent survey conducted by Red Bridge Marketing, approximately

1/3 of the companies in the life science industry plan on incorporating some form

of social networking into their 2009 marketing plan. This represents a more than

100% increase in companies who used social networking as part of their 2008

marketing plan. Most frequently life science companies are leveraging social

networks to increase brand awareness, deliver product information to

prospects/customers, and to increase sales.

Social networks contribute in conducting an effective market research,

generating better ideas for new product development, maintaining public

relations and managing a brand’s reputation. Brand awareness for the

products/services tends to increase by enhancing the online presence. To



encourage this, certain links are attached to the postings on social networks that

lwebpage, giving rise to huge traffic on your website, improving your search

engine optimization, increasing customer loyalty and resulting in success of

new product launches.

Social Networking can be a component of numerous business initiatives, including:

Amplifying word-of-mouth marketing

Market research

General marketing

Idea generation & new product development

Co-innovation

Customer service

Public relations

Employee communications

Reputation management

A recent survey of life science marketing professionals conducted by Red

Bridge Marketing showed that there will be an increase of more than 100% in

the use of social media marketing in 2009 over 2008; 15.2% used social media



marketing in 2008 and 21.2% plan to start using it in 2009. Research shows

that various business goals companies are hoping to achieve with their social

media marketing efforts.

2.2 THESIS # 1:

Latest technological changes increasing consumer empowerment through

social networks have developed a completely new type of consumers, enabling

marketers to understand their perception of value and engage with these

individuals through communication. Data mining has allowed marketers to get

information about their target market with great ease leading to direct

promotional efforts for a specific market rather than a mass population. The

previous strategy of “Push” media is no longer effective in such a customer-

oriented environment; they must come up with new and effective strategies in

order to succeed (Sawhney and Kotler, 2001). Hyper Targeting System is

developed that scans users profiles, gathers information about their interests

and demographics, then sorts them into various categories such as,



entertainment or sports. Whereas, Google Adwords picks up certain search

words and displays related ads. Along with these, Adsence follows user’s

behavior and displays ads on the most visited websites for a user.

The reduction in cost and the increasing number of benefits arising from such

consumer empowerment act as two major motivators for the increasing trend of

marketing on these social networks. Contrary to the traditional method of

advertising such as “Banner” advertising, social networks have enhanced the

use of public relation activities by taking into account the electronic word-of-

mouth (eWOM) which has been the most powerful tool of advertising on these

social networks. When Facebook Ads System was being launched, which

involves the components of word-of-mouth, Facebook CEO Mark Zuckerberg

emphasized on the new trend of advertising that would result in the ultimate

consumers endorsing the brands and the products they like and that also,

voluntarily. Thus, Facebook has developed a highly efficient and effective ad

campaign (Klassen, 2007). This approach has been based on the fact that

individuals are likely to respond more quickly if persuasive marketing is carried

out. This attitude is based on the fact that persuasive power of marketing is

enhanced when it has been communicated by some credible source such as a

friend or family.



Facebook also offers Insights, a service allowing its promoters to receive data to keep a

track of their advertisement and user demographics. Facebook Pages provide an

opportunity to advertisers to develop their own internet space allowing members to join

and communicate it to other members on their contact lists thus enabling them to

directly communicate and interact with the organization.

Users have been empowered to make their own decisions and not be

manipulated by the marketers. They can easily discuss and exchange opinions

giving rise to ‘information democracy’ tilting the information to consumers

(Sussan, et al, 2006; Sawhney and Kotler, 2001).

2.3 THESIS # 2

It was found that business owners use social networks in a greater number as

compared to individuals who are employees for a business. One of the major

benefits of advertising on a social network is that it increases your search

engine rankings which would enhance your business exposure and lead to a

reduction in overall marketing costs and expenses. Twitter, Facebook, LinkedIn

and Blogs are among the most popular sites used by marketers for effective

advertising. Social networks also provide an opportunity for marketers to

increase the exposure for business, give rise to online traffic and build new



business partnerships. More B2B companies have increased their use of social

networks for marketing as compared to B2C companies. A significant

percentage of marketers are using social networks for six hours or more on a

weekly basis.

2.4 THESIS # 3:

Research has found a huge increase in the number of visitors of social

networks. Such interactive websites have gained great popularity within a very

short time period thus enabling users to participate through blogs, emails,

instant messaging and enhancing their interaction among the community

members. Placing paid advertisements; posting comments and allowing

individuals to provide feedback are effective methods of making your marketing

strategies interactive with your consumers. Through such advertising,

companies can gain insights about the consumers and have a better

understanding of their behavior, preferences and habits. Interactive websites

always seem to be tempting for the users and multimedia encourages visitors to

participate in usage of text, audio/video, still images and animation (Shields and

Jones, 2007). Social networks provide a useful platform to cater to a huge

population with diverse demographics such as, teenagers, adults, women,



affluent consumers or older individuals. Research states that 80% of consumers

trust advice from friends online, representing three times as much trust than via

traditional media. Advertising on social networks currently represents a small

portion of overall online advertising, although this is set to rise to approximately

8% of total online ad spending by 2011. A 2006 multi-country survey revealed

that more than one-fifth of adults around the world visit social networking Web

sites. Emerging countries, such as Mexico, South Korea, Brazil, and China,

have the highest percentage of Internet users regularly visiting social

networking sites compared to developed countries. Marketers can thus take

advantage of this opportunity to target the middle class and affluent consumers

in these developing countries.

Case profiles of companies, such as P&G, Toyota, JP Morgan Chase, Burger

King, and Unilever exemplify how companies successfully leverage their

marketing communications via social networking Web sites to achieve one or

more of the following objectives:

Improve customer understanding

Promote issues of social concern

Promote products and services



Facilitate internal knowledge sharing

Increase brand awareness

Unilever has developed a forum of its own to directly interact with its consumers.

Similarly, Xerox has its own virtual world to gain insights about consumer expectations.

Procter & Gamble has its niche social

network targeting women only. It allows marketers to reach a wide range of

consumers to market their products to and enhance their brand awareness.

Burger King offers entertainment content to consumers to make them be more

comfortable and attached to the brand. Honda on the other hand, allows users

to make their own marketing messages for the brand on these social networks

(Market Wire, 2007).

2.5 THESIS # 4:

Internet word-of-mouth, also known as buzz marketing or interactive marketing

is suddenly on a rise due to the ever increasing trend of social networks. As

various people want to talk about their purchase of products/services with each

other, the opportunity can be availed by marketers in promoting their products

through special promotional offers designed for their recipients to forward,

without making the consumers realize the fact that it is being advertised to



them (Kaikati, 2004). The electronic version of the traditional word-of-mouth

advertising is actually the viral marketing. A technique that uses email

messages containing effective advertising messages designed in a manner

tempting users to forward to their friends, family or others in their contact list

(Allsop, Basett and Hoskins, 2007). The messages on Facebook, Twitter, Hi5

and MySpace are circulated among individuals enhancing their involvement in

the product by forming a Chain Reaction of Consumer Awareness. These

messages can be delivered from one profile to another with their content

integrating with each profile increasing its user’s acquisition and retention of

the advertisement. Many members perceive that their friend is a better source

than the advertising companies and they serve both in supplying and

consuming the content. Users don’t feel that the information is forced or

pushed at them but referred by a trusted friend. The rate at which products are

discussed is hyper-accelerated conveying a message through a potentially

self-replicated, growing campaign where information is transferred from one

person to two other people and from them to two more and so on. Rapid

diffusion of information can be carried out if the playful applications of the

social networks tend to enhance consumer interest and make usage of the site

intrinsically enjoyable. If the users of social networks perceive that there are



enough friends on the network with common interests, to share content, it is

likely that they would carry out electronic word-of-mouth advertising. Some

researchers have found that the ease of use and the perceived usefulness of a

social networking site acts as a strong determinant of usage acceptance,

adoption and usage of a network, leading to disclosure of more information to

the marketers (Taylor and Todd 1995; Venkatesh, 2000).

2.6 THESIS # 5

Research shows that people who influence other individuals have a large social

network and are often referred as connectors (Kelly and Barry 2003). The taste

of an individual forms his own single social identity showing his purchase

behavior, attitude and preferences. The effect of influencing other individuals in

their purchase decision making is termed as a bandwagon effect (Leibenstein

1950), peer influence (Duncan, Haller and Portes 1968; Manski 1993, 2000) or

neighborhood effect (Bell and Song 2007; Case1991; Singer and Spilerman

1983).

Social networks have become a cultural phenomenon. Facebook, one of the largest

social networking sites in the U.S. was founded in 2004. By February 2009, it boasts

more than 175 million active users and continues to grow rapidly. Worldwide these



users spend 3.0 billion minutes each day on Facebook. More than 850 million photos

and 5 million videos are uploaded on the site each month.

Individuals on any social network have certain members known as in degree

that have a certain degree of influence over others and their homepage is

visited by several people to see what trends they are following. Such members

are very influential and can be targeted by the marketers in encouraging a large

list of followers to adapt a product. A friend’s purchase in the past can have a

positive influence on the user’s purchase in the current scenario. Members with

a positive effect are moderately connected to other individuals and make

constant purchase decisions following other members on the network (Burt

1987). By taking into consideration the need for differentiation or maintenance

of status, research has found out that individuals with a negative effect are

highly influential but reduce their purchases of products that are bought by

others and thus affect the revenue ultimately. Users having a low status do not

have a prominent social network and therefore, do not follow trends and are

unlikely to make any purchases through these networks (Iyengar, Han, Gupta,

2009).



In spite of this cultural and social revolution, the business viability of these

social networking sites remains in question. While many sites are attempting to

follow Google and generate revenues from advertising, there is significant

skepticism if advertising will be effective on social networking sites. Seth

Goldstein, co-founder of Social Media Networks, recently wrote on his

Facebook blog that a banner ad “is universally disregarded as irrelevant if it’s

not ignored entirely,” (New York Times, Dec 14, 2008). Recognizing this, in

November 2007, Facebook experimented with a new program called Beacon,

which shared purchases of a friend with a user with the hope that this would be

viewed as “trusted referral” and generate more sales for its advertisers. The

program backfired due to privacy issues but Facebook asserted that it would

continue to evaluate this kind of program. Cyworld has been selling music and

other virtual items (e.g., wallpaper) to its users for many years with the belief

that friends influence each other’s purchases of these items. If friends indeed

influence purchases of a user in a social network, it could potentially be a

significant source of revenue for the social networking sites and their corporate

sponsors. The purpose of this study is to empirically assess if this is indeed

true.

Specifically, we wish to answer the following questions:



I. Do friends influence purchases (frequency and/or amount) of a user in a social

network?

II. Which users are more influenced by this social pressure?

III. Can we quantify this social influence in terms of percentage increase in sales

revenue?

2.7 THESIS # 6:

Word-of-mouth is known to be the most effective yet least understood

marketing strategy (Misner 1999). Social networking sites provide an effective

platform for this activity to take place. It has been reported that customers who

have been acquired through word-of-mouth rather than traditional marketing

methods are more loyal to the organization. WOM is twice as effective as a

television advertisement, four times more than the personal selling and seven

times more than the radio advertisement (Katz and Lazarsfeld 1955). WOM

communication strategies tend to be appealing because they act as a prospect

of overcoming consumer resistance with a lower cost and rapid delivery. WOM

advertising has a strong impact on acquisition and has a twenty times greater

degree of elasticity as compared to traditional marketing methods.

2.8 THESIS # 7:



Facebook estimates that it has 120 million active users (i.e., who have accessed its site

in the past 30 days). Research has found that the medium of marketing or advertising,

affects the believability and the trustworthiness that influences a consumer’s opinion

about how credible the information being offered

is (Moore and Rodgers 2005). Users are constantly exposed to messages

through traditional media such as television, newspapers, through guerilla

media campaigns such as sub-viral marketing online and brand installation

along with consumer generated media such as blogs, online social networking

sites and podcasts (Gritten, 2007; Schultz, 2006). If a consumer lacks trust or

does not believe a source of media, he would ultimately pay less attention to

the advertisement or its content (Johnson and Kaye 1998).

Consumer avoidance takes place when the speed of data retrieval or data

processing is interrupted by an advertisement (Cho and Cheon 2004). Pop-up

ads often distract consumer attention or may require the consumer to respond

to resume his online activity, thus, encouraging him to immediately delete the

message, and the advertising clutter forcing the consumer to avoid ads

irrelevant to him (Ingram 2006). Social networking sites are funded with the

increasing sales of the advertising carried out on them, targeting the users of



the site (Gangadharbatia 2008). The faith of the advertisers on these sites

shows the financial viability of these sites (Krishnamurthy and Dou 2008). Any

prior negative experience of a consumer which may have resulted in perceiving

internet advertisement as deceptive or exaggerated or not targeted correctly or

leading users to inappropriate sites, may result in avoidance of advertisements

(Cho and Cheon 2004). Due to these marketing techniques users consider

internet targeting to be distrustful (Grant 2005). The issues of privacy,

credibility, advertisement avoidance and trust are likely to affect consumer

perception while receiving ads on these sites (Krishnamurthy and Dou 2008).

2.9 THESIS # 8:

Social networking site is the ultimate manifestation of user generated content

holding the greatest potential as compared to any other media online.

Uploading anything on the internet that does not involve any professional media

is termed to be the ‘Consumer-Generated Content’. The consumer himself is

the marketer, distributor as well as the consumer leaving no gap for marketers

to function. This enhances consumer’s interaction and communication over a

particular topic allowing him to share and discuss his experiences related to any

product/service helping various consumers in purchase decision making.



Targeting conversations among consumers and keeping a track of customer

communities, brand experiences, their discussions, likes, dislikes, opinions and

comments is valuable for marketers these days. Advertisers also have the

opportunity to create their own channels such as YouTube allowing large

consumer traffic who can visit and engage in the brand activities carried out

over the site. CNet encourages users to make more informed electronic

purchasing decisions by allowing them to rate products from one to ten rating

scale and providing their own reviews. Similarly, Edmunds allows users to

share their automobile ownership and purchasing experiences. The activities by

both these sites turn out to be productive as consumers are there for a

particular product and are interested in learning more about it.

Social Networking Sites and the User-generated content both target at gaining

knowledge about user’s demographics, behavior and psychographics.

Advertising through social networks has forced marketers to change their

approach. Now, instead of providing one-way messages, marketers have to

engage consumers in a conversation. This level of engagement is more unique

as well as complex. Marketers are now advertising on user generated content

that is owned by the consumers themselves. The ads are either placed around

the content or tend to be a part of the content. Pre-roll video ads or overlay ads



on YouTube have become very common that pop-up on the video covering a

small portion of the screen. Conversation targeting has allowed marketers to

place ads near the conversations that discuss your brand the most. Custom

communities has provided an opportunity for marketers to engage the

consumers in activities like games, quizzes, polls, interesting contents or

contests. Brand profile pages are the pages made by an advertiser for a

particular product on a social network containing all sorts of material and

information, with demonstrative videosinformation as they want. Brand

wrappers are among the most popular method of advertising on a user

generated content that forms a skin or background of the web page providing a

complete three sixty degree experience to the user.

Brands of all sorts are eager to jump into the user generated content/social

networking sites, but doing this without having a clear objective and method can

be drastic for the brand image if not perceived properly by the consumer.



Chapter 3

Research Methodology

3.1 Introduction:

Social Networking Sites (SNS) act as a platform to connect a number of individuals with

common interests allowing them to actively participate in interacting and communicating

ideas, interests, feedback and sharing other sites and links. This would ultimately result

in reaching out to a large number of audience twenty-four hours a day and seven days a

week giving rise to a communication channel for potential clients. Comparing the cost of

the clicks, potential impressions or interaction with the company’s brand to the cost of

marketing through traditional method shows that the investment is relatively cheap.

Since marketers aim to reach to the consumers to the maximum extent SNS helps them

to directly seek their target market



The paper is focusing primarily on Facebook as it has an existing number of 80 million

users with well developed marketing tools which will be discussed to evaluate what

marketing efforts should be implemented and how a business profile can be enhanced.

Marketers can thus have a more focused approach by targeting certain segments of

members sharing a particular interest through an integrated marketing plan. Marketers

can also make use of user demographics and trends which is provided by Facebook in

the form of free data enabling them to review any individual’s activities and assuring

advertisements of trusted referrals as they are allowed to attach friend-to-friend referrals

to their advertisements. This provides the opportunity to avail flexible pricing and buy

any advertising space based on clicks and impressions allowing rich media display and

developing an internet presence for organizations. Advertising through SNS is much

cost efficient through the option of paying either for the click or the impressions. When

an individual sees the ad on the web page, it accounts for an impression and when he is

actually connected to the company’s web page by clicking on it, it is termed as Click.

Individuals remain entertained by Facebook as it provides them what interests them and

expands their networks. The concept of friend-of-a-friend leads to increasing the range

of individuals who would be interested in a particular product thus enhancing the

organization.



3.2 Research Design :

Research design is the outline of proposed research process consists of a

framework of data compilation, categorization, measurement, investigation and

presentation for this study. It is basically a time and resources based method of solving

a research problem to facilitate the collection variety of data and to explain variables

relationships by using appropriate measures.

Conclusive ( exploratory ) research approach is used in our research .

3.3 Research Approach :

Conclusive Research Method is adopted which would act as an aid in decision making

to advertise on Facebook and understand consumer behavior.

3.4 Research Method:

Both quantitative and qualitative data are used. However, the qualitative data has a

lower proportion.Secondary data was used to determine what has already been studied

by various individuals and how are Social networking sites becoming more popular with

time.



3.5 Sample Design:

The target population was various Facebook users in Pakistan, Saudi Arabia, England

and Canada(online friends , relatives out there ).and among the students of Muhammad

Ali Jinnah University .

3.5.1 Sampling Method:

Non-Probability Convenience Sampling Method was adopted meaning that not any

particular segment was selected instead whoever was conveniently available

contributed his feedback.

3.5.2 Sample Size:

The sample size was 150 students as the data from the whole population could not be

determined . sample of 100 people were determined by survey for filling up the

questionnaire .

3.6 Questionnaire Designing :

We have developed a survey feedback form for this study. The questionnaire is

designed based on our concept of research model. The items adapted from previous

researchers on the concept of advertising on Social Networking Sites are considered.



The survey questionnaire would include participant’s prolife: gender, age, education and

the ethnicity. We have selected a sample of about 100 Facebook users using a

Convenience Sampling method as the study focuses on consumer’s perspective about

advertising and there is no population frame to enable a random sampling process. The

target population for the focus group that was conduct includes individuals from Karachi

only using Facebook on a regular basis.

The questionnaire includes likert scale It includes both open ended and close ended

questions related to the marketer and consumer intrest.

3.7 Survey Methodology :

Survey Research Technique and a Focus Group of 6 individuals and 1 moderator, was

conducted for the collection of Primary Data.We have then taken several measures to

ensure data validity and reliability.. The survey was revised for any potential confusing

items before administrating the pilot survey. The pilot survey thus provides an

opportunity to analyze data without any bias to maintain its validity and reliability. The

pilot study was conducted using a selected group of 10 individuals in Karachi having

relations with the marketing on the internet. Their remarks and suggestions were taken

into consideration and evaluated and those which were relevant were integrated into our



survey. We then used our own personal opinion poll management to assemble the data

for this research.

To set up the non-attendance of non-response bias, it is necessary to collect data from

a set of non-respondents and compare it with that which is freely supplied. Comparing

the mean values of responses for earlier returns with the means from later returns has

the ability to reveal any differences between the early and late responders who require

prompting. It is assumed that late respondents contribute to similarities with non-

responders, and if no significant differences exist, the chance is strong that non-

response bias does not exist.

3.8 Data Collection Method:

Self administrative collection method was used as the questionnaire was provided to the

individuals that had very clear instructions and was designed in a quite simple manner

to avoid any confusion. When the questionnaires were filled, they were collected by the

field workers.

Whereas, the focus group was conducted among the students of Muhammad Ali Jinnah

University (MAJU).



3.9 Data Analysis:

Usage of Microsoft Excel helped in descriptive analysis of data enabling us to maintain

accuracy in our research and act as an aid in decision making in the best possible

manner.

3.10 Ethical Measures:

The conducted research study ensures the fulfillment of all the requirement of this

study, principles and ethical measures Bell and Bryman (2007) suggested vital practical

and achievable ethical principles in the social sciences. These principles are maintained

in this research as:

Participants will not receive any harm from the proceedings of this research.

The dignity of participants is well kept during the process.

Research participants are fully informed about the nature of the research.

The confidentiality of the participant’s details will be maintained.



The particulars’ of management and respondents will not be shared with outside

sources.

Avoidance of deception with reference to the nature and scope of the research.

Honesty and transparency will be kept in communication of findings of the

research.

There will be no misleading and false reporting occurs in this research.

The above code of practice in the proposed research is maintained in this

research to fulfill all the requirements of research in business studies. Ethical

measures are achieved in this research by making sure that Interviewees and

survey respondents are properly informed about the purpose, nature and scope

of research, confidentiality of the personal information is guaranteed, and the

honesty will be kept in reporting and analyzing the collected facts.



Chapter-4

Research Findings and Data Analysis

SOCIAL NETWORKING: AN APPROACH TO EFFECTIVE MARKETING

4.1 Interviews Processing

After conducting an interview, all data was transcribed to the excel sheets to get the

result that how many people use social networking sites and their interest about it and


Gender?

82 54.3 54.7 54.7

68 45.0 45.3 100.0

150 99.3 100.0

1 .7

151 100.0

male

female

Total

Valid

SystemMissing

Total

Frequency Percent Valid PercentCumulative

Percent

femalemale

Gender?

100

80

60

40

20

0

Fre

qu

en

cy

Gender?


for that data is recorded in tables in excel spread sheets to make the analyses easy.

After that data comparison sheets were developed for the responces to analyse.

4.2 Personal Observations

In this research it shows the believability or trustworthiness of the medium influences

how the consumer views the credibility of the information. Anyone who understands

how to use the internet must easily make use of a social networking site meaning that it

does not require any specialization or vast technical skills. Users of social networks act

as a consumer as well as a supplier.

(Interviewees Personal Information)

Questions Students Faculty

Respondent Name Confidential Confidential

Avg. daily use of internet More Than 4 hours More than 2 hours

Peak timings 10-12 pm 6-8 pm

Age in Years 18-24 years 41-50 years

4.3 Interviews’ Empirical Findings

We can talk about an interview in detail to find the best result for our research



Table 1. Participant Profile Focus Groups In-Depth Interviews

Age Average age 20 years Average age 18 years

Gender Girls: 12 Boys: 11

Girls: 5 Boys: 3

Social networking platform MySpace: 17 Facebook: 2 Both: 2

MySpace: 8

Length of involvement in social network site

Average 12 months Average 16 months

Amount of time per week spent on social network sites

Average 11.5 hours per week

Average 5 hours per week

4.3.1 Knowledge Management

The consequence of marketing on the web is that it allows access to markets regardless

of geographic locations and thus provides a broad-based understanding of the market

realities which could be beneficial to marketers. Leading companies such as Unilever,

Xerox, P&G, Virgin, Toyota, JP Morgan, CISCO, IBM, Burger King and Honda had

successfully utilized social networking websites. Facebook allows advertisers on their

site to measure the effectiveness of their advertising (i) through deep analytics where

advertisers are able to track who is engaging with their pages and how; and (ii) via

optimization where advertisers can adjust and refine their targets, budgets or creative

instantly..



Do you use facebook?

Frequency Percent

Valid Percent

Cumulative Percent

Valid No 6 4.0 4.0 4.0yes 144 95.4 96.0 100.0Total 150 99.3 100.0

Missing

System

1 .7

Total 151 100.0

4.3.2 Communication Management

Members of social networks serve two roles; they both supply and consume

content. The creators of content are typically highly engaged consumers and, as a

result, influential. If the proper influencers are reached with a message that they



perceive as valuable, it can become viral. This is tremendously powerful to marketers. It

can be a component of numerous business initiatives, including: Amplifying word-of-

mouth marketing, Market research, General marketing, Idea generation & new product

development, Co-innovation, Customer service, Public relations, Employee

communications and Reputation management.

4.3.3 Innovation



If your participation is consistent and honest, adds value by supplying useful content,

and appears personal, it will greatly innovate yours reputation while building trust and

credibility. New technology such as social networks and the consumer empowerment

accruing from them have created a new breed of consumers, forcing marketers to

consider how they communicate this value proposition to this group and engage with

them. Viral marketing can be described as a marketing technique that uses e-mail

messages containing powerful advertising messages and promotional offers that are

specifically designed for its recipients to forward to their family, friends, or others on

their e-mail contact list.



4.3.4 Applications

In this area,it required the availability of resources and variation. . Individuals of

all age groups spend hours on sites like Twitter and Facebook, watching videos on

YouTube and sharing photos on Flickr allowing marketers to be where the customers

are. A wide range of functions are available to these users such as, instant messaging,



emailing, blogging and networking via groups and events. Business owners were more

likely to use social media marketing (90+%) than employees working for a business

(81%). A significant 72% of marketers have either just started or have been using social

media for only a few months.Online marketing is done through search engine

(Google),facebook,twitter etc and online marketing strategies have increased.



4.3.5 Low Cost

Understanding whether or not Social Networking Sites (SNS) is the right form of

marketing for your business we first need to consider whether your business can afford

tradition marketing methods such as classified ads or other commercials. Business

owners need to assess their money and time and weigh them against the benefits that

they would be receiving through advertising on these sites as well as the drawbacks of

this type of marketing. According to, R. Elizabeth C. Kitchen, marketers can reach

millions of consumers from all walks of life which would ultimately be beneficial for your

business. Marketers can communicate directly with the consumers and receive honest

and frequent feedback about their products and services. Since most large companies

do not get a chance to directly interact with their consumers, social networking sites

provide this opportunity to the marketers.

4.3.6 Objectives and Problems

The objective of this report is to understand how effective marketing can be conducted

through Social Networking Sites and whether marketers can have a better

understanding of consumers and gain insight about their behavior through these sites

and Individuals remain entertained by Facebook as it provides them what interests them


http://contributor.yahoo.com/user/146297/r_elizabeth_c_kitchen.html


and expands their networks. The concept of friend-of-a-friend leads to increasing the

range of individuals who would be interested in a particular product thus enhancing the

organization’s popularity.

To make your product unique you have to come up with ideas that relate to your

consumers interests and prove to be of benefit to him. The traditional marketing method

does not encourage consumer involvement resulting in lack of much awareness and

knowledge about the products or services being offered. Considering the increasing

trend of social networking sites, a great opportunity lies for the marketers to avail and

provide their product to the right users. Online marketing on these sites would help in

building brands and generating leads or not. This paper focuses primarily on Facebook

presenting how advertising can be made effective through the social media and whether

marketers are capable of interacting with the consumers in a much better manner

through Social Networking Sites or not.

4.3.7 Environmental Factors

Social networking is defined as the grouping of individuals together into to specific

groups, often like a small community or a neighborhood. Although social networking is



possible in person, especially in schools or in the workplace, it is most popular online.

This is because unlike most high schools, colleges, or workplaces, the internet is filled

with millions, if not more, of individuals who are looking to meet other internet users and

develop friendships.

Facebook is a social networking website that allows users to communicate with friends

and exchange information. The site is free to users and generates revenue from

advertising and sponsored groups.



marketers to leverage on their popularity and market their products or services.

Data Analysis of Consumers’ survey

4.4 Data collection Process

In order to achieve best result in thisresearch both qualitative and quantitative

data were collected it is necessary to collect data from a set of non-respondents and



compare it with that which is freely supplied. Comparing the mean values of responses

for earlier returns with the means from later returns has the ability to reveal any

differences between the early and late responders who require prompting. It is assumed

that late respondents contribute to similarities with non-responders, and if no significant

differences exist, the chance is strong that non-response bias does not exist. The

survey questionnaire would include participant’s prolife: gender, age, education and the

ethnicity. We have selected a sample of about 100 Facebook users using a


advertising and there is no population frame to enable a random sampling process.

4.4.1 Frequency

In 2008 estimates that there was an 11 percent increase of people visiting social

networking sites between 2007 and 2008, with "79.5 million people—41% of the

U.S. Internet user population" visiting the sites in 2008[53].Furthermore, the trend

will continue, and, by 2013, the number will increase to 52 percent. According to

an e-Marketer study in 2008, nearly six out of ten United States users now

communicate with businesses and believe that the businesses must "interact with

their consumers" and "deepen the brand relationship" via social networking

website. Its big instrument for viral marketers that develop their process because



they can be driven by content integrated into consumer/user profiles and such

content is increased through new user acquisition and retention. Many members

believe that their friends in these sites are better resources than companies

advertising to buy products or services. Members of social networks serve two

roles; they both supply and consume content

4.4.2 Frequency of Outbound

Worldwide ad spending on SNSs is set to grow from $445 million in 2006 to $3.6 billion

by

2011(Williamson 2007). However, despite the bright prospect for social network sites,

there are reports that have indicated unexpected low advertising sales on SNSs

(Delaney et al. 2008). More effective advertising strategies are needed to be studied for

these sites in order to leverage on their fast-growing popularity. On the other hand, in

the research field, although researchers have started examining SNSs, most of them

placed their interests in impression management and friendship performance (e.g.,

Walther et al. 2008), networks and network structure (e.g., Liu et al. 2006), online/offline

connections (e.g., Lampe et al. 2006), and privacy issues (e.g., Jagatic et al. 2007).



SNS advertising effectiveness as well as the extent to which findings from prior

research on web advertising effectiveness can apply in the SNS context, has never

been systematically studied before. Therefore, this paper intends to close the gap by

examining the effectiveness of SNS advertising, and in particular, from the perspectives

of product endorsement on SNSs.



4.4.3 Purpose of social networking

The purpose of social networks is that it allows access to any target markets regardless

of geographic locations and thus provides a broad-based understanding of the market

realities, consumer perceptions and behavior which could be beneficial to marketers.



Leading companies such as Unilever, Xerox, P&G, Virgin, Toyota, JP Morgan, CISCO,

IBM, Burger King and Honda had successfully utilized social networking websites.

Facebook allows advertisers on their site to measure the effectiveness of their

advertising (i) through deep analytics where advertisers are able to track who is

engaging with their pages and how; and (ii) via optimization where advertisers can

adjust and refine their targets, budgets or creative instantly.



4.4.4 Commonly used social Media tools

By a long shot, Twitter, blogs, LinkedIn and Facebook were the top four social media

tools used by marketers, with Twitter leading the pack. All the other social media tools

paled in comparison to these top four.

Owners of small businesses were more likely to use LinkedIn than employees working

for a corporation. Another interesting finding was that men were significantly more

likely to use YouTube or other video marketing than women (52.4% of all men

compared



to only 31.7% of women).

A close examination of which tools experienced social media marketers are using

compared to those just getting underway provides further insight.

4.4.5 Change in behavior of using Facebook:

Push factors, such as peer pressure, were identified as being a strong influence upon

decisions to join a social network website. Many members special teenager typically join

the social network website such as Facebook because a friend invites them to join [6].

Some researchers believe external influence such as peer pressure is important

external determinants that should be accounted on participation in social network [40].

Social network websites grab more members and expand their network influence that

makes people connect together and participate in community.




If yes, then how often?

6 4.0 4.0 4.0

109 72.2 72.7 76.7

19 12.6 12.7 89.3

12 7.9 8.0 97.3

4 2.6 2.7 100.0

150 99.3 100.0

1 .7

151 100.0

0

daily

biweekly

weekly

monthly

Total

Valid

SystemMissing

Total


Percent

monthlyweeklybiweeklydaily0


120

100

80

60

40

20

0

Fre

qu

en

cy


YesNo

While sufering on facebook , do you see an advertisment?

120

100

80

60

40

20

0

Fre

qu

en

cy



4.4.6 Reasons for the change in marketing:

Marketers believe that members of social sites who shareinformation with other

members and friends are best target forparticipation in viral marketing. Their

involvement in thesesocial sites allows marketer to spread more the viral

contentbecause they naturally want to share information to othermembers and send

interesting content to friends.More than half of social network site users already

tellmembers of their social network about products they have used [29]. Online social

network members are also more interested in viewing the profile pages of companies

[29]. The online to reach groups of consumers who share common interests and

comments same viral messages that can be spread quickly by consumers who truly

share common interests and preferences.


48 31.8 32.0 32.0

102 67.5 68.0 100.0

150 99.3 100.0

1 .7

151 100.0

No

Yes

Total

Valid

SystemMissing

Total


Percent



4.4.7 Using Facebook

Both MySpace and Facebook retain the interest of their members by being useful to them and

providing services that are entertaining and/or helpful in expanding their networks. With 3

enough time and effort, it is theoretically possible to create a series of virtual-visual web based

networks of friends, starting with one individual and extending out to others. Due to the nature of

the medium, the friend-of-a-friend-of-a-friend idea underlying the development of such networks

can lead to a seemingly endless number of possibilities for interconnections.

Chating Making friends

Advertising Visiting Brand Pages

Buying products

0

20

40

60

80

100

120

4.4.8 Responding to an Ad on facebook

Many of the participants indicated that advertising on their online social networking sites

was acceptable, because it kept the use of the site free of charge. None of the

participants indicated that they avoid the ads because of undue clutter of advertising on

the sites:



"It doesn't really bother me because I never really notice the advertising" (girl, 22

years).

"You just don't really take notice of them [the advertisements], because they are there

all the time. It is like a conditioned response" (girl, 21 years).

yes no0

20

40

60

80

100

120

140

4.4.9 Fan of a Brand on Facebook:

The relevance of the product being advertised was an important issue for participants. Often,

viewing an advertisement that was not specifically targeted to their age group led the

participants to believe that all of the advertisements in this medium would not be relevant to

them:

"Generally, they're more real estate. Most of the genuine company ads are real estate

companies ... who sell for whatever reason, so I find it a lot more difficult to relate to the

real company ads because they don't really put like food advertising or



something like that on MySpace; it's just not the kind of thing I guess" (boy, 20

years).

Some participants acknowledged that the advertisements on their site were specifically

targeted to them on the basis of information they had provided on their site. However,

the majority did not see a link between their information (e.g., the type of sports, books,

and movies in which they are interested) and the type and brands of advertisements

displayed on their site. Some even believed that if the site was private, MySpace could

not use the information to target them

are you fan of any brnad on facebook?

74 49.0 49.3 49.3

76 50.3 50.7 100.0

150 99.3 100.0

1 .7

151 100.0

no

yes

Total

Valid

SystemMissing

Total


Percent



yes no0%

10%

20%

30%40%

50%

60%70%

80%

90%100%

4.4.10 Buying Product through Facebook

In this question, respondents were asked about the Because of their own experience,

participants knew how easy it was to set up a social network site and that anyone could do it.

They also knew that they could say whatever they liked or be whoever they wanted to be on

their social networking site, again on the basis of their own or their friends' experience. They

recognized that there was little regulation; therefore, they exhibited an inherent lack of trust, and

for them, online social network sites lacked credibility as a medium. Teenagers demonstrated

great skepticism of these sites and the advertising they carry: "So I 23 Journal of Interactive

Advertising Spring 2010 don't really take it seriously because it's a MySpace ad and it's usually

for the same stuff. Then there is the MySpace job [advertisements] and I don't really need a job"

(boy, 15 years). Another added, "So many people post dodgy bulletins, like spam bulletins, that



if you see one that looks real, you don't bother clicking on it because you know it's probably

going to be a spam. So you sort of lose your trust in it" (boy, 23 years).

Lack of Trust. The lack of credibility of online social network sites transferred to the

advertising on these sites. Many felt tricked by advertisers, not realizing they had

clicked on an advertisement. There was further distrust when brands sent

advertisements as comments to users of MySpace sites. Participants were reluctant to

give out personal details to companies:

"I don't trust them. In case you gave them your mobile number and they could send

you heaps of stuff and you'd have to pay for it and everything" (girl, 20 years).

"Sometimes ads get sent through comments. Like the company sends it through

comment, like to every person on your list, they'll send, it forms a virus on your page,

so it's all the ads and stuff" (girl, 30 years).

"They get your email address and your password and then they make bulletins from

your space and it just has a random heading and you click on it and just shows you the

ad" (boy, 26 years).



have you ever brought any product throgh facebook?

146 96.7 97.3 97.3

4 2.6 2.7 100.0

150 99.3 100.0

1 .7

151 100.0

no

yes

Total

Valid

SystemMissing

Total


Percent

yesno


150

120

90

60

30

0

Fre

qu

ency




4.4.11 Feedback to a product’s Homepage

Skepticism of advertising message claims: If consumers are skeptical of the claims

made by the advertisement or if these claims are not appropriate to the media

environment, they are likely to ignore the message and potentially disregard other

messages in this medium.

• Skepticism of online social networking sites as a credible advertising medium:

Consumers do not trust the information gained from online social networking sites. They

believe that online social networking sites lack credibility and perceive that there is little

policing of advertising claims in this medium.

yes no0

20

40

60

80

100

120

140



4.4.12 Effective way of Communication

The modern way of communication has changed drastically and for the good.

People are depending more on internet and social networking platforms to establish

contacts, share and interact with other. The platforms like Facebook, Twitter,

StumbleUpon, and many other blogs are the most popular ones used for sharing

information and establishing contacts.

do you think facebook is an effective means of communication?

6 4.0 4.0 4.0

35 23.2 23.3 27.3

40 26.5 26.7 54.0

31 20.5 20.7 74.7

18 11.9 12.0 86.7

13 8.6 8.7 95.3

6 4.0 4.0 99.3

1 .7 .7 100.0

150 99.3 100.0

1 .7

151 100.0

0

highly effective

effective

some how effective

neither effective norineffective

highly ineffective

ineffective

some how ineffective

Total

Valid

SystemMissing

Total


Percent



some howineffective

ineffectivehighlyineffective

neithereffective

norineffective

some howeffective

effectivehighlyeffective

0


40

30

20

10

0

Fre

qu

ency




Chapter 5

5.1 Discussion of Data Analysis:

We have developed a survey feedback form for this study. The questionnaire is

designed based on our concept of research model. The items adapted from previous

researchers on the concept of advertising on Social Networking Sites are considered.

The survey questionnaire would include participant’s prolife: gender, age, education and

the ethnicity. We have selected a sample of about 100 Facebook users using a


advertising and there is no population frame to enable a random sampling process. The

target population for the focus group that was conduct includes individuals from Karachi

only using Facebook on a regular basis.

We have then taken several measures to ensure data validity and reliability. The data

survey form was also distributed to Facebook users in Saudi Arabia, England and

Canada. The survey was revised for any potential confusing items before administrating

the pilot survey. The pilot survey thus provides an opportunity to analyze data without

any bias to maintain its validity and reliability. The pilot study was conducted using a

selected group of 10 individuals in Karachi having relations with the marketing on the



internet. Their remarks and suggestions were taken into consideration and evaluated

and those which were relevant were integrated into our survey. We then used our own

personal opinion poll management to assemble the data for this research.

To set up the non-attendance of non-response bias, it is necessary to collect data from

a set of non-respondents and compare it with that which is freely supplied. Comparing

the mean values of responses for earlier returns with the means from later returns has

the ability to reveal any differences between the early and late responders who require

prompting. It is assumed that late respondents contribute to similarities with non-

responders, and if no significant differences exist, the chance is strong that non-

response bias does not exist.

5.2 Social networking sites tool for an effective marketing approach :

The research question dealt with this area is related to the online advertisements on

social networking sites (SNS) , tool for an effective marketing approach . The related

hypothesis stated that :

H0 : Social Networking Sites are an effective tool for marketing.

According to a recent survey conducted by Red Bridge Marketing, approximately 1/3 of

the companies in the life science industry plan on incorporating some form of social



networking into their 2009 marketing plan. This represents a more than 100% increase

in companies who used social networking as part of their 2008 marketing plan. Most

frequently life science companies are leveraging social networks to increase brand

awareness, deliver product information to prospects/customers, and to increase sales.

H1 : Social Networking Sites are not an effective tool for marketing.

social networking sites offer marketers the opportunity to advertise or undertake PR

activities through electronic word-of-mouth (eWOM) - seen by many as the most

powerful application of social networking. At the launch of the Facebook Ads system,

which combines elements of WOM and advertising, Facebook CEO Mark Zuckerberg

enthused about a new era of pull marketing in which consumers would voluntarily

endorse the products and brands they like, where Facebook helps marketers in creating

highly effective ad campaigns (Klaassen, 2007). Such optimism is based on the well

documented fact that the persuasive power of marketing communications is enhanced

when it originates from a credible source such as a friend or family member (Slater and

Rounier, 1996).

5.3 Social networking sites are an effective mode of communication :

In this present study, the next question raised was about the awareness of people about

the online advertisements and medium of communication with the consumers regarding



those online advertisements . so , the hypothesis arised is as follows:

H0 = Social Networking Sites provides effective mode of communication to

consumer .

Research shows the believability or trustworthiness of the medium influences how the

consumer views the credibility of the information offered (Moore and Rodgers 2005).

Furthermore, if consumers do not trust or believe the media, they are less likely to pay

attention to either the content or the advertising (Johnson and Kaye 1998).

H1 = Social Networking Site does not provide effective mode of communication

to consumer.

Williamson in 2008 estimates that there was an 11 percent increase of people visiting

social networking sites between 2007 and 2008, with "79.5 million people—41% of the

U.S. Internet user population" visiting the sites in 2008[53].Furthermore, the trend will

continue, and, by 2013, the number will increase to 52 percent. According to an e-

Marketer study in 2008, nearly six out of ten United States users now communicate with

businesses and believe that the businesses must "interact with their consumers" and

"deepen the brand relationship" via social networking website. Its big instrument for

viral marketers that develop their process because they can be driven by content

integrated into consumer/user profiles and such content is increased through new user

acquisition and retention. Many members believe that their friends in these sites are



better resources than companies advertising to buy products or services. Members of

social networks serve two roles; they both supply and consume content are typically

highly engaged consumers and, as a result, influential. When one person who affects or

influences others perceives message as valuable, he or she could be turned into a viral.

This event make these website as powerful weapon for marketers, because users don’t

feel that the information is being pushed at them, but referred to them by a trusted friend

in a trusted network

5.4 Impact of online advertisements on (sns) on consumers :

• To make your product unique you have to come up with ideas that relate to your

consumers interests and prove to be of benefit to him.

• The traditional marketing method does not encourage consumer involvement

resulting in lack of much awareness and knowledge about the products or

services being offered.

• Considering the increasing trend of social networking sites, a great opportunity

lies for the marketers to avail and provide their product to the right users.

• Online marketing on these sites would help in building brands and generating

leads or not. This paper focuses primarily on Facebook presenting how

advertising can be made effective through the social media and whether



marketers are capable of interacting with the consumers in a much better manner

through Social Networking Sites or not.

New technology such as social networks and the consumer empowerment

accruing from them have created a new breed of consumers, forcing marketers

to consider how they communicate this value proposition to this group and

engage with them. Marketers can no longer rely on mass media channels to

“push” their communications to consumers in this new customer-focused

environment; they must embrace new strategies if they wish to succeed

(Sawhney and Kotler, 2001). The cost efficiency and the potential benefits that

can be derived from the consumer empowerment are two major motivators

behind the increasing use of social networks as marketing tools.

5.5 Recommendations and suggestions :

To maintain a level of trust and comfort businesses should not force their products or

services to the consumers. Services or products should only be provided when asked

for. Users have become blind to banner ads and pop up ads. They find them to be

highly irritating and have thus reduced their impact on consumers. Therefore, such ads

should be avoided and replaced by Social Media Marketing.



Marketers need to increase consumer involvement and make the consumers more

interactive in terms of building better relations with them. Social Networking Sites thus

provide this opportunity enabling marketers to introduce programs that will enhance

their interaction with the business and would enable marketers to promote products that

are of interest to these individuals. They will have a low cost in terms of product

promotion as compared to the traditional marketing methods and would be available to

a large consumer base. Providing discounts or promoting contests would help in gaining

more ideas and making more fans on the fan pages.

The first thing for marketers to attract consumers is to form an eye-catching profile page

reflecting what your business has to offer and how it is going to be different from other

businesses. The purpose of this page is to engage your consumer with useful

information but avoid over stimulating your page with too many pictures or videos.

Business should maintain statistical information about users in the form of tables or

graphs dividing them on the basis of their gender, interests, professions etc. this would

be helpful in locating prospects, generating lead, tracking down your potential

consumers and above all forecasting sales depending upon consumer interests.

Launching a new product can also be made easy by creating awareness before it is

actually launched. For small or new business receiving a quick feedback or being

recognized becomes very difficult. If these businesses develop their pages on Facebook



they will immediately be communicated among a large consumer base through word of

mouth marketing and would help you understand the psyche of your potential

consumers.

Negative feedback received through these pages can be acted upon immediately

helping businesses to come up o the user’s expectations



Chapter 6

6.1 Summary

One in three marketers indicated identifying the best practices, measuring

results and knowing where to begin as their top questions when marketing with social

media. As you can see by examining the above list, marketers have asked some

excellent questions. The remainder of this report will attempt to answer some of those

questions, including the most commonly used social media tools, those that are on the

growth path, the time commitment, and how social media marketing benefits

businesses that have been doing this for a while.

Technology has provided consumers with the means to control and edit the information

that they receive and share effectively, especially in the online environment. Although

previous studies have investigated advertising avoidance in traditional media and on the

Internet, there has been little investigation of advertising on social networking sites. This

exploratory study examines the antecedents of advertising avoidance on online social

networking sites, leading to the development of a model. The model suggests that

advertising in the online social networking environment is more likely to be avoided if

the user has expectations of a negative experience, the advertising is not relevant to the



user, the user is skeptical toward the advertising message, or the consumer is skeptical

toward the advertising medium.



Chapter 7

Conclusion, Limitations of the study

7.1 Conclusion

This study set out to understand how marketers are using social media to grow and

promote their businesses. On the following pages you will discover:

• The top 10 social media questions marketers want answered: We analyzed

nearly 700 open-ended responses and summarized all the major questions that

marketing pros want answered.

• The time commitment: We examined the weekly hours marketers invest in their

social media efforts. This analysis will be helpful for marketers just getting

started.

• The benefits of social media marketing: This rather beefy section reveals all

the major advantages marketers are achieving with their social media efforts. We

also looked at how time invested and experience enhances the achieved benefits.

• Commonly used social media tools: Wondering which social media tools

marketers are using the most? Those questions are answered, along with an

examination of what the most experienced folks are using.



• Social media tools people want to learn more about: In this section, we

examine the up-and-coming tools that marketers are most interested in learning

about.

• Other analysis: We also analyzed how age, gender, experience, business type

and weekly time commitments impact all of the above findings.

Businesses can successfully reach out to their Facebook users by making their profiles

on this site and encouraging suggestions and interaction with various individuals to

have a better understanding of what people perceive about their products and services

by giving rise to an engaging dialogue between both the parties. The process of

business advertising is relatively new on their social networking site. So, this would take

time in establishing and studies show that it has great potential of growing. Facebook

has a system of pay per click meaning that the advertiser would pay every time an

individual clicks on the advertisement. Individuals are more likely to pay attention to ads

that have been recommended by their friends rather than those that are not. Purchase

decision has a different impact in case of social networks as compared to brick-and-

mortar world. Individuals with high revenue are influenced by their friends in case of

decision making but individuals with low revenue are unlikely to be affected by any

social pressure or influence by their friends. If businesses start a viral campaign on

Facebook pages they can easily involve a number of users and for a relationship with



them within a short span of time. The following is an example of enhancing interaction

with Facebook users.

Advertising on Facebook is fairly reasonable and when you advertise a particular

product or service you prescreen potential customers. You understand what your

prospects like and what they don’t. This can prove to be valuable for you as it would

help you build a relationship with the user in a positive manner enhancing your business

profile. The concept of “One size fits all” is no longer popular. Facebook gets more

attention from marketers and is one of the fastest growing social networks.

7.2 Limitations of the Study and Future Research

One of the limitations of this study relates to the tie strength manipulation. Many

scholars embrace the idea that tie strength is a continuous concept with the closest

relationship at one end, acquaintance in between and strangers at the other end.

Similar to some studies examining the role of tie strength in the online context (Dhar

and Wertenbroch 2000), our study has adopted the two ends in order to facilitate

contrast of tie strength conditions.

However, through this way, ties that are in between of the continuum are not captured.

More levels of ties should be included in future to enhance the understanding “social

network” related endorser effectiveness. Besides, one concern about the current tie



strength manipulation is that the profile of a stranger is invisible to the users on

Facebook and therefore it is infeasible for a user to evaluate a stranger’s product

expertise. Future studies may focus on evaluating tie strength among a user’s friends

and focusing on friend product endorsement.

As this paper focuses on examining dyadic relationship between the endorser and the

consumer, all the factors are from an individual’s point of view. It is also highly possible

that “network structure” would be a significant factor that may impact endorsement

effectiveness. For example, consumers can form a complex social network through

social network sites. While this paper only considers the focal user’s friends as

endorsers, endorsers could also be the focal user’s friend’s friend. The tie strength

between the endorser and the consumer, as in the new case, would be stronger than if

they are strangers. The perception of the endorser’s expertise can also be significantly

affected by the opinion of their common friends. In the future, studies may be conducted

on examining the role of “network structure” on advertising effectiveness in social

networking sites.

In addition, our outcome- rather than process-oriented methodology does not examine

the thoughts that subjects spontaneously generate when exposed to the endorsement

and this individual differences are predicted to mediate the experiment outcomes.

Further research could examine from the target consumer’s characteristics to provide



additional support for the existence and effect of differential elaboration in product

endorser effectiveness.

Another limitation to this study is the online environment used for the experiment stimuli.

Due to technical

restrictions, the SNS pages used in the experiment are static rather than interactive.

Although the pages mimic the layout of the real pages, the lack of interactivity may

impact subjects’ responses. In the future, interactive or real SNSs environment should

be used to better examine consumers’ responses towards advertising on SNSs.

Although this paper has examined three relationships among the entities, it is of little

doubt that there are many other factors which may impact endorsement effectiveness.

Examining various factors that are applicable to social network sites would help

enhance the understanding of the product endorsement in that context.

7.3 Findings

The following data shows that:



The data clearly states that social advocacy of Homepage ads plays an important role in

enhancing the impact of Ad Recall, Awareness and Purchase Intent. When a Facebook

user advocates an ad, the ad is 4 times more likely to result in a purchase.

When individuals get to know about an ad through a friend user, its impact is likely to

increase by 3 times more showing that the impact of advertising increases to a great

extent on users.

Findings from the survey questionnaire and the focus group shows that a large number

of individuals have a Facebook account and a good number of individuals see ads on

the Facebook page and have liked pages of business profiles thus showing their

interest in the product or service. Individuals have not yet bought many products online

but the trend would continue with time as businesses would start gaining consumer

trust. Users also believe that Facebook has increased communication among various

individuals and this would help in communicating ideas and ads among each other.

Organizations have started carrying out competitions on Facebook which has attracted

a large number of audiences increasing their brand’s popularity among members.



The learning aspects of this research projects will facilitate our working in

professional life. Further research in this area further clarifies the concepts and

awareness of online advertisements on through social networking sites acting as an

effective tool for marketere. The findings of this research will act as bases for further

studies in this area.

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Market Research (Final Thesis on SNS )

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