Effectiveness of online advertising on social networking sites a case study of facebook

Effectiveness of Online Advertising on Social Networking Sites- A Case Study on Facebook Student Name: Mitun Dutta Programme: Master of Business Administration Institute: Cardiff Metropolitan University Submission Date: January 2013 Mitun Dutta I Electroniccopy copy available available at: Electronic at:https://ssrn.com/abstract=2357623 http://ssrn.com/abstract=2357623 Declaration I declare that this dissertation titled “Effectiveness of Online Advertising on Social Networking Sites- a Case Study of a Small Business Organisation’s advertising on Facebook” has been done by me and has not already been accepted in substance for any degree and is not concurrently submitted in candidature for any degree It is the result of my own independent research except where otherwise stated Candidate Signature: Mitun Dutta Date: 18 January 2013 Mitun Dutta II Electroniccopy copy available available at: Electronic at:https://ssrn.com/abstract=2357623 http://ssrn.com/abstract=2357623 Abstract The purpose of this dissertation is to investigate and find out the benefits of online advertising on social networking sites such as Facebook in Bangladesh The mode of advertising and the perspective of Marketing have been changing to reach quick and easily near to customer door From 1999 to 2012, IAB reports show that the internet advertising revenues hit historically at nearly $9.3 billion Digital Marketing is a highly effective medium for interacting and engaging to the consumers, through social media consumers play no longer as passive but are more active participants in contemporary online media The online advertising is an increasingly important component of public relations, organisations use social network sites to build relationships with key publics, provide a variety of organisational information The proposed study aims to discuss a brief overview of the market of social network advertising and to determine the effectiveness of advertisements on social networking to attract customers The online business in Bangladesh has just been moving positively where per cent of total population are active internet user and 1.9 per cent of total population are using Facebook (By IWS, September 2012) A qualitative research with case study design has been used to find out the total effectiveness of online advertising on Bangladesh marketing system using of social networking site Facebook The data have collected from several media, from own website and from Facebook advert page before data been organised by the help of SPSS The outcomes from this research are not enough to justify the whole scenario of Bangladesh online marketing facilities A single marketing organisation like bikroy.com has just launch no more than two years In the recommendations section Bangladesh would be a great area to make any organisation profitable by using of social networking sites like Facebook Online advertising are getting benefited as the internet user are increasing rapidly in Bangladesh Mitun Dutta III Electronic copy available at: https://ssrn.com/abstract=2357623 Acknowledgments It is a great pleasure to thank everyone who helped me to finish the dissertation successfully I am sincerely and heartily grateful to my supervisor, Md Jahidul A Khan, for the very important support and guidance to complete my dissertation writing Without his assistance it would not be possible to complete this works I wish to thank my professors Reza Aboutalebi, Isobel Wood and Dr Tereska Karran and all employees and customers of Bikroy.com who had work hard to finish the questionnaire I would like to thank my family- my mother, [Anima Dutta], my father, [Mohit Dutta], my sister, [Lucky Dutta], my uncle, [Asit Sarker] and all my relatives for their love and support I also take this opportunity to express gratitude to all my friends and my colleagues who tolerated me while I talked about online advertising on Facebook Mitun Dutta IV Electronic copy available at: https://ssrn.com/abstract=2357623 Table of Contents Declaration II Abstract III Acknowledgments IV Table of Figures VIII List of Tables IX Chapter 1: Introduction 1.1 Introduction 1.2 Background 1.2.1 Introducing bikroy.com online organisation 1.2.2 Rationale for choosing bikroy.com 1.2.3 Scope of research 1.3 Research Rationale 1.4 Research Question, Aim, Objectives & Hypotheses Research Questions Aim and Objectives of the study 1.5 Research Access, Limitations & Resources 1.6 Chapter Summary Chapter 2: Literature Review 10 2.1 Introduction 10 2.2 Define Social Media 12 2.3 Social Media Classification 13 2.4 Social Media Tools 13 2.5 Social Network Sites 14 Mitun Dutta V Electronic copy available at: https://ssrn.com/abstract=2357623 2.5.1 Facebook 17 2.5.2 YouTube 18 2.6 Internet User in Bangladesh 19 2.7 Online Advertising 20 2.8 Type of online advertising 20 2.9 Growth in Online Advertising 21 2.10 Reasons for Growth of Online Advertising 22 2.11 Benefits of Online Advertising 23 2.12 Chapter Summary 23 Chapter 3: Research Methodology 25 3.1 Introduction 25 3.2 Research Question, Aim and Objectives 26 3.3 Importance of the research 27 3.4 Research Philosophy 28 3.5 Research Approach 29 3.6 Research Design 30 3.7 Research Strategies 31 3.7.1 Case study 31 3.8 Time Horizon 32 3.9 Research Instruments 32 3.10 Validity and Reliability 33 3.11 Research Access, limitations 33 3.12 Ethical Considerations 34 3.13 Chapter Summary 34 Chapter 4: Findings & Analysis 35 Mitun Dutta VI Electronic copy available at: https://ssrn.com/abstract=2357623 4.1 Introduction 35 4.2 Participants in the Research 35 4.3 Data Analysis Method 36 4.4 Summary of the Primary Data Collected 40 4.5 Analysis of Primary Data 42 4.6 Chapter Summary 45 Chapter 5: Discussions 46 5.1 Introduction 46 5.2 Findings with literature 46 5.3 Chapter Summary 49 Chapter 6: Conclusion & Recommendations 51 6.1 Introduction 51 6.2 Summary of the Main Findings 51 6.3 Coverage of the Research Question, Aim & Objectives 51 6.3.1 How much advertising on social networking is effective in sales for companies? 51 6.3.2 Which is the most preferred approach for advertising on social networking websites? 52 6.3.3 How a customer like is approached by advertisements on social networking sites? 52 6.4 Recommendations for Improvements (to the selected company) 53 6.5 Recommendations for Further Research (suggested research titles, methodology, or scope) 53 6.6 Chapter Summary 54 References 55 Mitun Dutta VII Electronic copy available at: https://ssrn.com/abstract=2357623 Table of Figures Figure 1: Facebook advertising revenue up 36% to $1.09 Figure 2: The English bikroy.com website source bikroy.com (Source: bikroy.com) Figure 3: The bikroy.com Facebook page (Source: Facebook.com) Figure 4: Digital Marketing Activities of Companies in Mexico, Aug 2012 (Source: IAB) 11 Figure 5: Classification of Social Media (Source: Kaplan, AM & Haenlein, M 2010) 13 Figure 6: Launch Date of Social Network Sites (Source: Boyd, D and Ellison, N., 2008) 15 Figure 7: Top Social Network Sites October 2012 (Source: MarketingChart, 2012) 16 Figure 8: Facebook users in the world by regions (Source: Internet World Stats, 2012) 18 Figure 9: Number of Facebook user in Bangladesh (Source: SocialBakers, 2012) 19 Figure 10: Online advertising revenue since 1999 to 2011(Source: PrivewaterhouseCoopers PWC) 21 Figure 11: Top UK online Publishers and Advertisers (Source: ComScore, 2012) 22 Figure 12: Research Onion Model (Saunders et al 2009) 26 Figure 13: Triangulation Method (Source: Creswell, 2003) 33 Figure 14: The gender percentages of bikroy.com on Facebook page 37 Figure 15: Age distribution for Facebook user in Bangladesh (Source: socialbakers, 2012) 37 Figure 16: Bikroy.com like page on Facebook (Source: Facebook) 38 Figure 17: Bikroy.com About page on Facebook (Source: Facebook) 39 Figure 18: The total number of internet, Facebook and bikroy.com users in Bangladesh (Source: Primary data) 40 Figure 19: The top five brands movers on Facebook- in Bangladesh (Source: Primary Data) 41 Figure 20: Bikroy.com monthly user on Facebook (Source: Facebook) 42 Figure 21: Bikroy.com Facebook page hits per users (Source: Primary data) 43 Figure 22: The number of products posted in bikroy.com website from different cities of Bangladesh (Source: Primary Data) 44 Mitun Dutta VIII Electronic copy available at: https://ssrn.com/abstract=2357623 Figure 23: The bikroy.com on Facebook fan page ‘like’ button on main website 45 List of Tables Table 1: Tradition advertising platform downward slope from 2006 to 2008(Source: Advanced Internet Policy Report, 2009) Table 2: Internet Users percentage in Bangladesh (Source: Internet World Stats, 2012) 19 Table 3: Research Process (Source: Clegg, 2002) 25 Table 4: Methods of Payment (Source: Primary Data) 41 Mitun Dutta IX Electronic copy available at: https://ssrn.com/abstract=2357623 Chapter 1: Introduction 1.1 Introduction The new kind of online advertising is becoming popular with the social networking communities eMarketer projects about online advertising revenue from social network sites will peak up more than 11 per cent than last year Facebook has more than one billion users and is the largest social networking sites now In 2012 Facebook earned more than 1.09b US dollars, a 36 per cent increase by last year Facebook has many options to earn money such as gifts and payments but advertising is the most dominant part of Facebook revenue generator Figure 1: Facebook advertising revenue up 36% to $1.09 Mitun Dutta Electronic copy available at: https://ssrn.com/abstract=2357623 Chapter 6: Conclusion & Recommendations 6.1 Introduction The main summary of this study was identifying the effective way of online advertising on Facebook The study gave a model of online advertising on Facebook In Bangladesh bikroy.com has no treats as there is no other company has launch to bid it So the model of advertising on this study can developed any organization 6.2 Summary of the Main Findings Facebook or social networking media are developing every day to make users easy to access Face book Ads is a common targeting advertising formation based on nonpersonally-identifiable data and derived from customer’s profile It is a standard targeting stage that conveys the message for certain group by ensuring their Characteristics and interests The research also highlighted the features of online advertising modes, commitments, trainings, personal privacy protect The lack of information of any products can be make loss for an organization Online advertising campaign and seminar can make awareness to the people Promotions, seminars, training about social media marketing can change the online business 6.3 Coverage of the Research Question, Aim & Objectives 6.3.1 How much advertising on social networking is effective in sales for companies? The online advertising growth in Bangladesh can dramatically change if the product information and customer service are giving properly The organizations have to be some special safety and protect fraud from online payment system The advertiser should be confidence about what they talking about As social network sites are popular and spreading over people like daily bases, therefore online advertising can make more sales profits of a company The internet is an important part of any areas Mitun Dutta 51 Electronic copy available at: https://ssrn.com/abstract=2357623 to set up an online business Faster internet connection facility will help the increase sales of a company 6.3.2 Which is the most preferred approach for advertising on social networking websites? Customers always want some simple way to find out the real product information Facebook is the most popular website among all the others A clear communication is the important role of any company to reach customer door Using free opportunity on Facebook and targeting the proper audience can be a good approach The business strategy should be kept on when using social networking sites A company should have different strategy if the online advertising on Facebook has destroyed Wrong and incorrect information can be a bad manner on social media Always have filter product information checking To work with internet business, the people of the organizations should have a clear idea about the areas of benefits 6.3.3 How a customer like is approached by advertisements on social networking sites? The given advertising on social media should be design by thinking of social awareness The social media information is spread by user to user As the product information shares, recommends, invites to join the page therefore product design is necessary part of advertising Mitun Dutta 52 Electronic copy available at: https://ssrn.com/abstract=2357623 6.4 Recommendations for Improvements (to the selected company) The bikroy.com organization is a new upcoming online customer service brands which provides a large number of products The product are selling and buying through of the organizations Bikroy.com is an online business company but in there website there is no specific contact details The company can put the email address and the customer related telephone service There is no option to pay via bikroy.com Customer cannot any product if the location is from one city to another city Bikroy.com can provide the help by using of PayPal service to online customers which will be time consuming for them Organizations can list some positive sellers who are trustable and reliable to buy from them There are no options of delivery If any customer choice a product which price is low and the location of the product is too far from the buyer, then it is not possible to get the product from that location by losing time and transport fares 6.5 Recommendations for Further Research (suggested research titles, methodology, or scope) The research was about online business advertising using Facebook In Bangladesh bikroy.com is the first online company who dealing with second hand products to sell and buy The following topics can be study for the further research,  Internet business for new companies  Critical evaluation of online payment safety for company A  Critical evaluation of Facebook advertising  How does Facebook advertising make user more cash?  A case study of Information technology of an online Business company  Analysis Government help to online business The recommendations for further study can be conducted by quantitative methodology The topic has a vast area to research online advertising nature using Facebook Mitun Dutta 53 Electronic copy available at: https://ssrn.com/abstract=2357623 6.6 Chapter Summary The research was done by case study just focused only one specific company, therefore there are some limitation has created The data and focusing part of this research can be used for next time The study will help the organizations who want to online business using social networking sites Mitun Dutta 54 Electronic copy available at: https://ssrn.com/abstract=2357623 References Advanced Internet Policy Report Online Advertising: Confronting the Challenges, 2009, Policy Engagement Network, Available from: http://www.lse.ac.uk/collections/informationSystems/research/policyEngagement/ad vertising_paper.pdf Boyd, Danah and Ellison, Nicole, 2007, Social Network Sites: Definition, History and Scholarship, Journal of Computer-Mediated Communication, Vol 13(1) Bryman, A and Bell, E (2007), Business Research Methods, (2nd ed.), Oxford: Oxford University Press Clemons Eric K., Barnett Steve , Appadurai Arjun, 2007, The Future of Advertising and the Value of Social Network Websites: Some Preliminary Examinations, In ICEC '07: Proceedings of the ninth international conference on Electronic commerce, New York, ACM, pp 267-276 Iyengar Raghuram, Han Sangman, Gupta Sunil, Do Friends Influence Purchases in a Social Network?, 2009, Harvard, Harvard Business School, Available from: www.hbs.edu/research/pdf/09-123.pdf Jothi P Sri, Neelamalar M and Prasad R Shakthi, 2011, Analysis of social networking sites: A study on effective communication strategy in developing brand communication Journal of Media and Communication Studies, Vol 3(7), pp 234-242, Available from: http://www.academicjournals.org/jmcs Kaur, Inderjit, 2008, Online social networking as and advertising medium: footwear sales industry, Ireland, Available from: http://hdl.handle.net/10788/110 Mitun Dutta 55 Electronic copy available at: https://ssrn.com/abstract=2357623 Mrinal Todi, 2008 , Advertising on Social Networking, Wharton Research Scholars Journal Websites University of Pennsylvania, Available from: repository.upenn.edu/wharton_research_scholars/ Spence, P (2010) Website Marketing with Social Networking Get Web Traffic with Facebook, MySpace, and Twitter Word of mouse: Will Facebook, MySpace and other social-networking sites transform advertising? Nov 8th 2007, Sun Francisco, Economist, Available from: http://www.economist.com/node/10102992?story_id=10102992 Mrinal Todi, 2008 Advertising on Social Networking, Wharton Research Scholars Journal Websites University of Pennsylvania, Available from: repository.upenn.edu/wharton_research_scholars/ Advanced Internet Policy Report Online Advertising: Confronting the Challenges, 2009, Policy Engagement Network, Available from: http://www.lse.ac.uk/collections/informationSystems/research/policyEngagement/adv ertising_paper.pdf http://www.emarketer.com/Article.aspx?R=1009448#rgm0J62aeLZrRlQh.99 Boyd, D and Ellison, N., 2008 Social Network Sites: Definition, History, and Scholarship Journal of Computer - Mediated Communication International Communication Association, (13) 210–230 Kaplan, AM & Haenlein, M 2010, Users of the world, unite! The Challenges and Opportunities of Social Media Mitun Dutta 56 Electronic copy available at: https://ssrn.com/abstract=2357623 Safko, L and Brake, D., 2009 The Social Media Bible: Tactics, tools & Strategies for Business Success John Wiley & Sons New Jersey, USA Morris, R., 2010 Social media and your business Business & Finance Ireland 58-59 Romero, M & Fanjul, C., 2009 La publicidad en la era digital: el microsite como factor estratégico de las campañas publicitarias on-line (Spanish) Comunicar, 17(33), 125-134 Bernoff, J, 2010 Introducing the new social technographics http://worldtheory.blogspot.co.uk/2007/06/define-virtual-world.html Judy O'Connell, Judy O'Connell & Dean Groom, 2010 Virtual Worlds: Learning in a Changing World Prof David Gibson, 2007 Games And Simulations in Online Learning: Research And Development Frameworks Michael P Sauers, 2006 Blogging and Rss: A Librarian's Guide Porter, M., 1998 The Michael E Porter trilogy., New York; London: Free Press http://searchengineland.com/august-search-share-bing-hits-all-time-high-133021 https://www.emarketer.com/Coverage/Mobile.aspx Paul Haigh, 2010 Social Network Websites: Their Benefits and Risks [eBook] Mitun Dutta 57 Electronic copy available at: https://ssrn.com/abstract=2357623 Zizi A Papacharissi, 2011 A Networked Self: Identity, Community and Culture on Social Network Sites Alan E Mislove 2009 Online Social Networks: Measurement, Analysis, and Applications to Dan Zarrella, Alison Zarrella, 2011 The Facebook Marketing Book http://newsroom.fb.com/Key-Facts David W Schumann Esther Thorson, 2007 Internet Advertising: Theory And Research UK advertising industry (IAB/PwC,October 2008) http://www.iabuk.net/research/library/online-facts-figures 01/02/2008 Interactive Advertising Bureau (IAB) and prepared by PwC US http://www.iab.net/about_the_iab/recent_press_releases/press_release_archive/press_r elease/pr-101112 http://www.forbes.com/sites/roberthof/2012/06/11/online-ad-revenue-growthslowing/ http://www.iabuk.net/about/press/archive/uk-internet-adspend-increases-144-to-48billion http://www.kronikmedia.co.uk/blog/growth-of-internet-marketing-top-factors/406/ http://www.webpronews.com/continued-growth-for-online-advertising-2008-10 Mitun Dutta 58 Electronic copy available at: https://ssrn.com/abstract=2357623 http://www.guardian.co.uk/media/2010/jun/02/iab-europe-online-advertising-growth http://www.impliedbydesign.com/articles/the-advantages-of-internet-advertising-vstraditional-advertising.html R Kumar (2011), Research Methodology: A Step-by-Step Guide for Beginners Johnson, B and Christensen, L (2010), Educational Research: Quantitative, Qualitative and Mixed Approaches Mrinal Todi (2008), Advertising on Social Networking, http://www.uniteforsight.org/ Robert C Meir, William T Newell and Harold L Dazier: Simulation and Economics Robert K Yin (2008): Case Study Research: Design and Methods John W Creswell (2012): Qualitative Inquiry and Research Design: Choosing Among Five Approaches Mark N K Saunders, Philip Lewis, Adrian Thornhill (2009): Research Methods for Business Students M Trusov, R E Bucklin, K Pauwels 2008: Effectiveness of Word- of- Mouth versus Traditional Marketing Gay Morris 2007 S Rajasekar, P Philominathan, V Chinnathambi: Research Methodology S M Aqil Burney (2008): Inductive & Deductive Research Approach Nahid Golafshani (2003): Understanding Reliability and Validity in Qualitative Research John W Creswell (2003): Research Design: Qualitative, Quantitative, and Mixed Methods Approaches Carrie Williams (2007): Research Methods Mitun Dutta 59 Electronic copy available at: https://ssrn.com/abstract=2357623 Questionnaire Effectiveness of Online Advertising on Social Networking Sites- A Case Study of a Small Business Organisation on Facebook Employee: Gender: a) Male Occupation: a) Business Age: b) 18-25 a) under 18 Education Level: b) Female b) Service c) 25-40 a) Undergraduate c) Student d) above 40 b) Graduate c) Others Questions: Management has a clear idea about the vision of company Agree Disagree The business plan is used and up to date Agree Mitun Dutta Disagree Electronic copy available at: https://ssrn.com/abstract=2357623 The company has a clear mission Agree Disagree Marketing strategy are changing look after loss or profit Agree Disagree Sales team are well informed Agree Disagree Training on online information and advertising held Agree Mitun Dutta Disagree Electronic copy available at: https://ssrn.com/abstract=2357623 Team work follow to get full potential Agree Disagree Pay rise and promotion are giving Agree Disagree Customer get the proper information Agree Mitun Dutta Disagree Electronic copy available at: https://ssrn.com/abstract=2357623 Questionnaire Effectiveness of Online Advertising on Social Networking Sites- A Case Study of a Small Business Organisation on Facebook Customer Service: Gender: a) Male Occupation: a) Business Age: b) 18-25 a) under 18 Education Level: b) Female b) Service c) 25-40 a) Undergraduate c) Student d) above 40 b) Graduate c) Others Questions: Do you use internet? a) Yes b) No Do you have Facebook user ID? a) Yes b) No Do you know Bikroy.com Company? a) Yes b) No How you know bikroy.com? a) Facebook b) google c) television d) newspaper e) others Do you like the Facebook fan page of bikroy.com?(If you have a Facebook ID) a) Yes Mitun Dutta b) No Electronic copy available at: https://ssrn.com/abstract=2357623 Are you sell or buy products from bikroy.com? a) Seller b) Buyer How you pay the money? a) Cash b) Cheque Rank the business strategy on a scale of from the following parameters? a.) Easy to post ads Excellent Neutral Poor b.) Product information Excellent Neutral Poor c.) Payment options Excellent Neutral Poor d.) Delivery options Excellent Neutral Poor e.) Price Excellent Mitun Dutta Neutral Poor Electronic copy available at: https://ssrn.com/abstract=2357623 f.) Online customer service Excellent Neutral Poor g) Business experience with bikroy.com Excellent Mitun Dutta Neutral Poor Electronic copy available at: https://ssrn.com/abstract=2357623 ...Declaration I declare that this dissertation titled ? ?Effectiveness of Online Advertising on Social Networking Sites- a Case Study of a Small Business Organisation’s advertising on Facebook? ?? has... Case study approach will be taken as a research strategy to explore and validate the data of online advertising effectiveness in Facebook site by the eBay company 3.7.1 Case study Case study. .. method and the information also very limited Observation data collection method considers as nature of investigation Secondary data are also important to precise the primary data as these data are