University Ss.

Cyril and Methodius Skopje

Faculty of Economics
Department: E-Business

Graduate Work
Impact of social networks in e-business in general and in
Macedonia

Table of Contents
Introduction ...............................................................................................................................3
1. Importance of social networks ............................................................................................4
2. Uses of social networks in e-business...............................................................................6
3. Impact of social networking in e-business ......................................................................8
3.1 Achieving Goals from social networks in e-business. ........................................................8
3.2 Forces of applying social networking in e-business ...........................................................8
3.3 Social Networking opportunities and challenges in e-business environment .................9
4. Advantages and disadvantages of using the social networks in e-business ......10
5. The effective use of social networking sites to generate sales.................................12
5.1 Using social networks to advertise an online business ....................................................14
5.2 Value creation .....................................................................................................................24
Conclusion ...............................................................................................................................25
References ................................................................................................................................26

Introduction

In todays connected age, we don't need to look far to see that social relations are critical to personal
and professional success. Yet, no other word in the business world is so misleading and
misunderstood than networking. Most of us rarely think carefully enough about what networking
really means or look far enough to understand just why and how social networks affect personal and
professional outcomes.
Although relatively new on the scene, social media is spreading fast. By some estimates, social
networking now accounts for 11 percent of all time spent online in the US. Between December
2008 and December 2009, total visits to the top 10 social networking sites increased 63 percent.
Nearly one in 10 Internet visits ends up at a social network; nearly one in four page views is on a
social networking site1.
Whether we like it or not, social networks have become part of our Internet lives. Whenever we go
online, we open e-mail, instant messenger, social networks and start interacting. As new
developments occur, these immediately get announced through e-mail, fora, social networks and
blogs. This simultaneous promotion effort drives not only traffic, but also push awareness on search
engines.
The use of social networks in e-businesses make it possible to spread the word on what they do
through trusted friends. Now that the Internet is affordable and easily accessible through mobile
phones, doing e-commerce has never been this exciting and competitive.
Social networks have a major influence in the field of e-commerce or e-business today. Classmates,
LinkedIn, Twitter, MySpace and Facebook, among others, are becoming powerful platforms to meet
other people and get recommendation on services or products to purchase online.
This paper elaborates social networks in terms of their use in the business world to increase the
efficiency and effectiveness in operations.
And also will be displayed the use of social networks in the domestic company Nevada from
Skopje.

1 SAS Institute inc., White paper: Social Media Metrics: Listening, Understanding and Predicting the Impacts of
Social Media on Your Business, http://itresources.whatis.com/document;5147528/tech-research.htm

1. Importance of social networks

Social Networks2 are online communities where people meet, socialize, exchange digital files, etc.
These sites are often used to launch new bands and to promote TV shows and movies through viral
marketing. The most popular examples of social networks are Classmates, LinkedIn, Twitter,
MySpace and Facebook.
Networking online allows people to be more open about their thoughts and feelings without
worrying about face-to-face criticism or rejection. To walk away from an online social network is as
easy as turning off your computer.
Social networking sites can be public, private or a combination of the two. Public sites allow
anyone to become a member and anyone has access to anything posted. Private sites are just that -non-public channels that require users to register and meet certain criteria to become and remain a
member. All information exchanged on the site is private. Channels that are a combination of the
two allow prospective members to see what type of group it is without having access to any other
member's personal information.
New social networking sites are popping up every day, but all of them don't draw in the traffic to
make them hits. Some of the more popular sites include:
Classmates:One of the first social networking site created in 1995, more than 40 million
registered members worldwide use this site to connect with former classmates, co-workers
and military personnel.
LinkedIn:What is a social network that deals only with business? LinkedIn may be one of
the largest of this type of networks with more than 17 million registered users across 150
industries and 400 economic regions.
Twitter:Describes itself as, a service for friends, family, and coworkers to communicate
and stay connected through the exchange of quick, frequent answers. Twitter is just
communication in a new shape, but its also a platform for listening to the communication of
others in new ways.
MySpace :The biggest social networks online with more than 200 million users, MySpace
site helps people connect on a variety of levels.
Facebook:One of the larger social networks originally designed as a means for college
students to connect with one another. Today, there are more than 58 million users on
Facebook.
Social networking3 is the grouping of individuals into specific groups, like small rural communities
or a neighborhood subdivision. Although social networking is possible in person, especially in the
workplace, universities, and high schools, it is most popular online. This is because unlike most
high schools, colleges, or workplaces, the internet is filled with millions of individuals who are
looking to meet other people, to gather and share first-hand information and experiences,
developing friendships or professional alliances, finding employment, business-to-business
marketing. The topics and interests are as varied and rich as the story of our world.
2 http://www.sag.org
3 http://www.whatissocialnetworking.com/

When it comes to online social networking, websites are used. These websites are known as social
sites. Social networking websites function like an online community of internet users. Depending
on the website in question, many of these online community members share common interests in
hobbies, religion, or politics. Once you are granted access to a social networking website you can
begin to socialize. This socialization may include reading the profile pages of other members and
possibly even contacting them.
One of the benefits includes diversity because the internet gives individuals from all around the
world access to social networking sites. This means that although you are in the United States, you
could develop an online friendship with someone in Denmark or India. Not only will you make new
friends, but you just might learn a thing or two about new cultures or new languages and learning is
always a good thing.
Social networking often involves grouping specific individuals or organizations together. While
there are a number of social networking websites that focus on particular interests, there are others
that do not. The websites without a main focus are often referred to as "traditional" social
networking websites and usually have open memberships. This means that anyone can become a
member, no matter what their hobbies, beliefs, or views are. However, once you are inside this
online community, you can begin to create your own network of friends and eliminate members that
do not share common interests or goals.
There are dangers associated with social networking including data theft and viruses, which are on
the rise. The most prevalent danger though often involves online predators or individuals who claim
to be someone that they are not.
Social network sites have become very popular. Many people use a social site to stay in touch with
family and friends like Classmates, LinkedIn, Facebook,Myspace,Twitter.Many people also use
social sites to keep in touch with business contacts. There are a number of social sites that help;
many are not-for-profit though there are some that are for profit. There are social sites for
everything from helping to make people smarter to educating people on the truth about alcohol and
marijuana to ending world hunger and poverty.

2. Uses of social networks in e-business

People used social networks in their business operations and in their personal lives. No matter how
people use them, they likely are using at least one social network. These networks engage people.
They bring a very large world together in a simple and easy way. In addition, they are often free to
use, which makes them ideal for small and large businesses. Most businesses find a variety of
benefits in using social networks in as many ways as they can. They can be used for any type of
interaction with other people or businesses, when communication is important. They allow to
individuals to share knowledge, gather information and to meet others they may even become
friends with. In short, they can be used for virtually any type of communication need available.
The Anderson4 researchers discovered that there were four basic types of social network users:
The Fun-seekers:These are the people who enjoy taking the quizzes, playing games and
posting YouTube videos. These folks use social networking as a remedy for boredom.
The Business Users:The business users are people who are promoting a service or product.
However, they usually do it by providing updated information, as opposed to actively
pushing the product.
Social media mavens:These are the social media experts, who either work for a company,
or whose job involves analyzing social media trends.
Late followers:As their name implies, late followers come to the social networking scene
after all their friends have done so. In some cases, they might get very involved in social
networking. However, since many really had no interest in joining in the first place, they
might create a profile, but rarely use the network.
Social networks are suitable for use by small and medium enterprises because they don't have
developed detailed organizational structure for business processes. There are so many ways to use
social networking in a e-business environment, and so many benefits of doing so5:
Inexpensive Marketing:One of the best reasons for using social networks as a small
business owner is the increased attention and marketing it provides to the business with little
to no cost. By using social networking online, there are very few overhead or advertising
costs, outside of the cost of a website.
Banner and Text Ad Advertising:Some businesses are using social networks for low cost
banner ads because social networks are highly effective websites that attract millions of
visitors daily, providing the business with excellent exposure.
4 Craig A. Anderson ,Users of social networks, Media cosumption, http://socialnetworking.lovetoknow.com
5 What are social network ued for, http://socialnetworking.lovetoknow.com/

 Customer Relation Management Tool:Social Networking Webside and related tools allow
management to speak with, ask questions, answer questions and overall interact with their
customers as never before. Now, a small business online can personally connect with their
customers.
Global Exposure:A television ad or similar marketing method on an international scale
would costs millions of dollars, but the same can be accomplished online for next to
nothing. Also, because these tools allow businesses to interact with people worldwide, they
are highly effective at achieving global response.
Online Meeting Places:Social networks work well as online meeting places for industry
experts to meet and discuss various aspects of their business. It also allows for various
industries and niches to explore other professionals that could aid them in growing their
business. For example, a remodeling business can network with a window wholesaler.
The various ways that social networking is used continues to play a role in the overall profitability
of many businesses, both those businesses that are solely online and those that are both online and
offline.
Benefits from the use of social networks in e-business contribute to:
-

improve the customer images of the business.

help a business to get feedback on new products and services.
help connect friends, family and long lost college friends.
Social networks allow for idea sharing and the creating dialog.
Social networking allows people to network with others in order to find jobs.

But social networks have some drawbacks.Some individuals do not have the ability to build their
network successfully, for some reason, which hampers them from seeing any of the associated
benefits listed above. They can also allow people who do not normally need to network to do so
more easily. For example, it is very easy for employees to chat with employees from rival
companies. Many have attributed social networks to the breakdown of professionalism in the
workplace.

3. Impact of social networking in e-business

Social networking is helping online enterprises become more focused on their customers than ever
before. Businesses are finding out what people want and delivering those things much more quickly.
Company executives believe they have more control over their businesses' reputations on the
Internet because they can influence people's perceptions in cyberspace. This also applies to how an
online company is viewed by suppliers and as a competitor to other companies. Social networking
technology can help online businesses learn more about what their competition is doing and respond
rapidly.
Customers who participate in social networks are feeling more empowered in their interactions with
eBusinesses. People are seeing businesses responding to the opinions people post online and that
makes customers feel like they're having more influence on businesses' behavior.
3.1 Achieving Goals from social networks in e-business.
The continued growth of social networking technology is helping more businesses achieve goals
that had previously been almost unreachable. Before the advent of social networks, viral marketing,
in which friends or associates recommended products and services to each other, was considered
more of an ideal than a reality. Today, companies can call word-of-mouth marketing a proven
phenomenon.
Social networking is reducing eBusinesses communication expenses, especially for online
businesses that maximize their use of the technology. Direct messaging, chat rooms and blog
features on these networks have all lowered the cost of communicating within an online business.
The savings are often greater for conversations with suppliers and customers, where businesses can
replace long-distance phone calls with free online messaging. Employees are more quickly finding
colleagues and partners who possess desired knowledge, and just as readily exchanging that data.
Similarly, customers can find answers to their questions without the lengthy waits associated with
telephone customer service.
Ebusinesses continue to gain more efficiencies as the number of people using the technology grows.
Companies are maintaining one-to-one marketing strategies regardless of how large the number of
customers or partners involved gets.These networks are making recruitment efforts more precise
and reducing the cost and time involved in recruiting. Online businesses and their recruiters search
online for qualified candidates on professional networking sites like Linkedin for less than it costs
to buy a job advertisement. Ebusinesses are able to spend less time on hiring because they don't
have to sift through hundreds of responses to a job advertisement. Employment candidates usually
appreciate the convenience of getting approached by recruiters online.
Among businesses whose employees work from home or remotely, social networks are recreating
the camaraderie associated with office spaces. The technology is helping companies build stronger
personal relationships with suppliers and clients, nurture a sense of teamwork among employees,
and foster collaboration and creativity among staff and business partners. People working in
isolated locations feel less lonely when social networking software is deployed.
3.2 Forces of applying social networking in e-business

The upcoming addiction towards socialnetworking infrastructure from e-enterprises is driven by

economic and technological forces emerging these days. Forces of applying social networking
could be changing realities of customer behavior, decreasing sales and dropping advertisement
effectiveness and efficiency. To be specific it can be classified as followed:
Firstly, big volume of information provides customer with diverse options including price,
attribute and possible discount. This make customer more proactive than ever before so that
they could adjust their needs and compromises with varios choices.This alters customers
shopping behavior.
Secondly, paid messages and advertisements are loosing their attractions. Having more
available information and plenty of choices for customers make a great challenge to sellers
as a simple advertising campaign can not work ever as effective as before.
Last but not least the fast development of technology, especially the prevailing of internet
and its implications drive companies to change, and provide them new advertising optiions
at the mean while. Social networking has some good attributes which may be useful if well
utilized.

3.3 Social Networking opportunities and challenges in e-business environment

In this section is discussed about social networking opportunities and challenges in both which eenterprises should be motivated and prepared6.
Opportunities - Many companies have shown great interests towards web-based social
networks.There must be some reasons initiating them. Despite of the solid amount evidence that
social networks redirected to e-business, there are many other interelated implications.
First of all, by finding the reality of decreasing trust from traditional paid messages, the trust from
social networking is crucial for advertisement.People are provided a number of high quality and
personalized reviews of a product from trusted soures to convince them to buy. The idea lying in
social networking is that valuation generated from trusts within specific social networks and
therefore, can improve profitability, affectiveness and efficiency of advertising.
Also by incorporating social networking and other technologies such as recommendation system. Eenterprises can reach useful data for prediction of market trends, customer behaviors and so forth.
For example an e-commerce website can identify opinion leaders with high influence and maximize
the effectiveness of marketing based on a social network surrounding opinion leaders. It can help
the company establish its competitive advantage differentiating from others.
Challenges - Despite of the optimistic perspective some disputes exist suspecting its promising
profitability and effectivenes. The main point of optimistic opiniion is virtual social networking
holds the same attribute of real cosial network so that person inside the society trust each other, and
the virtual nets promise the credibility for people. However, there is doubt about the similarities
between the virtual and the physical one.
Simply thinking social networking as something money promising, however probably may cause a
failure of investment as customer or online surfers may consider advertisements offensive and
6 Yi Qiao Helsinki University of Technology , Publication Social networking and e-commerce,
http://groups.csail.mit.edu

intrusive. It is suggested that overstatement may arise and careful exploration should be conducted.

4. Advantages and disadvantages of using the social networks in ebusiness

Online networking has its own advantages including these7:
Huge Exposure:Marketing your business online through social networking website gives
you a huge number of prospective clients or customers. YouTube alone has 3.75 million user
channels and growing. These are all prospective clients.
More Pointed Exposure:When you use a blog to provide information on your product or
service, you'll boost the number of people that come to your website specifically for your
product or service. They've come online to look for a specific product or service, which you
are delivering. You aren't marketing to people who may not need your service.
Inexpensive:Networking online is less expensive than any other type of advertising or
marketing. Consider it the online version of word-of-mouth advertising. You could spend
millions launching a product through commercials and advertising, or you could spend a few
dollars to get a blog going, to register at a few social websites and to interact.
Find Partners:Networking is not always about getting the customer; social networking
online can help you get the partners you need as well. Put up a MySpace page and talk about
the new product idea you have. Sell your idea to the 100+ million users on MySpace and
find a partner to finance it.
Gauge the Waters:Networking in business is a fantastic way to find out what others think
before you invest time and money on promotions that are not profitable. For example, use
your Facebook profile to gauge the interest in your local area in a new club concept you
have.
In the age of internet technology where visitor are increasing day by day. Social media sites
provides online exposure to our products due to which people form different location can have
access to it. Social networking sites will help in generating the targeted leads. This will also help us
in finding reliable business partner .Also when products are uploaded on any social networking
sites, there is a possibility that you might be getting feedback about your products. This will help
you a lot in understanding the customer mood. Social networking sites act as the store house for
huge traffic. This gives the opportunity to identify the customers which will be targeted as the
potential customers. We can easily communicate with them and try to understand their flavor; this
will help us in manufacturing the products that matches the customer needs.

But there is some disadvantagesof social networking.

The first disadvantage to speak about can also be an advantage. This is the viral potential of the
media. In other words, when you have some news or item to share with an audience, it can spread
all around the world. When this news is negative or in bad taste, the same will happen. This is
7 Advantages of Networking in business, http://socialnetworking.lovetoknow.com

where the disadvantage comes in. It is hard to undertake damage control when you are dealing with
social media and your good name might be soiled within hours.
Another one of the top disadvantages worth a mention is the need for intensive labor. If you intend
to build a brand and a name through social media, you must be ready to spend time updating your
audience on all the relevant issues. Once you become established, you will tend to have a bigger
crowd and it can be difficult to meet the needs of all people increasing you labor greatly. However,
to remedy this, you can put in place a networking campaign that is manageable and grow gradually.
Another thing to mention is that you must be ready to connect with your audience at all time.
According to experts the law of reciprocity will apply. In other words, you need to give and take. If
you have updated helpful information on a network, a person who is interested might respond and it
is upon you to reply their queries and satisfy their curiosity. This is the essence of social media and
if not done properly, your audience might loose faith in you. There are people who evade this and
other disadvantages of social media by establishing themselves are entities that give updates that are
promotional in nature. This way, the audience will take and run with what they have.
If you are not adaptive, then you might be in trouble because social media in nature will change
constantly. You need to keep in touch with all the latest in this industry because this is the sure way
to safeguard the interests of your business. Remember, social networking for business gain will help
you move to heights you have not been to before. Therefore, know the pitfalls discussed above and
steer clear of them if you are to win in this game.

5. The effective use of social networking sites to generate sales

Social networking sites can be used to directly generate sales for an online business. However,
social media sales generation must be approached properly8
Important thing about social network it's to make sure that is not used as a sales tool but as a
platform for developing customer relationships. If used in combination with email marketing
strategies, online entrepreneurs and internet marketing specialists can develop solid and highly
valuable long-term marketing assets. In email and social networking platforms, the initial phase of
developing customer relationships is the hardest.
Customers are changing their behaviour dramatically in line with the technologies and world
business environment. Therefore, survival business has to modify or even change their advertising
strategies to cope with the changing realities of customer behavior.Advertisers and e-businesses
spend a lot of time on finding new effective advertising channels and measures to increase sales
materialize advertising investment.
Social networking as an emerging phenomenom holds many attractive properties both interesting to
customers and businesses. Facebook, MySpace, Twitter demonstrate big volumes of traffic online
and credited for around 6 percent retail traffic online redirect considerable click-through to ecommerce websites.Americans spend nearly 23 percent of their online time using social networks
like Facebook, Twitter and MySpace.
Advertising on social networks has had mixed results so far. Many consumers find targeted ads on
these sites to be intrusive anduntrustworthy. When people do click on the banner ads, the visitors
don't stay on the advertising eBusinesses' sites long enough to buy anything.
An eBusiness saves the most money from social networks when the technology replaces legacy
systems and offline practices. A lot of companies are still in an interim stage, in which social
networking still supplements older business practices. Having both in place only makes social
networking more expensive, rather than a cost saver.
Given the popularity of websites such as Twitter, Facebook, MySpace and Linkedin, many large and
small business owners are exploring the various options for advertising on social networking sites.
These social networking ads can take many different forms. Some simply appear as banner ads,
whereas others are information pages about a product or service.
Social networking has become popular and raised a question on its profitability and future
influences.Here is explained how social networks add value to e-commerce and online advertising
and at the same time why many famous E-enterprises are interested in them and whether or not a
companies should apply social networks in their online business.
Also here is displayed the use of social networks in the domestic company Nevada from Skopje.
Nevada is a leading online store for high-tech products in our country commited to becoming
loved and trusted online store on the web by offering superior shopping, rapid delivery and good
customer service. Nevada's online store is presented in Figure 5.1 .
With over 10 000 products Nevada earns the loyalty of tech-enthusiasts and e-shoppers.
They convince their customer with state of the art decision-making resources such as
detailed specification and high quality photo galleries.
Nevada offers customers fast delivery and cutting-edge logistics.
They belive that true service starts after the product ordered arrives at customer home.
8 Katrina Dayrit, How to effectively Use social Networking Sites to generate sales, book:% waysto cultivate an Active
social network-intersection consulting, http://www.suite101.com/

Their team of service associates are available via phone and e-mail.
www.nevada.com.mk was founded in 2007 and offers customers comprehensive selection of the
latest high-tech products, detailed product descriptions and images, as well as how-to information
and customer reviews.

Figure 5.1 Nevada Computers

5.1. Using social networks to advertise an online business

E-businesses can connect with their customers through social networks like Classmates,
LinkedIn, Myspace, Facebook, Twitter. To start a proper conversation with them, they must take
just three steps:
Step 1: Chart the Market - Before engaging a prospective customer, study the industry. Who are the
most influential people in the market? Who do customers talk about, most? What companies are
respected? Who's opinions count? Who do customers like, not just talk about? There's a difference
between fame, and infamy, in social networking.The goal is to discover the industry experts. These
people have a definitive impact on customer's choices. Make a list. Study what they have to say.
The goal is to become established as one of them.
Step 2: Watch the Customers - In order to effectively communicate with a customer, first learn what
they're saying. Become a "fly on the wall" by discreetly tapping into their conversations.Figure out
where on the Internet customers are hanging out, and go there. It's like a biologist going to the
jungle to watch animals, instead of the local zoo. Observe the customer's natural behavior, and pay
attention to the noises they make. Find blogs and online forums where potential customers
congregate. Bookmark them. Subscribe to the site's RSS feeds. Read what they're saying and pay
attention. It's amazing what potential customers talk about in these places. This gives Internet
businesses an inside view to how an audience is reacting to different situations, their concerns, their
likes and dislikes. Learn what turns the customer on, making them rampant consumers that buy up
everything in sight, and what turns them off, turning them into rabid weasels ready to bite off heads
at the slightest provocation. Paying attention is all that's required.While watching these social
networks, notice that each group has a certain style and rhythm. These are social groups, after all.
They have social rules that may not be obvious, but look out for them. Do they allow blatant
advertising? Do they seem to be okay with links in the posts? What about links in the signature?
Internet ventures will fall flat without this kind of knowledge.

Step 3: Become One of Them - Now that the customer's hearts and minds are understood, it's time
to enter the fray. Join these forums. Leave comments in the blogs customers are reading. Set up a
Facebook page for the company.
Once the accounts and profile pages are set up, start searching for members of the network that are
potential customers, and engage them. Don't just barge in with blatant advertising messages: "Buy
Product X, Here!" or "Get Product Y, Now!" That's just crashing the party. With this approach
customers just will run away.
With effective ads, online business will generate sales and profit with less cost and in easier way.
Nevada chooses Facebook to advertise their online business.Facebook is aware that e-commerce
site owners may want to capitalize on Facebook traffic, so they allow members to create free
Facebook business pages or pay-per-click advertising campaigns. Pafe for creating facebook ads is
shown in figure 5.2 .Facebook offers the following business options:
Advertising: Businesses use this tab to create adverts that will run on Facebook pages
Pages: Businesses use Pages to create a presence on Facebook that will let others join your
page as a fan
Connect: Facebook connect lets users seamlessly connect their Facebook account and
information to your site.

 Facebook Share: Design a button for your site to make joining your Facebook Page easy
for your customers

Figure 5.2

Facebook Ads

Nevada has started mixing social-networking functions into its leading e-commerce platforms, a
move it hopes will convince users to spend more time and money on their online store.
They noted that most of their potential customers were spending their time in front of their
computers on social netwroks , and that social media could be a way to better engage them.
So they took a step into the social media world.They discovered they could do promoting Nevada
via Facebook. Today Nevada has 5 sales representatives across the country using their personal
Facebook accounts. Nevada goal is simply to influence the right peopleIf you connect with the
right few people, you can really get in there and connect with thousands of people .
Here I will describe how Nevada uses Facebook to generate revenue and what methods uses.
Before to start with uploading an ads on Facebook you must have a Facebook page.Nevada started
with creating a page for their e-business.This is a public profile that enables them to share their
business and products with Facebook users.A user can customize a page at Facebook by adding his
own content and working with pre-installed applications, such as a flash player and a photo
uploader, to create a distinctive presence on the Web.The main focus of creating a Facebook page
was to promote their online store.This was an opportunity to create exclusive offers only available
to those on Facebook and help them to achieve additional business revenue and generate more fans
on Facebook.The more people like your business page, the more exposure your business will get.
Facebook fan page help them in creating brand recognition and awareness and allow people to
readily distinguish their logo. Also help them to get in touch with potential clients and business
partners.A Facebook page can be fun, informative and more approachable. Using a Facebook page
help them to carry out less formal communication and to show their clients who the people are.
Figure 5.3 present facebook pafe of Nevada.

Figure 5.3

Facebook Page of Nevada

With Facebook page you will be able to access 'Insights,' which is Facebook collected data about
how your business page is being used Figure 5.4 .
This is one more benefit for Nevada to track page views, number of fans, removed fans, wall
posts, discussion topics, reviews, photo views and more. Also can view graphs in full screen, print
them, or save them and demographics visualization, which shows more info about the audience that
is interacting with Nevada page. Obviously, this can be of tremendous benefit for Nevada.

Figure 5.4 Uses of Nevada's Facebook Page

Demographic segmentation consists of dividing the market into groups based on variables such as
age, gender family size, income, occupation, education, religion, race and nationality.This variables
are amongst the most popular bases for segmenting customer groups.This is partly because
customer wants are closely linked to variables such as income and age. On Facebook is often much
more data available to help with the demographic segmentation process.Facebook Ads are targeted,
meaning you choose the location, gender, interests, relationship status and other demographics of
your target audience.Demographic segmentation for neva is presented in Figure 5.5 .

Figure 5.5

Demographic segmentation for Nevada

There are numerous varieties of social network ads. These include:

Floating ads:These ads move across the screen of a specific web page.
Trick banners:These are the least popular form of ads, because they resemble an error
message. The banner might have a dialogue box, which tells you that your computer is not
secure, and certain actions must be taken. If you take these actions, you are brought to the
advertiser's website.
Pop-up ads:Pop-up ads display the advertising in a new window.
Video ads:As the name implies, a video ad is similar to a television ad, since it displays a
video that advertises the product.

Facebook Ads offer a specific ad type to promote an external website, Facebook Application or
Facebook Group,and another type to promote Facebook Page or Facebook Event.
Nevada uses an ad that drives traffic to their online store www.nevada.com.mk .
People who click on their Facebook ad will be directed to this page.
In the case with Nevada, they use Facebook Ads for sending facebook users direct to their online
store.This means that they use Floating Ads. They decided for facebook ads because it makes easy
and cost-effective to quickly set up and manage their campaign, also through Ad Management Page,
can track their progress, change the audience, or adjust other metrics as the campaign progresses.
Nevada uses floating ad Figure 5.6 because this ad drives traffic direct to their online store
www.nevada.com.mk.

Figure 5.6 Floating ads

In addition to this types of social networks there are methods of advertising.There are three
predominant methods of advertising on social networking sites:
CPM: CPM stands for "cost per mille," with per mille meaning the cost per one thousand
impressions.
CPC: CPC stands for "cost per click." In this scenario, the advertiser pays the social
network a specific amount of money for every visitor that clicks through the ad and visits
the product or service website.
CPA: CPA stands for "cost per acquisition, and is also known as affiliate marketing. In this
type of advertising, the social network publisher only gets paid when someone actually
makes a purchase at the vendor's website. Amazon is an example of affiliate marketing
CPA Advertising: Cost-per-action marketing is a simple and popular form of online
marketing. Designed on a standard online affiliate marketing model, affiliates are paid every
time a user completes a series of actions using a link or tracking code. While typically
marketed through pay-per-click advertising and search engine optimization-powered
websites, a range of innovative affiliate marketers and internet marketing specialists are
taking to social networking sites to further their influence and boost conversions.
Nevada Ads its run on Pay for Views (CPM)Model and is shown only in ad space Figure 5.7.
During the ad creation process, daily ad budget and the maximum bid is set, which is the most you
are willing to pay per click. CPC ads are displayed in Face book's Ad Space, Home Page (or both),
while CPM ads are shown only in the Ad Space. Facebook selects the best ad to run based on the
cost per click or impression and ad performance.

Figure 5.7

Ad space for Nevada

One other method for measuring the results of advertising i two buttons like and X which is
shown in Figure 5.8 .

Figure 5.8 Like and X buttons

Social networks Advertising benefits for Nevada are:

Within the first week of their ads running they had over 300 clickson the
website
.
After only four months of advertising on Facebook over 40% of clicks to their
online store come from Facebook page.
Facebook has expanded their market nationally in a way that no local print
magazine could
They can control their budget and spending according ti their needs
They were able to drill down to people that lived in Macedonia and had terms
like new technologies in their profile of interest.
Can track the promotion effectively
Facebook ads were an inexpensive way to quickly reach a large number of
people who might be looking for high-tech products on internet and the total
investmnet was about 70% lower than traditional advertising
Over 30% increase in sales from their online store
10% conversion rate from visits originating from Facebook Ads

5.2 Value creation

When talking about changes in business whatever it is a organizational structure change or a new
technology introduced, it is necessary to make sure that the change decision is strategic and
efficient. Even through it is unlikely to materialze every change to monetary form, it present the
investment company that the change is to influence the comapany in agood way in short or long
terms. Social netwroking is one example of this kind of investments.
In order to be make a proper decisions on choosing whether or not to use the social network, it is
prerequisite to find some method other than monetary one.Therefore it is necessary to understand
what value means in order to increase it or lets say in this situation to increase the value of
advertisement means.
It is necessary to understand how value is created. Generally, value created is the difference
between the consumer benefits and the costs for providing the product. But, creating value is not
just about making visible profits but also creating competitive advantages by setting companies
strategies. The customers willingness to pay is crucial and can be only reached by distinctive
products and services offered and well-leveraged organizational efforts.
The objectives of introducing and utilizing new advertising channels therefore should focus on
creating long-term relationship, reducing the rate of customer defections, increasing the share of
wallet through cross-selling and up-selling, increasing the profitability of low-profit customers, and
fostering on high-valued customers. By improvinig customer relationship management, tha
mainproblem of lack trust can be solved by social networking to some extent.
For those properties social networking creating value, it is necessary to find whether they are goodto-have or have-to-have. Value is created through the whole vale chain after new technology is
introduced. The view of the interests holding by researchers and businesses should be on how to
make social networking valuable rather than on whether or not to adopt social networking. Creating
vale by using new technologies is more art than science.The power of of the online experience and
of online friendships amy give the website much of the character of a true community. But how to
create resonance and upcoming values highly depends on the innovation and creativity of
companies.

Conclusion

Social Networking is still a new enough phenomenon that enterprises that are not yet having
success with the technology most likely will hit their stride in coming years. More of an impact of
social networking on eBusiness will come as the technology matures and continues to attract more
consumers.
Social networks in a way is changing e-commerce and helping it towards new direction. With its
help, E-commerce can solve some problems of e-businesses. However, its opportunities and
limitations should be carefully studied so as to be fully utilized, It is important to understand how
much value created depends on innovative use of technologies than simple duplicate others
activities.
Online social networks are beneficial in many ways. They remove many of the complexities of the
offline world.
The various ways that social networking is used continues to play a role in the overall profitability
of many businesses, both those businesses that are solely online and those that are both online and
offline.
For offline businesses this means that information only is shared to potentional customers and the
awareness is increased, but they can not buy online.In online businesses social networks help to
better contribution of information and customers are directly targeting their website to buy online,
icrease traffic and generate more sales and profit.

References

http://www.sag.org
http://whatissocialnetworking.com
http://socialnetworkinglovetoknow.com
http://www.suite101.com
http://groups.csail.mit.edu
Publication: Social networking and e-commerce, Yi Qiao-Helsinki university of
technology
Anderson analytics, Media Consumption