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FINAL THESIS

SOCIAL NETWORKING SITES


An approach towards effective marketing
By: shaheen younus , sehar Ali , misbah hussain , sheheryar suddle.

2011

SUBMITTED TO

: MAM AFSHEEN

DANISH NAQVI

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

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Social networking sites : AN effective approach to marketing

December 08, 2011 Ms. Asheen Danish Muhammad 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,

me@shaheenbaloch.com,

cracknjack56@hotmail.com,

sheharyarsuddle@hotmail.com,

misbahhussain@hotmail.com,

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Social networking sites : AN effective approach to marketing

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.

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Social networking sites : AN effective approach to marketing

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

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Social networking sites : AN effective approach to marketing

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 companys 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.

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Social networking sites : AN effective approach to marketing

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 individuals 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 companys 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 organizations popularity.

1.2. BACKGROUND

1.3 Literature Review

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Social networking sites : AN effective approach to marketing

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.
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Social networking sites : AN effective approach to marketing

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
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Social networking sites : AN effective approach to marketing

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:

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Social networking sites : AN effective approach to marketing

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 users 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 members 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.
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Social networking sites : AN effective approach to marketing

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.

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Social networking sites : AN effective approach to marketing

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 dont 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.

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Social networking sites : AN effective approach to marketing

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 organizations 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.

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Social networking sites : AN effective approach to marketing

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 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.
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Social networking sites : AN effective approach to marketing

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.

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Social networking sites : AN effective approach to marketing

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 consumers 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. V. VI. VII. VIII.

Do marketers have profile pages eye catching enough for the consumers or not? Do contests help in gaining more ideas and making more fans on fan pages? Do discounts and free gifts facilitate in attaining more consumer attention? Are the marketers providing proper knowledge and information regarding product? What are the reasons of online advertisements on social networking sites being avoided by most of the consumers?
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Social networking sites : AN effective approach to marketing

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

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Social networking sites : AN effective approach to marketing

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 reson is to convey to your reder wht knowledge nd ides have been estblished on topic, nd wht their strengths nd weaknesses are. s piece of writing, the literature review must be defined by guiding concept (e.g., your reserch objective, the problem or issue you re discussing or your rgumenttive 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.
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Social networking sites : AN effective approach to marketing

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.companys 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.

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Social networking sites : AN effective approach to marketing

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

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Social networking sites : AN effective approach to marketing

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 brands 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:


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Social networking sites : AN effective approach to marketing

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.

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Social networking sites : AN effective approach to marketing

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 customeroriented 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 users 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

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Social networking sites : AN effective approach to marketing

advertising such as Banner advertising, social networks have enhanced the use of public relation activities by taking into account the electronic word-ofmouth (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.

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Social networking sites : AN effective approach to marketing

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:
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Social networking sites : AN effective approach to marketing

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
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Social networking sites : AN effective approach to marketing

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

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Social networking sites : AN effective approach to marketing

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

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Social networking sites : AN effective approach to marketing

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 users 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 dont 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,

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Social networking sites : AN effective approach to marketing

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
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Social networking sites : AN effective approach to marketing

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 friends purchase in the past can have a positive influence on the users 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 its
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Social networking sites : AN effective approach to marketing

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 others 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?

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Social networking sites : AN effective approach to marketing

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 consumers opinion about how credible the information being offered

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Social networking sites : AN effective approach to marketing

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
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Social networking sites : AN effective approach to marketing

(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 consumers 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

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Social networking sites : AN effective approach to marketing

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 users 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
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Social networking sites : AN effective approach to marketing

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.

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Social networking sites : AN effective approach to marketing

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 companys 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.

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Social networking sites : AN effective approach to marketing

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 individuals 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 companys 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

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Social networking sites : AN effective approach to marketing

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:

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Social networking sites : AN effective approach to marketing

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 questionnaire . 100 people were determined by survey for filling up the

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 participants prolife: gender, age, education and
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Social networking sites : AN effective approach to marketing

the ethnicity. We have selected a sample of about 100 Facebook users using a Convenience Sampling method as the study focuses on consumers 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.
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Social networking sites : AN effective approach to marketing

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 nonresponders, and if no significant differences exist, the chance is strong that nonresponse 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).

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Social networking sites : AN effective approach to marketing

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 participants details will be maintained. The particulars of management and respondents will not be shared with outside sources.

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Social networking sites : AN effective approach to marketing

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.

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Social networking sites : AN effective approach to marketing

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? Frequenc y 82 68 150 1 151 Percent 54.3 45.0 99.3 .7 100.0 Valid Percent 54.7 45.3 100.0 Cumulativ e Percent 54.7 100.0

Valid

Mis sing Total

male f emale Total System

Gender?

100

80

Frequency

60

40

20

0 male

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female

Gender?

Social networking sites : AN effective approach to marketing

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 Avg. daily use of internet Peak timings Age in Years

Confidential More Than 4 hours 10-12 pm 18-24 years

Confidential More than 2 hours 6-8 pm 41-50 years

4.3 Interviews Empirical Findings

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

Social networking sites : AN effective approach to marketing

Table 1. Participant Profile Age Gender Social networking platform Length of involvement network site in social

Focus Groups Average age 20 years Girls: 12 Boys: 11 MySpace: 17 Facebook: 2 Both: 2 Average 12 months

In-Depth Interviews Average years Girls: 5 Boys: 3 MySpace: 8 Average 16 months age 18

Amount of time per week spent on Average 11.5 hours per Average 5 hours per social network sites week 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..
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Social networking sites : AN effective approach to marketing

Do you use facebook? Frequenc y 6 144 150 1 151 Percent 4.0 95.4 99.3 .7 100.0 Valid Cumulative Percent Percent 4.0 4.0 96.0 100.0 100.0

Valid

Missin g Total

No yes Total Syste m

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

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Social networking sites : AN effective approach to marketing

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-ofmouth marketing, Market research, General marketing, Idea generation & new product development, Co-innovation, Customer service, Public relations, Employee

communications and Reputation management.

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Social networking sites : AN effective approach to marketing

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.

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Social networking sites : AN effective approach to marketing

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,

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Social networking sites : AN effective approach to marketing

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.

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Social networking sites : AN effective approach to marketing

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
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Social networking sites : AN effective approach to marketing

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 organizations 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
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Social networking sites : AN effective approach to marketing

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. 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.

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

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Social networking sites : AN effective approach to marketing

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 participants 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 consumers perspective about 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 people41% 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
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Social networking sites : AN effective approach to marketing

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).

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Social networking sites : AN effective approach to marketing

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.

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Social networking sites : AN effective approach to marketing

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.
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Social networking sites : AN effective approach to marketing

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.

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Social networking sites : AN effective approach to marketing 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
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Social networking sites : AN effective approach to marketing

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.

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Social networking sites : AN effective approach to marketing

If yes , then how ofte n? Frequenc y 6 109 19 12 4 150 1 151 Percent 4.0 72.2 12.6 7.9 2.6 99.3 .7 100.0 Valid Percent 4.0 72.7 12.7 8.0 2.7 100.0 Cumulativ e Percent 4.0 76.7 89.3 97.3 100.0

Valid

Mis sing Total

0 daily biw eekly w eekly monthly Total System

If yes, then how often?

120

100

80

Frequency

60

40

20

0 0 daily biweekly weekly monthly

If yes, then how often?

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Social networking sites : AN effective approach to marketing

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.

While sufer ing on facebook , do you s ee an advertis m e nt? Frequenc y 48 102 150 1 151 Percent 31.8 67.5 99.3 .7 100.0 Valid Percent 32.0 68.0 100.0 Cumulativ e Percent 32.0 100.0

Valid

Mis sing Total

No Yes Total System

While sufering on facebook , do you see an advertisment?

120

100

80

Frequency

60

40

20

MUHAMMAD ALI JINNAH UNIVERSITY


0 No Yes

While sufering on facebook , do you see an advertisment?

Social networking sites : AN effective approach to marketing 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.

120 100 80 60 40 20 0 Chating Making friends Advertising Visiting Brand Pages Buying products

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:

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Social networking sites : AN effective approach to marketing

"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).

140 120 100 80 60 40 20 0 yes no

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
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Social networking sites : AN effective approach to marketing

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

ar e you fan of any brnad on facebook? Frequency no 74 yes 76 Total 150 System 1 151 Percent Valid Percent 49.0 49.3 50.3 50.7 99.3 100.0 .7 100.0 Cumulative Percent 49.3 100.0

Valid

Missing Total

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Social networking sites : AN effective approach to marketing

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% yes no

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

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Social networking sites : AN effective approach to marketing 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).

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Social networking sites : AN effective approach to marketing

have you e ve r brought any product thr ogh facebook ? Frequenc y 146 4 150 1 151 Percent 96.7 2.6 99.3 .7 100.0 Valid Percent 97.3 2.7 100.0 Cumulativ e Percent 97.3 100.0

Valid

Mis sing Total

no yes Total System

have you ever brought any product throgh facebook?

150

120

Frequency

90

60

30

0 no yes

have you ever brought any product throgh facebook?

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Social networking sites : AN effective approach to marketing

4.4.11 Feedback to a products 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.
140 120 100 80 60 40 20 0 yes no

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Social networking sites : AN effective approach to marketing

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 face book is an effe ctive m e ans of com m unication? Frequenc y 6 35 40 31 18 13 6 1 150 1 151 Percent 4.0 23.2 26.5 20.5 11.9 8.6 4.0 .7 99.3 .7 100.0 Valid Percent 4.0 23.3 26.7 20.7 12.0 8.7 4.0 .7 100.0 Cumulativ e Percent 4.0 27.3 54.0 74.7 86.7 95.3 99.3 100.0

Valid

Mis sing Total

0 highly eff ectiv e ef f ectiv e some how ef f ec tive neither ef f ective nor inef f ec tive highly inef f ectiv e inef f ec tive some how inef f ective Total System

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Social networking sites : AN effective approach to marketing

do you think facebook is an effective means of communication?

40

30

Frequency

20

10

0 0 highly effective effective some how effective neither effective nor ineffective highly ineffective ineffective some how ineffective

do you think facebook is an effective means of communication?

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Social networking sites : AN effective approach to marketing

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 participants 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 consumers 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.

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
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Social networking sites : AN effective approach to marketing

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 nonresponders, and if no significant differences exist, the chance is strong that nonresponse 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

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Social networking sites : AN effective approach to marketing

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
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Social networking sites : AN effective approach to marketing

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 people41% 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 eMarketer 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
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Social networking sites : AN effective approach to marketing

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 dont 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
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Social networking sites : AN effective approach to marketing

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.

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Social networking sites : AN effective approach to 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
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Social networking sites : AN effective approach to marketing

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 users expectations

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Social networking sites : AN effective approach to marketing

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
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Social networking sites : AN effective approach to marketing

user, the user is skeptical toward the advertising message, or the consumer is skeptical toward the advertising medium.

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Social networking sites : AN effective approach to marketing

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.
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Social networking sites : AN effective approach to marketing

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-andmortar 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
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Social networking sites : AN effective approach to marketing

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 dont. 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

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Social networking sites : AN effective approach to marketing

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 strangers product expertise. Future studies may focus on evaluating tie strength among a users 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 individuals 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 users friends as endorsers, endorsers could also be the focal users friends 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 endorsers 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 consumers characteristics to provide
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Social networking sites : AN effective approach to marketing

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 that: data shows

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Social networking sites : AN effective approach to marketing

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.

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Social networking sites : AN effective approach to marketing

Organizations have started carrying out competitions on Facebook which has attracted a large number of audiences increasing their brands 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.

Bibliography :

1. Social Networking: A Potential Tool for Effective Marketing By Mohammed A Razzaque, The University of New South Wales.

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4. Social Media Marketing Industry Report: How Marketers Are Using Social Media Grow Their Businesses, March 2009 By Micheal A.Stelzner

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Social networking sites : AN effective approach to marketing

5. Avoidance of Advertising in Social Networking Sites: The Teenage Perspective By Louise Kelly, Gayle Kerr, and Judy Drennan

6. The Impact of Social Networking Websites to Facilitate the Effectiveness of Viral Marketing By Abed Abedniy , Sahar Sabbaghi Mahmouei

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Social networking sites : AN effective approach to marketing

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Social networking sites : AN effective approach to marketing

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Social networking sites : AN effective approach to marketing

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