Social Network Sites & Advertising

 

       Since the rise of social network sites, such as Facebook and Twitter the majority of the population communicate and interact through the internet. Although, the greater part of these social networks are free for the users these networks obtain almost all their revenue from allowing companies to advertise on their own sites. Social network advertising is effective because advertisers track the searches made by social network users prior to their purchase.

        Data collected by an offline survey of 200 university students exhibited the positive correlation between the pre-purchase searches made by these students and their reactions to social network advertising. The study also revealed that the positive viewpoint of social networks sway them to click on the ads they feature. Because these students practiced their ad-clicking behavior they proved the effectiveness of these ad banners. It was also shown that users depend on social network sites to obtain more information on an item they are interested in.

       It stands to reason that with the considerable use of social network sites companies seeking to improve their marketing should acquire deals with social networks as a place to display their ad banners. Having said that, this is where search engine companies like Google and Bing come in because they sells the advertising rights for various keywords to other businesses through auctions. For these search engines keyword-based advertising is how they, like social network sites, make their money. Search engines use base their auctions on second-price auctions, like the Vickrey-Clarke-Groves mechanism, as ways to set prices for keyword-based advertising. Ultimately, researchers hope to duplicate this study and look into the other demographics, other than young university students, to see if their findings still hold or if more can be learned about the relationship between social network sites and advertising.

 

A, Mir A. “Effects of Pre-Purchase Search Motivation on User Attitudes Toward Online Social Network Advertising: A Case of University Students.” Journal of Competitiveness 6.2 (2014)ProQuest. Web. 30 Mar. 2016.  
http://www.cjournal.cz/files/170.pdf

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