Effectiveness of Online Advertising on Social Networking Sites

1. Mitun Dutta MBA Dissertation Proposal Page 1
Dissertation proposal on
Effectiveness of Online Advertising on Social
Networking Sites
Table of Contents
Topic Page no.
1. Dissertation Title…………………………………………………………………..
2. Purpose of the study……………………………………………………………….
3. Research Questions………………………………………………………………..
4. Aim and Objectives of the study………………………………………………….
5. Scope of the study…………………………………………………………………
6. Review of literature………………………………………………………………..
6.1 Discussions of Previous researches on Advertisement on social networking
6.2 Emergence of social networking
6.2.1 Face book
6.2.2 Twitter
6.2.3 MySpace
6.3 Type of online advertising
7. Research Methods…………………………………………………………………
8. Data collection methods………………………………………………………….
8.1 Sampling procedure sampling size
8.2 Sampling size
8.3 Study population
8.4 Study Unit
8.5 Study instrument
8.6 Data Processing and analyzing
8.7 Graphical Representation
8.9 Operational Design
9. Conclusion……………………………………………………………………………
10. References

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1. Dissertation Title
Effectiveness of Online Advertising on Social Networking Sites
2. Purpose of the study
In recent times social networking websites not only provides a space for individuals to interact
with other people, but also provides a good opportunity for businesses to reach their target
customers by means of advertising. Form of advertising on online that focuses on and is given
social networking sites is called social network advertising (Mrinal, 2008). These type of
advertising has the potential to enable near-universal free or cheap access to services and content
(Advanced Internet Policy Report, 2009).
1. To investigate the impact of social network advertisements on providing the actual
information about products.
2. To explore the effectiveness of online advertising in reaching out to consumers
3. Research Questions
Proposed study will answer the questions:
1. How much advertising on social networking is effective in sales for companies?
2. Which is the most preferred approach for advertising on social networking websites?
3. How a customer like is approached by advertisements on social networking sites?
4. Aim and Objectives of the study
The proposed study aims to discuss a brief overview of the market of social network advertising
and to determine the effectiveness of advertisements on social networking to attract customers.

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This paper has two main objectives:
a) To critically evaluate the effectiveness of social networks as an important advertising
medium
b) To identify the criteria for successful advertising on this new medium
c) To explore the coverage of online advertisement on social networking sites
d) To investigate the importance of online advertisement to know about products and companies
5. Scope of the study
Social networks advertising is a widely discussed issue today and a lots of researches have been
conducted on the topic. Although social networking websites have become popular in recent
times, but there are little academic researches and literature to describe this trend from
consumers perspective. Advantage of social networking advertisement such as: myspace,
facebook, friendster, twitter, youtube etc., is that by using users‟ demographic information
advertisers can appropriately target their advertisements. The postmodern consumer trust the
internet as transparent and paid placements and paid reviews will outweigh because of ther the
recommendations of known friends. The current paper will focus on three social networks and
advertisements in it: Facebook, Twitter, Myspace. The proposed study includes the perspective
of the large base of customers.
6. Review of literature
6.1 Discussions of Previous researches on Advertisement on social networking
On advanced Internet Policy Report, (2009) it is demonstrated that Promotion on internet by
advertising quickly acquiring the reliability of marketer than that other tools of Marketing. This
report also explored that online advertising, which has a market value of $40 billion at 2009 that
tend, doubled in 2010 (Advanced Internet Policy Report, 2009).

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This market value indicates a shift towards online advertisement from traditional marketing.
Online advertising is alive for round the clock and that leads to gain the return on investment of
advertisement. On line advertising is preferable by the marketer because the target is more
precise and provides specific measurement about the target than other marketing media.
A current analysis by Epsilon explores that half of chief marketer like to use data motivated
promoting techniques. A recent report of IAB/PWC indicates that, in UK less than a period of 2
years the market growth of online advertising increased near about 8%. The comparison between
this two parameter shows that, the market shares of traditional advertising platforms, such as TV
(21.7% - 22.1%), Press Display (20.8% - 19.3%), Press classified (16.2% - 14.6%) have
downward slope between 2006 and 2008 (Advanced Internet Policy Report, 2009).
Marketing is all about networking. Now a day it goes online. The rise of social networking site
like as MySpace, Face book over last few years has been phenomenal. It is explored that these
social networking sites have grown to new height, each sites currently boasts more than 60+
million genuine visitors each month. It is a common thinking to all marketing agency to cover all
potential target. Through this new marketing policy marketer can convey their message to a large
scale by providing less effort than other media. (Mrinal,2008).
This paper will set up an analysis of the importance of social networking sites to promote
business by advertising and also try to study the current advertising modes that are used.
Spence (2010) argued that advertisement in online covers the most. This has also supported by
(Pergelova, et al. 2010). According to (Pergelova, et al. 2010), they establish that online
advertising enhance the efficiency and that lasts long run.
In an empirical research on control of friends to buy of users in an online social network reveals
the category of users with different behavior. The low-status group (48% of users) is
disconnected, shows very poor interaction with different users and is not biased by social
pressure. The middle-status group (40% of users) is not adequately connected, tends to logical
non-buying action on the site and has a well-built and positive effect due to friends‟ buying. The
high-status group (12% users) is perfectly connected and dynamic on the site, and tends to a

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momentous downward effect for the purpose of friends‟ buying. This research indicates the
difference of purchasing habit and effect of advertisement on habit. This impact leads to nearly
14% decline in the returns of this huddle. (Iyengar, Han and Gupta, 2009).
Primarily web was used as a marketing tool that promotes the business but soon it converts into a
critical distribution medium for the up to date business organization. On line are used as a major
medium for brand communication (Thompson, 2002; Jothi, Neelamalar and Prasad, 2011). A
reading on the usefulness of advertisement on social network it is argued that, in net advertisers
represents their products by a normal way to grow the attention to check out the product details
by click. It can be concluded that, social networking sites are used as a major tool to promote
and develop the business‟s brand identity (Jothi, Neelamalar and Prasad, 2011)
An explanatory study on some footwear sales company reveals that some industry are highly
interested to use on line advertisement whereas other shown a very negative approach. The
research states that, the Internet is the most powerful channel to advertise because almost all
people relies on the Internet and thus online advertising is far better than usual advertising
method. People are living in a virtual world by using social networking sites widely (Kaur,
2008).
It is rightly said that traditional media have narrow coverage comparison to Internet. It also
regarded as cheap way of marketing. (Jensen and Jepsen,2008). They also argued that
comparatively costs are reduced and return on the costs is high. The rise of social networking
like Twitter and Face book may lead any firm to spend a lesser cost and develop gender focused
advertisements based on user‟s information (Hoy & Milne 2010; Cramphorn, M.F. 2011).
6.2 Emergence of social networking
According to Danah Boyd and Nicole Ellison (2007), social networking sites can be said as
“Web-based services that allow individuals to (1) construct a public or semi-public profile
within a bounded system, (2) articulate a list of other users with whom they share a connection,
and (3) view and traverse their list of connections and those made by others within the system.”

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Social networking site was started in 1997. The starting of Ryze.com in2001 was the second step
of social networking sites. Whereas Face book in 2004, the most popular site around the world
users. It also varies from countries to countries: Orkut, Google‟s foray into social networking,
had tremendous users in India and Brazil. Windows Live Spaces, Microsoft”s network combined
with instant messaging service, became trendy in Mexico, Italy and Spain. Some sites also
provides different services, such as- sharing digital media, by Flickr and YouTube, and treated as
most popular websites all over the world. (Mrinal, 2008)
6.2.1 Face book
On February 4, 2004 Face book started its journey and regarded as pioneer in social networking
with 800+ million dynamic users around the world. Its intention is to help the people to connect
and share to become world a very open arena. Banner advertisements and referral
Marketing is its main source of income.
Commonly it reveals 30 non-personally particular information from user‟s summary. This data is
served for behavioral advertising, which benefits their customers. Face book collects all the data
transparently but the reveals the data which is non- personal according to their sense. Face book
Ads and Social Ads are their two sectors of advertisements, both of them started their journey in
November 2007.Face book Ads is a common targeting advertising formation based on non-
personally-identifiable data and derived from customer‟s profile. It is a standard targeting stage
that conveys the message for certain group by ensuring their Characteristics and interests
(Advanced Internet Policy Report, 2009).
6.2.2 Twitter
With 300+ million dynamic users Twitter is the second largest social networking site around the
world. It tends to cover its users interest and it is one sort of micro blogging site. At 2010 it
covers near about $140million revenue. Twitter focuses customer who belongs to a celebrity in
their arena. In a very short time, less than a year 57% of Indian joined in this site, which provides
the idea of popularity of social networking and micro blogging. That becomes a very common

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platform for marketers to develop their marketing communication strategy and also create a very
rigorous brand value.
.
6.2.3 MySpace
Lapinski‟s said that, the website has become “the next generation of marketing, advertising and
promotion, exquisitely disguised asocial networking”.
My space creates a common plat form for all the corporation and advertisers. They allow
creating a page to promote the corporation and business. In MySpace advertisements are
tormented throughout the site from the time users start to use and groups they contact when
scrutinize the site. It enjoys a number of common competitive advantages over Face book and
You Tube. It has a greater number of user comparisons to the both of the company and data
reveals that users spend more time on MySpace than other social networking sites. It has a
greater visiting rate near about $1billion per month, which is relatively more than Face book and
You Tube. But recently the traffic has leveled due to more competition. Still it has a favorable
situation to marketers to reach out the global audience (Mrinal, 2008).
6.3 Type of online advertising
Internet already generated three categories of advertising. “Display” or “banner” ads, came first
in the shape of graphical box structure on web pages, but now with videos. Today these are 32%
of on net advertising income. Next are treated as ads, which is now 17% of the total. The pest of
lots of small-town media, are posted as Craigslist.The latest and largest, sort is advertising, with
41% of the total, invented by Google, Together, these three types of online advertising are
already transforming entire industries and businesses (Economist.com, 2007).
7. Research Methods

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8. Data collection methods
At first the researcher introduced herself to the respondents and about the research project.
Researcher also guarantee about the confidently and anonymity of the information or data
collected from the responses of the respondents. Then respondents are asked to volunteer a
portion of their time. Each questionnaire contained a cover- latter so that respondents can be sure
of the guarantee given by the researcher. Finally, by using the above mentioned techniques data
have been collected for this researcher project.
8.1 Sampling procedure sampling size
In this study non-probability sampling will be selected to collect relevant data as it may prove
perfectly adequate because the researcher will conduct a preliminary research study. Under this
non-probability sampling techniques, purposive sampling will be used to select respondents.
8.2 Sampling size
Respondents will be selected purposively according to access to the respondents of the
researcher and other members of the group. By using purposive sampling, total 50 respondents
will be selected from the sample population.
8.3 Study population
In current study the study population will be Face book, Twitter and Myspace user community,
8.4 Study Unit

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In this study each individual user in the community of Facebook, Twitter and Myspace will be
selected as study unit.
8.5 Study instrument
Under the survey research, interview administered questionnaire has been selected as the study
instrument. Survey was conducted randomly among Face book, Twitter and Orkut user
community, by sending questionnaire through online to collect the individual opinion from the
respondents.
8.6 Data Processing and analyzing
When all data will be collected researcher will check whether there is any information gap or
not. After that „statistical program for social science‟ (SPSS) a computer base statistical data
analyzing software will be used to analyze and interpret data. Various interpretations of the data
have been provided such as frequency distributions, mean, median and mode, standard deviation
has been used to test hypotheses.
8.7 Graphical Representation
1. Different types of exploitation, average wage level, country of destination foe working
will be presented graphically by pie chart.
2. Investments in different sources will be presented by bar diagram.
8.8 Operational Design
1. Time Line
The proposed research will be conducted within 1 month. The time allocation will be as
follows:
a. Interview = 10 days
b. Data analysis = 10 days
c. Draft report writing = 5 days
d. Final report writing = 5days

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9. Conclusion
Rational and repetitive marketing helps every consumer to make proper decision about what he
wants, based on true information about products, which has become possible by advertising.
Virtual social networking websites become one of the major spaces for encouraging online
consumption. Changing pattern of consumer consumption pattern, type of advertising and
detailed information about products in purchases can be seen now a days (Clemons, Barnett and
Appadurai, 2007). For all these reasons the proposed study aims to critically evaluate the
effectiveness of social networking advertisements from the perspective of the consumer.
Ref:
Advanced Internet Policy Report Online Advertising: Confronting the Challenges, 2009, Policy
Engagement Network, Available from:
http://www.lse.ac.uk/collections/informationSystems/research/policyEngagement/advertising_paper.p
df
Boyd, Danah and Ellison, Nicole, 2007, Social Network Sites: Definition, History and
Scholarship, Journal of Computer-Mediated Communication, Vol 13(1).
Bryman, A. and Bell, E. (2007), Business Research Methods, (2nd ed.), Oxford: Oxford
University Press.

11. Mitun Dutta MBA Dissertation Proposal Page 11
Clemons Eric K., Barnett Steve , Appadurai Arjun, 2007, The Future of Advertising and the
Value of Social Network Websites: Some Preliminary Examinations, In ICEC '07:
Proceedings of the ninth international conference on Electronic commerce, New York,
ACM, pp. 267-276.
Iyengar Raghuram, Han Sangman, Gupta Sunil, Do Friends Influence Purchases in a Social
Network?, 2009, Harvard, Harvard Business School, Available from:
www.hbs.edu/research/pdf/09-123.pdf
Jothi P. Sri, Neelamalar M. and Prasad R. Shakthi, 2011, Analysis of social networking sites: A
study on effective communication strategy in developing brand communication Journal
of Media and Communication Studies, Vol. 3(7), pp. 234-242, Available from:
http://www.academicjournals.org/jmcs
Kaur, Inderjit, 2008, Online social networking as and advertising medium: footwear sales
industry, Ireland, Available from: http://hdl.handle.net/10788/110
Mrinal Todi, 2008 , Advertising on Social Networking, Wharton Research Scholars Journal
Websites University of Pennsylvania, Available from:
repository.upenn.edu/wharton_research_scholars/
Spence, P. (2010). Website Marketing with Social Networking Get Web Traffic with
Facebook, MySpace, and Twitter
Word of mouse: Will Facebook, MySpace and other social-networking sites transform
advertising? Nov 8th 2007, Sun Francisco, Economist, Available from:
http://www.economist.com/node/10102992?story_id=10102992

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