The Role of Social Networking Sites in Advertising - Case Study Example

The role of Social Networking Sites in Advertising By Affiliation Table of Contents Introduction At the present, the use of the internet has become very common in almost every walk of life. Now people use internet to carry out different activties of daily life. Normally, they use internet for shopping, banking and entertainment. But these days a new trend has appeared that is social networking. And now people more and more using these social networks to share their ideas, make friends, and for various other activities. By seeing the growing reputation of these social networks among public, now advertisers are also choosing social networking sites to advertise their products and services. This paper discusses how advertisers take benefits of social networks to advertise their products. In the start we will discuss about social networks, after that we will discuss why people use social networks, and in the last we will discuss the role of social networks in advertising. An Overview of Social Networks (Boyd & Ellison, 2007) define social network sites as web-based services that help individuals/users carry out following activities: 1. Create an public or private profile inside a bounded system/web site 2. Create a list of other users to whom they communicate 3. View and make changes in the list of connections and those made by others inside the system. However, the basic objective of social networking is not that it helps individuals communicate and make relationships with unknown persons, but, it helps individuals create, maintain, and make identifiable their social networks or profiles. In other words, it can be said that this results in communication with individuals that would not in other ways be possible or done, even though that is not the main goal, since these communications or relationships are usually among "latent ties" the users having some offline links (Boyd & Ellison, 2007). Presently, the trend of social networking is growing everywhere and the social networking websites have turned out to be a family name. In spite of the fact that, it is an individual’s private or professional existence, they are in actual fact magnificent procedure for making new relationships online and communicating with friends, colleagues (Sedycias, 2009) because a social networking web site is a kind of web site where individuals and groups are able to build up an online profile, after that they enter their interests into the profile, as well as they can add or insert connections to other profiles. In addition, the people using social networking sites are able to distribute/share private information, such as blog entries, photographs and videos. There is an example of social networking web site that is MySpace. This social networking web site is very famous equally with music groups and individuals, who want to share information about their tour dates, and distribute their songs on their profile pages (Hawkins, 2009). The most important advantage of social networking site is that it is a very supportive and useful method to stay in touch with many people (friends, relatives, colleagues etc). In addition, if an individual has interesting news which he/she desires to share with other people (friends, relatives or community), with social networking sites it becomes very simple since he/she can add/enter it on his/her personal bulletin board and it will be distributed or transferred to the people to whom he desires to share. In this way, the social networking sites play a major role in meeting with new people, whatever the purpose of it (a business deal or friendship) (Hawkins, 2009). Phillips & Phillips (1998) increases the scope of social networks by saying it a collection of corporations, businesses, individuals/users, or other social entities that are connected through a set of widely significant associations, for instance co-working, friendship, otherwise information exchange and communications to successfully accomplish preferred outcomes by sharing/distributing expertise, resources, knowledge, and information. Moreover, a social network typically offers its users a number of opportunities for finding, establishing novel social or business related association for collaboration, social support, exchanging social capital such as, services and goods, economic resources discovering and application of information sharing, and creating social wealth (Phillips & Phillips, 1998). According to Liebowitz (2005), at the present the social networking technology is offering a major role in e-commerce, business communication, e-business, financial growth and dealing with other business activities. Since the adoption and execution of the computer-mediated technology for the social networks present ways that help users share and discuss corporate information such as a range of products and services offered, quality of the products or services, and prices to enhance the corporation’s reputation and make popular the services they present (Liebowitz, 2005). In addition, a most well-liked and popular instance of virtual community (social networking) is eBay that is a virtual marketplace through which millions of users and customers from all over the world buy and sell products or services, discuss and share common interests, discuss the products and optimum practices, get assistance and feedback from other customers, and market the products and services that assist in developing business status. In this scenario, Lea, Yu, Maguluru, & Nichols (2006) discuss that this kind of virtual communities and social networks help improve financial system by growing transactions and dealings between loosely connected various communities of people and small businesses (Lea et al., 2006; Girgensohn & Lee, 2002; Neumann et al., 2005). Why do people use Social Networks? The concept of social networking has turned out to be itself as the most modern in a line of internet fashions. As well, with the extraordinary and greatest growth in populariity of social networks, it was just a concern of time prior to people got up to the marketable services/opportunities offered. Additionally, the people using the internet in numerous countries are catching the social networking germ. In addition, at the present, the people making use of the world-shattering social networking web sites for instance Facebook, MySpace, Bebo and a lot of others are more than 20% of all the internet users in UK. Moreover, this growth has not gone unnoticed among corporations and businesses. Consequently, numerous corporations and businesses stay occupied by the vision of marketing/advertising their services, products, and goods to the people who keep on growing in numbers at a healthy rate (General Review, 2008). At the present, a number of corporations are making use of the social networking sites in different ways. For instance, they are using them for business revenue generation, customer attraction, marketing, etc. In addition, the services like that MySpace, Friendster, and Connexion have been successfully carrying groups and singles simultaneously based upon resemblance and similar interests. Moreover, at the present, some of the businesses networking services are presenting a parallel experience in the business and professional world. However some of these services obtainable to business people and entrepreneurs and this number are growing (Allen, 2009; Jenkins, 2006, p.281). Swartz (2008) stated that businesses more and more are "exploring and experimenting" utilization of social networks to enhance and improve business processes. For example in business with distant workforce had adopted a social network that facilitates in sharing tools, collaborate, learning and sharing information from different areas of the world (Swartz, 2009). From the above discussion we can conclude that the social network websites are becoming a universal reality, in view of the fact that the millions at the present time use internet to connect with social networks (such as Facebook, Twitter etc). As well, at the present, there are more than 1.5 billion people from all over the world make use of these social networking sites. Additioanlly, more than a million people have joined Facebook within three years only in Egypt. In the same way, Tunisia has 279,000 Facebook members, Morocco 369,000, South Africa 1.1 million, Nigeria 220,000, Mauritius 60,000, and Kenya 150,000. Moreover, the people use Facebook, Myspace, Bebo, Twitter and this type of other social networking sites which facilitate or present the services to the users/individuals to make a profile page, which they can personlize with pictures, commentary regarding what they are doing, video’s etc (Kreutz, 2009; Woorld, 2009). And different corporations take benefits of these information to merket their products and services. Below given graphs show the usage of social networking sites for different purposes and ratio of users: Figure 1, Source: http://designdamage.com/blog/wp-content/uploads/2009/08/dma-headmix-social-networking-biggest-impact-may-2009.jpg Social Networking and advertising According to Neumann, OMurchu, Breslin, Decker, Hogan, & MacDonaill (2005) an exclusive quality or feature of social networking web sites is their visible motivation and offering the individuals the capabilities of distributing their ideas to others, including the people who are unknown to them (Neumann et al., 2005). In this scenario, Palmer & Koenig-Lewis (2009) carried out a research on the social network websites. Their research discovered that 23 % of customers and business website users had shared their ideas about an advertisement and 25 % had transferred (forwarded) that advertisement to other users of the website (Palmer & Koenig-Lewis, 2009; Maddox, 2008). According to the research of Warrillow & Co., which was carried out at last months 2008 Warrillow Summit in Las Vegas, more than 28% of small-business managers joined as a minimum one social networking site. However, the most well-liked social network web site for small-business managers was Classmates.com, since more than 18% managers registered on this site, after that Linkedln (15%), then MySpace (14%) and Facebook (10%). Additionally, these are the results of the research which was based on an online survey involving more than 2,036 small-business managers, carried out in 2008 (Maddox, 2008). To advertise their products and services, corporations can also make use of social networks to create their own communities of prospects and customers. There are many examples of corporations that use social networking web sites to advertise their products and services. First example is Bank of America, which ran a movement on Linkedln (social networking site) providing small businesses a facility to join other small businesses. In this scenario, Jennifer Howard who is head of Business-to-Business marketing at Google discussed that marketers are discovering modern and up-to-date ways to engage and communicate with customers. There is another example in which, 3M recently started a video movement on Google-owned YouTube, getting feedback from people to send videos of ways in which they utilize 3M Post-it Notes (Maddox, 2008). While talking about the long-standing concern, it can be said that the worth for marketing on social networking sites may be merely the capability to access and communicate with niche groups through advertising. Additionally, majority of these sites focuses on text advertising by charging a fee which is affordable to small businesses. For instance, LinkedIns fees can be as small as $5 for 1,000 impressions and facilitates people to allocate a financial plan. In addition, it allows advertisers select different criteria to target, such as industry, geography, seniority, and company size (AllBusiness.com, 2008). Limitations and Recommendations Following the victory of Google advertising strategies, social networking sites for instance Facebook have been adopting an advertising-based business model. On the other hand, studies demonstrate that advertising on social networking sites is not as much successful and the click-through rate of advertisements on social networking sites is very low. For the reason that the people dont join these web sites to find information regarding particular products or services. Thus, the advertising-based business model for the social networking web sites has had only limited victory. On the other hand, if the goal of advertising is to change the customers’ buying behavior, researches demonstrate that there is an additional method to control their buying behaviors. For instance, Sony Corporation desires to advertise its latest digital camera. In this scenario, Sony has two choices, the first way is that it can promote its camera on Facebook and get a very low click-through rate, and other way is to offer free cameras to a number of Facebook users (possible at a lesser price than marketing). In this way it can create a viral campaign. The researches show that many types of users are expected to be influenced by such a movement (Gilbert, 2009). Conclusion The idea of social networking is emerging rapidly. Now people more and more joining social networking sites. By seeing the ever-lasting increasing number of social networks’ users now marketers are also moving towards social networking web sites. This paper has discussed the concept of social networking. Social networking sites help users create a profile, which contains his interests and other information. Thus, this information can be used by the marketers to market their products and services. However, the basic objective of social networking is social gathering this advertising on social networking sites is not much successful. Bibliography AllBusiness.com, 2008. How to Use Social Networking Sites for Marketing and PR. [Online] Available at: http://www.nytimes.com/allbusiness/AB11702023_primary.html [Accessed 20 May 2010]. Allen, S., 2009. 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