Ethical and Managerial Aspects of Social Network Advertisement

Ethical and Managerial Aspects of Social Network Advertisement

Alan D. Smith (Department of Marketing, Robert Morris University, Pittsburgh, PA, USA) and O. Felix Offodile (Department of Management and Information Systems, Kent State University, Kent, OH, USA)
Copyright: © 2016 |Pages: 24
DOI: 10.4018/JECO.2016100103
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Abstract

Social networking systems are relatively new to society and clarification on certain aspects of the system can be obtained through further research. There are many positive aspects of social networks, such as Facebook, that organizations could benefit from including stronger customer relationship management (CRM) techniques. On the other hand, questions are raised as to whether or not an organization who advertises on social networking systems experiences an increase in sales as a result. It is unclear whether or not these advertisements actually deter individuals from further using these types of social networking systems. If individuals who spend a large amount of time on social networking sites are deterred from further usage due to these advertisements, are there any benefits to them? Significant amount information can be relayed on Facebook, MySpace and Twitter, but the question remains whether or not organizations are using this to their advantage. The present study used a sample of working professionals that were knowledgeable in the various options of social networking to test these assumptions. The three hypotheses dealt with the interplay of online social networking, advertising effectiveness, gender and age trends, and remaining the interplay with positive comments of the use of the ‘like' function and its impacts on consumer behavior, as derived from the review of relevant operations literature and from applying the basic tenants of Uses and Gratification Theory. All three specific research hypotheses were accepted in the null form.
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Introduction

Popularity of Social Media

An increasing number of individuals are utilizing social networking sites, such as Facebook on a daily basis. As Taylor, Lewin, and Strutton (2011) pointed out, both Facebook and Twitter reported an increase in users in the triple digits in 2009. Facebook is the largest online social network, with over 1 billion active users. Founded in 2004 by Mark Zuckerberg, Facebook’s mission is to “give people the power to share and make the world more open and connected.” (Facebook). Facebook began by being exclusive to college students only, but through the years has opened memberships up to everyone over the age of 13 with an email address. Facebook helps people stay connected with friends and family, learn what is happening around them, as well as share moments. Fernandez (2009) noted that a recent study found the following information; 35% of all adults, 75% of adults in the range of 18-24 years old, and 65% of teenagers utilize a social networking site. It has also been noted that individuals have increased their time spent on these sites. Social networking sites can be categorized as web-enabled services that engage users to create and maintain openly or partially open profiles, create and update preferred list of users that they want to personalize connections with, and view and interact their list of preferred connections with other lists within the networking system (Greenhow, 2011).

As Chan (2010) explained, Facebook started offering features known as pages for organizations to utilize in 2007. This feature allowed organizations to put their information out on their pages and users of Facebook could be fans of the page. This feature was the beginning of a new form of communication between organizations and their consumers. Facebook became a way for companies to receive immediate feedback and requests from their consumers so that they can make the appropriate changes to their products or services to better appeal to their target market. “Adopting a corporate dialogue would mean putting aside the current model of unidirectional communication from the corporation to the user, and facilitating multidirectional flows between the stakeholders of any public or private entity” (Bonson and Flores, 2010, p. 35). There are many businesses that utilize Facebook to increase their sales. “As Internet users become bored with and less likely to click on ads, and the pool of people who aren’t yet online shrinks, the only hope companies have of bolstering their ad revenue is to ‘acquire more complete information about users’ so advertisements can be more accurately targeted” (Clemmitt, 2010, p.751).

In 2014, Facebook leads the social media industry with over 1 billion active users, the next closest competitor, Twitter, has 560 million users (Bennet, 2014). Facebook not only has the most active users in social media, but Facebook also has the most social logins. In the first quarter of 2014, Facebook led the social media industry in user logins with 53% of social media users logging into Facebook (Finn, 2014). While Facebook is the leader in the social media industry, there are competitors who are gaining ground on Facebook users by creating niche social media sites. Social networking sites such as Twitter, LinkedIn, and Instagram cater to specific needs. Twitter allows users to follow others and send micro messages containing 140 characters. LinkedIn allows professionals the opportunity to connect and build working relationships and connections. Instagram caters to pictures, allowing users to post pictures and message one another. Management at Facebook must be aware of the competitors and find ways to retain users. Facebook has begun an aggressive campaign to increase its competitive position in the social networking industry. An example of this strategy was demonstrated when the firm acquired Instagram for US$1 billion (Raice & Ante, 2012).

In order to prevent current Facebook users from switching to other social media sites, needs to continuously adapt niche qualities to certain parts of the site. For instance, Facebook could add a business/professionals section in order for users to upload their resume and view job postings from companies in order to directly compete with LinkedIn. Since many companies have Facebook pages, such options would allow both companies and users a better opportunity to connect and find new employment opportunities.

Undoubtedly, social media platforms and its related technological developments, such as Facebook, MySpace, YouTube, and Wikipedia, ultimately allow the consuming public the opportunity to express their opinions and shape their future viewing experience (Zimmerman, Clavio, & Lim, 2011). In terms of sports, the consuming public, fans and those who purchase related products, are not the only stakeholder involved in the media experience. Corporate sponsors, sports writers, broadcasters, sports executives, and players must all be considered in setting an agenda that meets their needs as well. It is important that appropriate research designs are developed that more adequately address and measure the impacts of the other stakeholders in promoting appropriate messages in mass media. Some designs may be technology-specific, while other designs are more strategic than tactical in that they are ensuring that the proper goals of the organization are properly communicated in the selected media channel. Websites of organizations should be organized to maximize positive corporate image control and minimizing the impact of competing stimuli, not just maximizing merchandising opportunities. Perhaps, many of the recent mergers and acquisitions by Internet and mobile technology industry leaders are at least partially geared to control these corporate images and reputations. Figure 1 highlights some of these features that social networking providers are concentrating on promoting in order to attract and retain customers (e.g., advertising promotions, market segmentation and targeting, open and semi-secured communications, promoting newer forms of communication technologies and mobile applications).

Figure 1.

Conceptual framework for present study dealing with social networking

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