Download company advertising on Facebook.1

And Then Came Facebook… Company Advertising On Facebook As The New Strategy For
Business Marketing
Nicole S. Beresford
Pace University
Beresford 1
Is Facebook taking over social media? Facebook has exploded in popularity within the
past decade, resulting in its recognition as the premier social networking site on the internet.
The earth is composed of 7 billion people, divided among 243 countries. A diverse population
holding about 2300 religions and speaking 6912 languages, every one of these people are
different. What connects communication between these 7 billion people is the internet, and all
the websites it consists of whether it be social, academic, etc. With 5 billion users and growing,
social networking sites are the most popular for communication; they have begun to serve a
purpose for advertising in the business world as well. Facebook is the top social networking site
with 1 billion users, of which 300 million are active; it has become a highly profitable marketing
tool for companies. Some Facebook users have even stated the site is a “necessity, along the
lines of oxygen, water, and food” (Roberts, 2010, p.24). Brand and company communication on
Facebook allows for a noteworthy opportunity for marketers to interact with consumers on a
more personal level, build brand awareness and loyalty, shape positive attitudes, and impact
purchase behavior.
Companies have begun to recognize the advantages of social media enhanced brands as
a tool for forming personal relationships between brands and consumers. Brand based groups
do not only allow for an ease of communication with users, but they also permit companies to
create bonds with devoted users. As evidenced through various studies, brand based
communities have displayed positive effects on consumer perception. A study conducted by the
International Journal of Social Science & Interdisciplinary Research attributes 84% of user
"engagement", otherwise noted by clicks to Likes that link back to Facebook advertising. It has
Beresford 2
also been determined that brands increase fan numbers by a 9% monthly average, almost
doubling their annual amount (Bajpai, p. 217)
Prior to Facebook’s founding in 2004, advertising on social media was limited.
Companies connected with customers via television, radio, billboards, print media, etc. Jon
David Schlough, founder of the new media- consulting firm, Well & Lighthouse says "Dollars are
migrating into online programs at a high rate, because there was almost nothing a few years
ago"(Barnes, 2010). In recent years, businesses have come to understand that the most
powerful source of persuasion is not through the company itself, but rather through interaction
with peers. Companies can rant and rave about their brands but we know they ultimately just
want to sell its product or service. We trust the opinions of our family, friends, teammates, and
colleagues because the interaction is on a more personal level. As advertising on social media
has become more prevalent, companies are dedicating more and more of their advertising
budgets to it.
There are generally two main potential audiences for brand and company based
material on Facebook. The first of which is “fans” of branded content on Facebook; users who
interacted personally with a company profile or content. They have expressed their affiliation
with the brand through either comments, or “likes”. The second is the friends of these “fans”,
which consist of a larger percentage of the audience (34 times as many). These individuals have
been exposed to branded content on Facebook through association with company
“fans”(Lipsman, 2012, p.42).
Beresford 3
Facebook considers itself to be a social platform because it is a revolutionary social networking
site. Unlike its competitors, Facebook blends various tools essential on the internet all in on
place. These tools allow for numerous functions to be available on Facebook, these include
private and group messaging; a community “wall” where personal uploads and statuses are
displayed either publicly or to selected users; the ability to tag friends in such uploads; photo
albums; videos; personal information; event groups for social meetings; and friendly “pokes”
(Ulusu, 2010, p.2950). Facebook allows people to interact with each other, cultivate
relationships and share opinions.
Advertisers have the option of creating a free fan page, where companies may invite
users to become a “fan” of their company, product, service, brand, etc. This allows them to
reach a broad or specific audience without financial risk or wasting “time or energy on people
outside of their chosen market. The advertiser can view the results of who is clicking their ad,
and modify it accordingly” (Roberts, 2010 p. 25). To see just how efficient this method of
targeted marketing on Facebook is, author of “Welcome to the world of nanotargeted ads.
Advertising Age” Sam Lessin, conducted a test on his own girlfriend. He created his own
Facebook ad, targeted specifically to her; he wrote out her particular demographic (a Wall
Street Journal Reporter, 25 years old, living in San Francisco, graduated from Harvard in 2006,
majored in history, etc). His ad was then posted directly on her Facebook. This shows how
effective this targeting strategy is, one which was not provided by previous, traditional
marketing strategies (Roberts, 2012, p. 26).
Beresford 4
Facebook based brand communities and profiles play an assortment of roles for
members. They facilitate information exchange, in which communal participation is unlimited,
as well as providing easy access to beneficial information. Recent studies have found that 70
percent of consumers, who visit social media sites, do so to gather brand, company and product
information (Dolan, p.2). When businesses join Facebook and create a company page, people
can communicate with that brand. This gives the consumer a sense of personal interaction
because of their pervious experience on Facebook, noting it as a “social” platform. "If you are
going to spend money to generate traffic, you might as well send them somewhere where you
can constantly communicate with them,"(Barnes, 2010). Social networks facilitate the free flow
of communication among users; so when information about a brand is released to Facebook, it
multiplies and is repeated. This repetition of information generates consumer traffic and
attention to the brand.
The Facebook “wall” in in particular one of the most effective applications the site
provides to advertisers. Users spend over a fourth of their time interacting with the Facebook
Newsfeed, the chief location where branded content is consumed. Users tend to be between
40 and 150 times more likely to view company and brand based content in the Newsfeed than
by visiting the Fan Page itself (Lipsman, 2012, p.40).
Technology plays a vital role in the success on company advertising and branded content on
Facebook. The constantly improving technology of cell phones and their applications are
immeasurably beneficial to business marketing on social media and Facebook.
Beresford 5
Today, innumerable people possess access to smart phones, which possess social
networking capabilities. These allow users to be notified instantaneously of updates and things
going on in social media sites. The continual connection to Facebook this provides, allows
companies the ability to remind and update users of their capabilities, uses, importance, etc.
“Because cell phones are connected to social networking sites, advertisements are always in
sight”(Bajpai, 2012, p. 215). Respondents from a study mentioned in the “Interviews in
qualitative research” by King, N. and Horrocks revealed that such frequently viewed and
branded content brought into sight through constant Facebook updates stimulate their
recollection and recognition of that particular brand in future purchase scenarios. One of the
participants stated “I will always go for a wine that I am familiar with and know something
about, rather than just seeing the label, because of Facebook there is a level of affiliation with
the wine now” (Dolan, pg.3).
As with all things, there are of course drawbacks to advertising on social media and
Facebook. It’s difficult to determine to what extent this new medium of advertising is effective
for brand awareness, perception, and consumer spending on the company’s products. The
number of page views, clicks, and likes on Facebook can be measured with exact numbers and
precision, but whether these advertisements actually improve brand awareness, and attitudes
is a grey area. It is difficult to determine whether or not those who participate on the
companies Facebook page actually feel positively about the brand as personal opinions and
consumer thoughts can never truly be known for sure. The democratic nature of Facebook also
Beresford 6
presents certain issues to companies. When everybody has a voice, anyone can state their
opinions whether it be negative or positive. This presents a reputational risk for business,
brands and companies, which could be damaged instantaneously and irreparably due the viral
spread of information facilitated by the Internet.
However, the positives effects of company advertising on Facebook most certainly
outweigh the negatives. According to recent studies, nearly half (49%) of users are making
purchase related decisions based on information and opinions of others, retrieved from
Facebook. At the end of the day, technology is always changing and the platform for which
advertisers seek to reach their target audience with always change as it does. At this point in
time we can however expect Facebook advertising to increase and become a highly profitable
industry in the future. Hopefully Facebook won’t stray too far from its original purpose
becoming a giant source of advertisements and consumerism like televised ads did over time.
Annotated Bibliography
Bajpai, Vivek & Sanjay, Pandey & Shweta Shriwas (2012). "SOCIAL MEDIA MARKETING:
STRATEGIES & ITS IMPACT." International Journal of Social Science & Interdisciplinary
Research 214-23. IRJC.
Described how social media marketing has become beneficial in the advertising world
and why, as well as its effect on ad campaigns. This source was useful to understand
how certain campaigns have been successful as well as statistical data and background
information. This source was useful for this paper because it provided statistical data
which was referenced and incorporated other technologies such as cell phones. This
helped when I spoke about improving technology and smart phones, and their benefits
to social media advertising.
Barnes, J. A. (2010). Google Hopes To Cash In On Ad Spending. National Journal.
Spoke about the use of social media campaigning for governmental and presidential
elections. It was useful to an extent because it focused specifically on political
campaigning, however it was unbiased and simply gave examples of campaigns and
attributed success due to social media advertisements and campaign strategies. This
source helped me specifically in my second page where I referenced particular quotes.
These quotes helped display why money in campaigning is moving towards online
advertising on social media.
Bhagwat, Shree, and Ankur Goutam. (2013) "Development of Social Networking Sites and Their
Role in Business With Special Reference to Facebook." IOSR Journal of Business and
Management (IOSR-JBM) : 15-28. iosrjournals.org.
Provided background history of the arrival of social networking sites with special
reference to Facebook and methods of advertising used before it was created. This work
was useful in providing substantial background information and breaking down all pros
and cons of Facebook as a social medium as a whole. This source was extremely helpful
to me because the introduction was clear and understandable. The piece was organized
well, speaking first about social networking Sites as a whole and then how Facebook in
particular has gained immense popularity. I used this source for main ideas and
familiarizing myself with the topic and how I wanted to structure my introduction and
basic information ideas.
Dolan, Rebecca, Steve Goodman, and Cullen Habel. "Engaging Friends and Influencing People:
Consumer Perceptions of Brand Communication Strategies on Facebook." Anzmac.info.
Referenced a particular, and previously conducted study to understand the use of
Facebook to reach consumers. It concluded that its particular study found how
Facebook is used by that company and probably many others for three main purposes;
promoting events and visitation, increasing sales, and building relationships with the
consumers. This source provided specific study information to help understand broader
ideas and provide examples. I used this source as a reference when I spoke about
consumer response and reaction to advertising on Facebook and how it actually is
effective by providing direct quotes and information from conducted surveys.
Roberts, Katherine K.(2010) "Privacy and Perceptions: How Facebook Advertising Affects Its
Users." The Elon Journal of Undergraduate Research in Communications 1.1, 24-34.
This piece spoke about user perception of company advertising on Facebook. It spoke
about how they view advertising as both helpful and annoying at times with an in depth
analysis as to why. This work provided less generally information and more statistical
data. This work helped when I was looking for statistics and data to support an idea or
claim I made in my paper.
Lipsman, A., Mud, G., Rich, M., & Bruich, S. (2012). The Power of "Like": How Brands Reach (and
Influence) Fans Through Social-Media Marketing. Journal Of Advertising Research, 52(1),
40-52. doi: 10.2501/JAR-52-1-040-052.
This paper examined the way branded content reaches consumers through Facebook
and how effectively it does so. It was helpful by including statistical findings from a May
2011 study. Its examination and incorporation of these statistics were extremely helpful
in understanding the topic as a whole as it was exactly the topic I sought to explore. It
provided statistics which I found helpful but was not simply statistics based. I believe
that was the best way to explain this topic because overwhelming numbers do not help
elucidate a point but rather provide numbers for conclusions to be drawn. I sed the
piece specifically when speaking about the two types of audiences that companies seek
to reach when advertising on Facebook. Both those who are “fans” of the company
brand, and those who are friends of “fans”.
Ulusu, Yesim. (2010). DETERMINANT FACTORS OF TIME SPENT ON FACEBOOK: BRAND
COMMUNITY ENGAGEMENT AND USAGE TYPES. Journal Of Yasar University, 5(18),
2949-2957.
This paper sought to explore the factors which determine how much time users spend
on social media sites, particularly Facebook. I found this useful due to its ample amount
of background information and historical explanation of the emergence of Facebook as
such a powerful social media source. I used this source not for statistical data as I did
with others, but rather for overall ideas and concepts. This work was helpful when I
went into detail of the tools and characteristics of Facebook and the functions it
provides, making it revolutionary and different from other social networking sites.