Advertising in social media: a review of empirical evidence

This article presents an up-to-date review of academic and empirical research on advertising in social media. Two international databases from business and communication studies were searched, identifying 51 relevant studies. The findings of the identified studies were organized by seven emerging themes: use of advertising in social media, attitudes about and exposure to advertising, targeting, user-generated content in advertising, electronic word-of-mouth in advertising, consumer-generated advertising, and further advertising effects. Besides researched topics and major results, year of publication, journal, theoretical framework, research method, sample, measured constructs, and way of analysis were examined regarding each article. The review concludes by providing an agenda for future research.     

The Development and Testing of a Child-inspired Advertising Disclosure to Alert Children to Digital and Embedded Advertising

Via three studies, this article aims to develop and test an advertising disclosure which is understandable for children (ages six to 12 years old) and which can alert them to different types of advertising in multiple media formats. First, cocreation workshops with 24 children (ages eight to 11 years old) were held to determine a selection of disclosure designs based on insights from the target group. Second, two eye-tracking studies among 32 children (ages six to 12 years old) were conducted to test which of these disclosure designs attracted the most attention when the disclosures were integrated into a media context. These studies led to the selection of the final advertising disclosure: a black rectangular graphic with the word Reclame! (i.e., Dutch for “Advertising!”) in yellow letters. Finally, a two-by-two, between-subjects experimental study (disclosure design: existing versus child-inspired advertising disclosure; advertising format: brand placement versus online banner advertising) with 157 children (ages 10 and 11 years old) was performed to test the effectiveness of the child-inspired disclosure by comparing it with existing ones. This study not only showed that children recognized, understood, and liked the child-inspired disclosure better than the existing ones, but they were also better able to recognize advertising after exposure to this child-inspired advertising disclosure.     

Public Attitudes to Advertising

In this paper research carried out between 1961 and 1981 is discussed.     

Sales Response to Advertising

Advertising research still has to make a major contribution, both theoretically and practically, providing a satisfactory answer to the question: how does advertising influence sales? This article tackles the problem by providing a thorough analysis of the causal relationship between advertising and sales, the strength of the effects and the occurrence of time lags. Time series data for advertising and sales are related to each other in a quantitative model to provide an answer to the question of how advertising contributes to sales. The method presented is applicable to other related studies and information can thus be accumulated about the usefulness of the model.     

The role of network embeddedness across multiple social networks: Evidence from mobile social network games

This article examines peer influences from network relationships within a social network game (i.e., embeddedness) and across such games (i.e., multiplexity). Drawing on social influence theory, we develop a bivariate Poisson model of users’ repeated visits and latent attrition that accommodates peer interaction after controlling for homophily. We estimate the model using data from two social network games with considerable overlap among network members. We find that friends who are only multiplex across games exert greater peer influence on users’ game visits than members who are embedded within a single game. We also determined that ignoring network multiplexity across games may lead firms to mistarget users due to biased peer influences of embedded friends. This result provides an unresearched explanation—strength of peer influence—for the mixed findings in previous literature on network embeddedness. We utilized our results to conduct several scenario analyses to demonstrate how firms can effectively manage users’ engagement and target users in multiple social network games.     

Valuing customers for social network services

In the current Internet environment, many online service companies based on community factors (networks) produce and sell new types of digital products. For example, SNS (social network service) companies now sell customers digital decorative products for the adornment of online avatars. Not only do individual customers consume these digital products, but they also exchange them as gifts in their local neighborhoods. While previous studies on customer valuation (e.g. CLTV, RFM, etc.) focus on some important issues for identifying valuable customers, the literature does not resolve issues related to the effects on customer value of products purchased as gifts for another person. This study attempts to verify empirically the effects of two representative social network properties (tie strength and the number of ties) on customer monetary value.This study selects 2615 customers from a South Korean SNS website who enrolled on the site on the same day. Data include diverse purchase-related information, social network properties in terms of gift-giving for six months, and demographic information. The primary results of this study are as follows. First, the proposed model, which includes social network properties, has a great deal more explanatory power than the baseline model — the RFM-based customer value model. Second, tie strength and the number of ties in a gift-giving network increase customer value. Third, tie strength has a more profound impact on customer value than does the number of ties. The results of this study theoretically expand the domain of customer valuation studies due to the inclusion of social network properties, and suggest important practical implications for some online SNS companies in their efforts to find valuable customers and improve customer value.     

Consumer Response to Coupon Advertising

Because coupon advertising has both the characteristics of advertising and sales promotion, it may have distinctive effects on consumers that cannot be explained solely by coupons or advertising. Past studies present contradicting results as to the consumers' response to coupon advertising. Our experiment shows that while the coupon may be an incentive for loyal consumers of competing brands, it may be a distractor for brand-loyal consumers in processing the coupon advertising. For multi-brand users, coupons do not appear to have any distinctive effects on processing the coupon advertising. An empirical investigation of an integrated consumer response model to coupon advertising indeed shows that there are various interactive effects between the coupon and the main advertisement. These results may provide guidelines for making targeting and promotion decisions, especially for an internationally well-known brand that is entering a new market where local or other international brands are already serving the customers.     

The Global Challenge to Advertising

Abstract

Written by several executives of the International Advertising Association, “The Global Challenge to Advertising” was first made public at the 23rd IAA World Congress in Dublin in early June of 1973. The study, with detailed examples from many areas, brings into focus the two main currents of world-wide opposition to advertising: mounting consumer dissatisfaction with product quality and claims, and increasing government regulation and control of advertising. It is reprinted here by permission of the International Advertising Association, 475 Fifth Avenue, New York, N.Y. 10017.     

Repetitive Advertising to Deter Entry

This paper develops a model in which advertising not only informs consumers of brands, but also can influence consumer brand choices through its repetition. By examining a multi‐stage game in which two firms sequentially advertise before simultaneously setting a price, we show that repetitive advertising can be a legitimate entry‐deterrence weapon available to an incumbent in subgame perfect equilibrium. This demonstrates that firms’ conduct of advertising repetition has anticompetitive implications.     

How to Monitor Competitive Advertising

Marketing managers are becoming increasingly aware of the benefits from structured and continuous monitoring of competitor advertising activity. To know quickly and accurately how much competitors are spending on their media advertising and how they are utilizing their budgets can be of profound help to marketing management, advertising agency planners and creative teams. Systematic monitoring can signal moves made by competitors—introducing new products or product modifications, special offers, new strategies and approaches to markets not previously covered. Of interest to the analyst are innovations in competitor strategies.     

Towards a Praxiology of Advertising

This article argues for the need to abandon traditional models of advertising effect, if a theory is to be developed which is capable of fitting the observable reality that people use advertisements deliberately rather than being used by them. Using information processing theory as the best available organizing principle, it proposes a number of candidate elements of a future, fully grounded theory of advertising effect.     

Advertising as a Positive Force

Abstract

This paper presents the results of two empirical studies designed to assess the effectiveness of sexual embedding in advertising. In Study 1, a sample of 424 viewed and evaluated two ads with embeds or two matched ads without embeds. The results indicated that embedding was effective in raising attitudinal evaluations of a liquor ad but not a cigarette ad. In Study 2, GSR measurements were taken on a sample of 36 subjects while they viewed both versions (with and without embeds) of two ads. The results of Study 2 indicated that embedding was effective in increasing GSR measurements for the versions of the ads with embeds.     

Retailer use of a professional social media network: Insights from franchising

The adoption and use of a professional social media network by franchise chains is the focus of this paper. We draw on resource-based theory, institutional economic theories of incentives and externalities and multidisciplinary literatures on franchising, innovation adoption and interorganizational communication to link (i) franchisor characteristics and partnering strategies to the adoption and use of a professional social media network and (ii) the extent of use of this network by a franchisor to the number of followers of its network page. Hypotheses are empirically assessed using data on 500 US franchise chains from Entrepreneur’s Annual Franchise 500 for 2011, content analysis of LinkedIn pages for 317 franchise chains in 2011 and number of followers in 2015. One key finding is that franchisor adoption of LinkedIn is positively influenced by franchise chain size, franchising fees and franchisor marketing communications and negatively affected by franchise concept complexity. A second important finding is that, among franchisors who adopt LinkedIn, the extent of use of LinkedIn is positively impacted by franchise chain size, franchising fees and negatively affected by franchise chain age. A third notable finding is that the number of followers of a franchisor’s LinkedIn page in the short term is positively impacted by the extent of information about franchise chain and recruitment. A fourth key finding is that the number of followers in the longer term (2015) is positively impacted by whether the franchisor had a presence on LinkedIn in 2011 and, for these franchisors, by the number of followers in 2011.     

A study of trust over time within a social network mediated environment

Abstract

Trust is central to many marketing models; however, few studies have measured its components over time. Many longitudinal studies have relied on retrospective recall. This study builds a theory of trust development and undermining over time within the context of social-network media.An inductive study phase used phenomenological webnography to build a theory of trust development. 352 peer-review comments were analysed over six years. Outcomes of this phase informed subsequent deductive tests.Four dimensions of trust emerged – ability, benevolence, integrity and predictability – with different salience over time. Ability, a cognitive-based dimension, was important in initial trust-building. Integrity and predictability, linked to the brain’s emotion area, became important later. Undermining of trust was a shorter process than its development.     

Entrepreneurship ecosystems and women entrepreneurs: a social capital and network approach

This study investigates the effects of venture typology, race, ethnicity, and past venture experience on the social capital distribution of women entrepreneurs in entrepreneurial ecosystems. Social network data from two municipal ecosystems in Florida, USA (Gainesville and Jacksonville), suggest that network connectivity and the distribution of social capital are significantly different for men and women entrepreneurs. This difference is contingent on the venture type. Male entrepreneurs show higher comparative scores of bridging social capital in aggressive- and managed-growth venture networks, while women entrepreneurs surpass their male counterparts’ bridging capital scores in lifestyle and survival venture networks. Lastly, experienced women entrepreneurs that self-identified as white showed a higher degree of network connectivity and bridging social capital in the entrepreneurial ecosystem than less experienced non-white female entrepreneurs. Implications for entrepreneurship practice and new research paths are discussed.

     

Beyond the Return on Advertising: Elasticity of the Return on Advertising as a Diagnostic Metric to Maximize Profit

With increased marketing expenditures, managers need to be equipped with valid and reliable measures capable of showing links between marketing investments and a firm's profitable performance. In this paper we demonstrate that traditional return on advertising (ROA) can be a misleading metric if a firm's goal is profit maximization. Then, we introduce a new diagnostic tool: the elasticity of ROA and show how this metric can help marketing managers to choose more profitable levels of advertising. This new measure has the same virtues as other traditional measures of elasticity and provides real advantages over the conventional metrics.     

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Advertising Facts and Advertising Illusions

The concept of low involvement has attracted considerable interest, particularly over the last ten years, but its implications f or advertising (strategy, execution and research) are still not clear. This paper reviews the low-involvement literature and attempts to define what is meant by the concept, predict when low involvement is likely to occur and identify its key determinants. The paper then reviews and assesses what the literature has to say about the specific implications for advertising strategy in high- and low-involvement situations and concludes that the potential and power of advertising in low-involvement situations have been misunderstood and underestimated.     

Attitude Toward the Viral Ad: Expanding Traditional Advertising Models to Interactive Advertising

As a form of advertising, viral video (VV) advertising is distinct in that its communication medium is the social connections between individuals instead of formal media. After viewing VV advertising, people are engaged in two independent but interrelated processes, i.e., video sharing and embedded brand information processing. Previous research has not examined the interaction between the two processes. This study expands on the mediation of attitude toward the advertisement model proposed by MacKenzie, Lutz, and Belch (1986). Experimental results from three viral video advertisements show that attitude toward the VV advertisement is the major factor affecting video sharing, but attitude toward the brand also has a significant impact on sharing activity. Affect transfer hypothesis (ATH) and its extended models are optimal in explaining viral video advertising, which is different from prior research on non-viral advertising that suggests dual mediation hypothesis as the optimal explanatory theory.