Running head: EFFECTS OF TARGETED ADVERTISING 1. Effects of Targeted Advertising on Social Media Users

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1 Running head: EFFECTS OF TARGETED ADVERTISING 1 Effects of Targeted Advertising on Social Media Users Hannah Ackers, CJ Kisabeth, Faith Marsco, Ryan Montville, Dallis Newell, Alex Schnulo The Ohio State University

2 EFFECTS OF TARGETED ADVERTISING 2 Abstract The purpose of this study was to expand upon previous research conducted concerning the effects of targeted advertisements on social media users. Using an omnibus survey, participants were asked to share their interactions with advertisements and brands online. Results of this study suggested that targeted advertisements on social media did not significantly affect college students attitudes towards brands. Due to limitations, this study may not be a strong representation of real world implications. However, understanding these limitations may help future researchers produce a more accurate understanding of the underlying relationships. Keywords: Social Media, Targeted Advertising, Brands, College Students, Electronic Word of Mouth, Relationship-Oriented User

3 EFFECTS OF TARGETED ADVERTISING 3 Effects of Targeted Advertising on Social Media Users With the rise of social media in the 21st century, companies have developed new effective strategies for getting consumers to view and engage with their advertisements in this new online environment (Brettel, Reich, Gavilanes, Flatten, 2015). This form of targeted advertising collects demographic information online about a user and tailors ads to their specific preferences. Our research question centers on finding out how targeted advertising on social media affects college students attitudes towards said brands. Social media is defined by Boyd and Ellison (2007) as a web-based service that allows users to create a profile that is public or semipublic within a bounded system, create a list of other users they have relationships with, and view and traverse their list of connections and those made by others within the system (p. 211). On social media, users can participate in e- WOM, electronic word of mouth, which allows users to share their opinions of products and brands with others on a social media platform (Brettel et al., 2015). According to Brettel et al. (2015), with the spread of electronic word-of-mouth, users are indirectly influencing other users opinions and buying decisions. Most users have friends or followers who share the same needs or preferences and look to others for brand referrals. This concept will help guide our research question by understanding how users engagement influences their brand decisions. For the purposes of our research, user-generated content can be defined by Knoll and Schramm (2015) as media content created or produced by the general public rather than by paid professionals (p.3). There are two types of branded social media communications that are created by the advertiser on a social platform: organic and paid. Organic social media consists of advertising messages that are shared via likes, word-of-mouth, and reposting by users.

4 EFFECTS OF TARGETED ADVERTISING 4 Paid advertising is paid for by the advertiser as sponsored content, and is shared by the site with the targeted users. These two forms of targeted advertising are the most common ways social marketing is used today. Targeted advertisements come from collecting demographic information online about a user and tailoring ads to their specific preferences. Data mining allows Facebook and other companies to track users interests and activity by putting a digital cookie on the user s computer and tracks the cookie every time the user visits a site that has Facebook s like button on it, and uses this data to create the sponsored content. In addition to our research question, we will use several hypotheses to guide our research and draw conclusions based on our original research question. H1. Social media users are more likely to be positively influenced by an advertisement if they have a social contact expressing a positive attitude towards the brand. H2. Social media users are more likely to be negatively influenced by an advertisement if they have a social contact expressing a negative attitude towards the brand. These are similar to the research article on user-generated content because that article focused on the different effects of interpersonal relationships and group membership with authors of UGC and their effect on response to advertisements (Knoll & Schramm, 2015). H3. Social media users who are more relationship-oriented on social media are more likely to engage with targeted advertising, and are more likely to spread advertising messages via word-of-mouth. This comes from the study conducted by Yeo, who researched what personality traits influenced social media engagement (Yeo, 2012).

5 EFFECTS OF TARGETED ADVERTISING 5 H4. Targeting individuals based on information about them obtained via data mining, advertisers can increase user engagement on social media. H5. Targeted advertisements lead to more engagement by the person being targeted (more likely to purchase the product or service). These were derived from research done by Brettel, Reich, Gavilanes, and Flatten focuses on how stimuli influence a company s short and long-term sales (Brettel et al., 2015). Method Design A survey was conducted with a convenience sample specifically recruited at the author s institution in Spring A survey was appropriate for this research design because it allowed us to examine a large data set made available over a short period of time in a manner that was convenient to both the researchers and the study sample. Participants Participants (N=118) were undergraduate students at a large university in the Midwest. The participants were mostly Communication majors, though some had majors outside of this realm including Journalism, Finance, and Psychology. Females comprised 52.6% of the sample, while males comprised 47.4% of the sample. The average age was M= The ethnic breakdown is 5.1% East Asian, 7.6% Black or African American, 4.2% Hispanic or Latino, 72% White, 1.7% Southwest Asian, and 9.4% selected other or preferred not to answer. Materials and Procedure A questionnaire was given out to a specific sample that was present in the author's Communication Research class in Spring Participants were able to access the survey

6 EFFECTS OF TARGETED ADVERTISING 6 online through the online survey website Qualtrics. The survey was only distributed to students who were registered in COMM 3160, Communications Research Methods. This was an omnibus survey and participants were required to take the survey in order to receive participation points for the class. The survey took approximately 60 minutes for students to complete. Measures Relationship-Oriented User. In order to address whether or not our participants were relationship-oriented social media users, we asked a series of multiple choice questions regarding the reasons for their social media use. Electronic Word of Mouth. To assess the degree to which our users were participating in e-wom, we developed a series of Likert-scale questions regarding how actively users post on social media and how often they engage with the posts of their social media contacts. To understand the effect that targeted advertising has on our participants, we developed an additional series of Likert-scale questions. These regarded how often social media users notice ads, how relevant those ads are to the participant s interests, and how often they engage with advertisements, whether that be clicking on the advertisement or purchasing the product. After constructing a questionnaire that appropriately addressed our hypotheses and key research concepts, we analyzed descriptive statistics and ran correlational tests to determine the significance of our Omnibus survey results. Targeted Advertising. To better understand how participants interacted with targeted advertisements, we compiled two questions asking how often they noticed ads on social media and how often they purchased a product because of an ad they saw on social media. With the results, we compared the data points using an ANOVA test and observed its significance.

7 EFFECTS OF TARGETED ADVERTISING 7 Results In order to gain more insight into the correlational elements of our hypotheses, we ran a series of correlational analyses to examine the relationships between different answers to our omnibus survey. We first examined H5 by running a correlational analysis between seeing advertisements previously looked up online and the number of online purchases made in the past month. This showed a small but positive association, r(113) = 0.063, p = Unfortunately, these results were not significant and did not support our hypothesis. We then examined H3 by running a correlational analysis between clicking advertisements of previously researched products and how often a person commented on other people s profiles/content in the past two weeks. This showed a small but negative association, r(109) = , p = This, too, was insignificant and did not support our hypothesis. Finally, we examined H1 by running a correlational analysis between people viewing brands more positively when their friends post positively about the brand on social media and how inclined people are to purchase products online after viewing advertisements on social media. This showed a significant positive correlation, r(72) = 0.40, p = Thus, the results provided support for our hypothesis. We then ran an ANOVA test to examine the relationship in H3. An analysis of variance showing what effect a person being more relationship oriented has on the number of purchases after viewing advertisements on social media was not significant, F(3, 66) = 0.703, p = Post hoc analyses using Tukey s HSD showed that people who use social media to interact with people they already know (M = 2.23, SD = 0.79) p = were not more inclined to purchase products after viewing advertisements on social media than people who use social media for

8 EFFECTS OF TARGETED ADVERTISING 8 following news (M = 2.14, SD = 0.77) p = There was no significant difference between people who use social media to interact with people they already know and people who use social media for meeting new people (M = 2.00, SD = 1.41) p = There was also no significant difference between people who use social media for interacting with people they already know and people who use social media for business exposure (M = 1.50, SD = 0.577) p = Thus, the results did not provide any support for our hypothesis. Discussion Targeted advertising is a fast-growing and cost-effective way for marketers to get their company s message in front of a specific audience. Social media especially has helped to facilitate this meteoric rise; the more information about ourselves we upload to Facebook, Twitter, Instagram, etc., the more direct advertising messages can be aimed at groups of users. Our research aims to determine how the attitudes of social media users towards brands are affected by this kind of targeted advertising. While causal relationships could not be determined with the results of our study, we found a strong correlational relationship between social media users viewing brands more positively when their friends post about them on social media and how inclined those users are to make online purchases. This relationship offers some support for H3 and is important for future researchers to take note of. We had several limitations during our research. The biggest limitation was not receiving data from the entire population sample. This was because our questions were not present in the original survey and the supplemental survey was not completed by as many participants. Many of our hypotheses proved to be insignificant, but if a larger sample was polled, we might have found more significant results. Another limitation is that due to our questions being in a

9 EFFECTS OF TARGETED ADVERTISING 9 supplemental survey, we received the data from our questions late. This resulted in a quicker analysis and rushing through the subsequent parts of the research process. Additionally, our hypotheses lacked clarity in their structure and wording. We combined hypotheses together which in turn made analyzing our results more difficult. We could not fully support most of our hypotheses because we failed to ask the appropriate questions to do so. Lastly, our survey questions failed to appropriately address our hypotheses. We did not ask any open ended questions and the questions we did ask did not give us enough data to form significant conclusions. In the future, academic research should focus on gathering data from a larger population. While this may seem to be a simple observation, it would be critical in proving this research relevant. Some results shown in the study could potentially have proved significant if more users had participated in the omnibus survey. Future research should also utilize different survey questions. For the set of survey questions used in this study, users were required to use a lot of information from memory. With the use of stimuli, researchers could put visual aids in the survey to help users recall information more clearly. People often do not realize they are seeing advertisements on Facebook, or do not remember. With example profiles and news feeds, researchers can use this stimuli to get more accurate results on social media user s interactions with targeted advertisements. Finally, researchers should aim to make sure hypotheses are clear and functional before gathering research to support their ideas. Previous research has shown that advertisements on social media, specifically Facebook, influence and increase sales over time (Brettel, et al., 2015). Studies have also shown that usergenerated content that had a positive attitude had significant influence on purchase intentions

10 EFFECTS OF TARGETED ADVERTISING 10 (Knoll & Schramm, 2015). It is clear the research surrounding targeted advertisements shows it has significant influence on consumer behavior. While our study did not support these results, the framework has been set for further research to be conducted.

11 EFFECTS OF TARGETED ADVERTISING 11 References Boyd, D. M. and Ellison, N. B. (2007). Social Network Sites: Definition, History, and Scholarship. Journal of Computer-Mediated Communication, 13: doi: /j x Brettel, M., Reich, J., Gavilanes, J., Flatten, T. (2015). What Drives Advertising Success on Facebook? An Advertising-Effectiveness Model. Journal of Advertising Research 55(2): Fulgoni, G.M. (2015). How Brands Using Social Media Ignite Marketing and Drive Growth. Journal of Advertising Research, 55(3), doi: /jar Knoll, J., & Schramm, H. (2015). Advertising in social network sites -- Investigating the social influence of user generated content on online advertising effects. Communications: The European Journal of Communication Research, 40(3), doi: /commun Leaver, T. (2013). The Social Media Contradiction: Data Mining and Digital Death. M/C Journal, 16(2), 6. Yeo, T.E.D. (2012). Social-Media Early Adopters Don t Count: How to Seed Participation in Interactive Campaign by Psychological Profiling of Digital Consumers. Journal of Advertising Research, Vol 52(3),

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