Management Research Project – “Social Networking Site

Marketing”

A MRP Project
Final Report
on
Emergence of Social
Networking
Sites as a Marketing Tool

A Report Submitted in Partial Fulfillment of the Requirements of

PGPBA Program Of ICFAI Business School
Date of Submission: 23rd Feb, 2010

SUBMITTED TO:-

FACULTY GUIDE :-
Submitted by:

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 Management Research Project – “Social Networking Site
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Prof. Pravin Patil
Saurabh Jain
ICFAI Business School,
08BS0003007
Pune
9765897082

TABLE OF CONTENT

Sr. No Particulars Page

No.
1 Chapter I: Abstract 3
2 Chapter II: Acknowledgement 4
3 Chapter III: Introduction 5
4 Major Networking Sites 10
5 Pros and cons 15
6 Future Scope 18
7 Dynamics of Social Networking 20
8 Method of Advertising 21
9 Advertising Cost 21
10 Chapter IV: Methodology 27
Questionnaire 28
Chapter V: Analysis 29
Observation 33
Recommendation 33
Limitation 34

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Conclusion 34
Reference 35

Chapter I
ABSTRACT

Social networking sites offer people new and varied ways to communicate via the
internet, whether through their PC or their mobile phone. Examples include MySpace,
Facebook and Bebo. They allow people to easily and simply create their own online
page or profile and to construct and display an online network of contacts, often called
‘friends’. Users of these sites can communicate via their profile both with their ‘friends’
and with people outside their list of contacts.
The rapid growth of social networking sites in recent years indicates that they are now a
mainstream communications technology for many people. Whilst once the domain of the
information seeker and the passive web surfer, the Internet has evolved to become a
truly social media environment; an interactive environment that now sees a free-flow of
information and conversation. In line with this evolution, we have seen the balance of
power shift from the marketer to the consumer, from the communicator to the receiver
through social media platforms such as YouTube, MySpace, Orkut and more recently,
Facebook, Big Adda etc. Currently it is estimated that during an average adult’s day, a
total of nine hours is spent surfing the net. It is anticipated that this time commitment will
increase significantly as social networking becomes mainstream.

Since consumers are now able to control the ebb and flow of information,
marketers and advertisers are coming to recognize that, in order to succeed in the new
digital world, they need to re-think their strategies. Social media is seen as an emerging
communication environment for many. Indeed it appears that many media practitioners,
marketing agencies and advertising agencies are continuing to apply traditional planning
strategies in this new environment. In this report, my objective is to highlight the growing
importance of online advertising, especially social advertising in the social media
environment. The thesis seeks to do this by addressing the principal research question
“What strategies can be successfully employed by advertising and marketing
practitioners within the social networking platform?”
From the investigation it has identified that word of mouth is the most powerful
form of advertising in Web 2.0, and to harness this form of advertising, advertisers need
to build trust and continuously engage the consumer via various online activities. By
developing a high level of engagement with the consumers through the use of interactive

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online activities, consumers’ positive word of mouth may be generated, facilitating a
successful online marketing strategy.

Chapter II
ACKNOWLEDGMENT

I take immense pleasure in pursuing this project and submitting the Final
Project Report.

This project has been a platform in my learning about how the Social
networking sites can be used as a marketing tool and along this it has also
provided the platform to acquire knowledge in this area. I am deeply
indebted to my institution ICFAI BUSINESS SCHOOL, Pune to provide me
an opportunity to undergo such a project, which gave me thorough insights
and experience of the online marketing that will always remain a milestone
in the path of my successful career.

This is a known fact, a successful project can never be prepared by the

single effort of the person to whom project is assigned, where it also
demand the help and guardianship of some conversant person who helped
the undersigned actively or passively in the completion of successful
project.

In this context as a student of ICFAI BUSINESS SCHOOL, Pune I would

like to express my gratitude to Prof. Pravin Patil (MRP Project Guide) for
assigning me such a worthwhile topic “Social networking sites as a
marketing tool” I am indebted exclusively to my MRP Mentor Prof. Patil,
who seized some ample time to go through this project and acted as a
guiding light in giving valuable insights for making the project better. And
finally yet importantly those great thinkers’ notes in the respective websites
without which this project wouldn’t have been informative.

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Chapter III

INTRODUCTION

Websites like MySpace, FriendFinder, Classmates, or Yahoo! 360- What do all of these
websites have in common? They are known as social networking websites. Social
networking websites, over the past few years, have rapidly increased in popularity, so
much that many are wondering why.
If one have used a social networking website before, it is likely that he is already fully
aware of their popularity and the reason for popularity. There is just something about
these websites that draw in millions of internet users. With a wide variety of different
social networking websites available, there are a wide variety of different reasons for
their popularity. One those reasons being the ease of use.
Social networking websites are, for the most part, easy to use. Most sites are easy to
navigate. In fact, many require little knowledge of the internet. In addition to being easy
to navigate, social networking websites also make it easier to meet new people online.
There are many internet users who would love to make new friends online; however,
that can sometimes be difficult do. Without social networking websites, you would have
to connect with internet users, often in chat rooms, and learn about their interests before
deciding if you would like to consider them your “buddy.” Social networking sites allow
you to learn information about another internet user before ever having to make contact
with them.
Another one of the many reasons why social networking sites are popular is because
many are free to use. In fact, the majority of social networking sites, such as MySpace
and Yahoo! 360, are free to use. Despite being free to use, many websites require that
you register with them. This registration will not only allow you to create your own profile
or online webpage, but it will also allow you to contact other networking members.
.

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Pepsi & Dell Advertisements on Facebook

Although most social networking websites are free to use, there are some that are not.
Classmates is one of those websites. Many of these websites give you a free trial
period or a free membership. That membership can be used to help you determine
whether or not the website is worth paying for. What is nice about paid online social
networking websites is that many can be considered exclusive. Since most internet
users would not want to pay for something that they can get for free, most paid social
networking sites are limited on the number of members they have. This may work out to
your advantage because it tends to eliminate those who create fake accounts or aim to
cause controversy online.

Social networking websites are also popular because they come in a wide variety of
different formats. Websites like Yahoo! 360 and MySpace focus on a wide variety of
different topics. This means that just about anyone can join. However, there are other
social networking sites out there that have a particular focus. These focuses may be on
a particular religion, political following, or hobby. Most specialty social networking sites
restrict the individuals that can participate in their network; thus, making your experience
more enjoyable.

Finally, social networking websites focus on meeting new people, especially online, but
over recent months, many have started including additional features only available to
their online members. Many social networking members can receive their own free
webpage, get free access to popular music videos, a free blog, and much more.
Although social networking websites are popular enough to bring in members on their
own, these additional features are, in a way, providing internet users with an incentive to
join.
Mentioned above were a few of the most popular social networks that could be found
online. Those networks included MySpace, Yahoo! 360, and Classmates. If you are

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looking for additional social networking websites, you should easily be able to find some
by performing a standard internet search.

The goal of marketers interested in creating successful online marketing

programs is to identify individuals with high Social Networking Potential (SNP) and
create advertisement accordingly that appeal to this segment of the population and
have a high probability of being passed along. This social network advertising is also
sometimes used negatively to refer to stealth marketing campaigns - the use of
varied kinds of astroturfing both online and offline to create the impression of
spontaneous word of mouth enthusiasm.

This postulates that successful marketing campaigns trigger an emotional

response in recipients. Working under this premise, examines the effects of
messages containing the six primary emotions (surprise, joy, sadness, anger, fear,
and disgust) on recipients' emotional responses to viral marketing campaigns and
subsequent forwarding behavior.

According to findings, in order to be effective, messages need to contain the element

of surprise. By itself, however, surprise is not enough to guarantee message
success; therefore, it must be combined with other emotions. The effectiveness of
the message is also moderated by gender, with disgust-based and fear-based
campaigns being more likely to be forwarded by male recipients than female
recipients. To ensure forwarding behavior, the message must capture the
imagination of the recipient, as well as be clearly targeted. Moreover, achieving fit
between a campaign and the featured emotions is important, as this ensures an
increased chance of forwarding. In addition to relaying these and other findings,
shares and discusses the managerial implications of using different emotions in
marketing campaigns Social network site marketing uses electronic communications
to trigger brand messages throughout a widespread network of buyers. Often, the
process is portrayed as a random, ground-up phenomenon over which marketers

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have little control. But an examination of successful marketing cases reveals a
number of strategies underpinning this chaotic phenomenon, providing insight into
how marketers can use it to position their brands, change their image, and increase
adoption rates. Successful marketing campaigns have an engaging message that
involves imagination, fun, and intrigue; encourages ease of use and visibility; targets
credible sources; and leverages combinations of technology.

The online technologies mentioned above developed in the context created by the
e-tailers; they are widely used these days by B2C and B2B organizations. Social
network marketing is a generic term utilized for a wide range of activities –
advertising, customer communications, branding, fidelity programs etc. – using the
internet. More than the simple development of a website, the it focuses on online
communications, direct dialog with consumers who thus participate to the creation of
new products, finding efficient methods to win customer's fidelity and ease their
business-making process. This Marketing is the sum of activities a company makes
with the purpose of finding, attracting, winning and retaining customers.

A Multi-channel Communications Strategy

Customized for Individual Prospects and Customers

Across a defined customer lifecycle

Which…

Delivers the Right Value Proposition

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Accompanied by the Right Message

With the Right Tone

At the Right Time

With the Right Frequency and Interval

Using the Right Media / Communications channels

To achieve…

Right balance of value between both parties

Social networking sites are used as an Internet marketing tool, refers to 'how'
businesses market their services or products online. In this new age of technology, an
Internet presence directly affects the success of a business.The whole scenario
describes how the ubiquitous Internet will hasten the demise of the destination Web site
and open up scads of opportunities to reach customers through marketing
"mobilemediaries," such as messages through flash games and banners on known sites
spread throughout this virtual world.

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The hardest task for any company is to acquire and retain a large customer base.
Through the use of the internet and the effects of e-mail advertising, the business-to-
consumer (B2C) efforts have a greater impact than many other tools of marketing.
Social network marketing is a technique that avoids the annoyance of spam mail; it
encourages users of a specific product or service to tell a friend. This would be a
positive word-of-mouth recommendation. One of the most successful perspectives found
to achieve this customer base is the integrated marketing communication IMC
perspective.

MAJOR SOCIAL NETWORKING SITES-

1) Bebo.com

Jim Scheinman is the founder of Bebo, a site that was launched in July 2005. Soon after
its launch, the site appeared at the top of the Google Zeitgeist list in 2006. The site was
also reported to be the overall top ranking website in Ireland, edging out Google and
Yahoo (Dower, 2007). By mid 2007, Bebo had about 2.5 million registered users with up
to 450 million page views per month. Over the six month period, September 2006 to
March 2007, site traffic grew by 49%. The average time individuals spent at Bebo is
28.58 minutes compared with 26.26 minutes for MySpace. Bebo is unique when
compared to MySpace, in that it is better organized and less cluttered.
In an advertising context, the Bebo advertising model is different in that it applies a
social advertising context to interruptive marketing – conversation rather than
interruption. At Bebo, users have the option of what type of advertising they would like to
have appear on their profile page. In this way advertising is not only attractive to
marketers but also to the site user. Individual users will be receiving relevant advertising
messages, and because they are actually choosing what type of advertising they would
like to see, advertising that is shown on the profile page creates a higher attention rate.

Bebo - Disney “Cars”

Disney approached Bebo with the intention of building a community that enabled
participation among Bebo-ers. The objective was to build campaign awareness through
viral communication on the social networking site, as Disney recognized the need to
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move their consumer from passive recipients of the film messages to active and
engaged consumers (Disney Promotions Executive, as cited in Bebo presentation).
The overall results of the campaign were as follows: -

Video Views : 45,000 people

Sponsored Profile Views : 90,000 views
Video Homepages : 5,000 views
Skin Homepages : 2,700 downloaded
Friends : 2,200 friends
Profile Comments : 1,000 comments

2. MySpace.com

MySpace was founded in August 2003. The acceleration of awareness of MySpace

was facilitated through its acquisition by News Corp for US$580 million (Hitwise,
2006). This is a strong indication of the value placed on these web properties by web
publishers, marketers and advertisers. MySpace claims to be the world’s largest
social networking site with 200 millions users worldwide, 4 million users in India, and
at least 1.13 billion page impressions.

MySpace’s audience splits are as follows:

 57% of all 14-17 year olds
51% of all 18-24 year olds
20% of all 25-39 year olds

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MySpace Secret Shows
Show usually features music artists, including both local and international bands and
MySpace users who join this viewer group gain exclusive invites to these gatherings.
The Secret Show case study shows that engaging consumers both online and offline is
equally important because they actually allow the brand to be more personal and
relevant to the consumer. Hence, it is now becoming more common to see a brand
utilize offline to drive traffic to the online page, and from the online page, encourage
them to participate in the brand’s offline activities. These are all important strategies of a
truly integrated campaign.
2) Facebook.com
Facebook was founded by Mark Zuckerberg, and was launched in February, 2004. In
India, there are at least 380,000 active users monthly, 70% recorded having geographic
location as their primary network, 26% have college as their primary network and 4%
have high school as their primary network.
In India, 56% of Facebook users are female, 4% are under 18 years old, 49% are
between 18 and 24, 35% are 25 to 34, and 12% are over 35 years old. In India last year
there were about 514 million page views monthly with at least 1,334 average page views
per user In the US, Facebook was the number one site in 2007 among both male and
female 18 to 24 year olds.

Red Bull – Roshambull Cmapaign on Facebook

Red Bull ‘Roshambull’ is an application that was created for Red Bull. As shown in
Figureit is an online version of the classic rock, paper, and scissors game. Although it
seems to be strange to be playing this game online, it is a perfect match for the
Facebook community. This application allows users to add Roshambull to their
Facebook profiles and then to invite friends to battle. This game is not the usual kid’s
game, in that it leverages Facebook technology to actually create a scouting sheet that
can be used to help players decide what to throw, Before one makes the next throw,
they can also check their friend’s stats and see what they have been throwing in the
past. This concept not only makes the game harder but also highly engaging, as the
individual is constantly trying to out-strategize their opponent.

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Customer Loyalty for sites

3) Orkut.com
Although Orkut is less popular in the United States than
competitors Facebook and MySpace, it is one of the most visited websites
in India and Brazil. In fact, as of May 2009, 49.83% of Orkut's users are
from Brazil, followed by India with 17.51%. Originally hosted in California, in
August 2008 Google announced that Orkut would be fully managed and operated
in Brazil, by Google Brazil, in the city of Belo Horizonte. This was decided due to
the large Brazilian user base and growth of legal issues. Orkut was launched on
January 22, 2004 by google as independent project of Orkut Büyükkökten, The
community membership was originally by invitation only. Orkut's explanation for
invitation.

Social networkers fall into distinct groups

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Social networkers differ in their attitudes to social networking sites and in their behavior
while using them. These are as follows:
1) Alpha Socialisers – (a minority) people who used sites in intense short bursts to
flirt, meet new people, and be entertained.
2) Attention Seekers – (some) people who craved attention and comments from
others, often by posting photos and customising their profiles.
3) Followers – (many) people who joined sites to keep up with what their peers
were doing.
4) Faithfuls – (many) people who typically used social networking sites to rekindle
old friendships, often from school or university.
5) Functionals – (a minority) people who tended to be single-minded in using sites
for a particular purpose.

Non-users of social networking sites also fall into distinct groups-

Non-users also appear to fall into distinct groups; these groups are based on their
reasons for not using social networking sites:
1) Concerned about safety – people concerned about safety online, in particular
making personal details available online.
2) Technically inexperienced – people who lack confidence in using the internet
and computers.
3) Intellectual rejecters – people who have no interest in social networking sites
and see them as a waste of time.

Social Network site Marketing is definitely the future of Online

Advertising, but let us look at some points which could be plaguing its
growth in India:

1. Lack of enough Paying Customers:

Travel is a completely revenue driven domain and one of the prime drivers of e-
transactions in India. IRCTC (Indian Railways) is our country’s largest E-
Commerce driver. Travel sees an enormous amount of online consumers. But
users are still uncomfortable at the thought of making other regular purchases
online.
I would still do all my pre-purchase research of an Electronic gadget online – and
prefer buying it offline. Unless the price advantage online is huge. Contextual
Marketing can be used to a certain extent for classifieds.
2. Lack of Advertisers:
This Marketing will work wonders for global advertisers.
If I’m searching for information about a Vacuum Cleaner and you show me the

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ad of the nearest shop to my place which sells it – Perfect.
Then again – franchisee outlets wouldn’t want to advertise on a national level.
Often it’s the unpredictability and the curiosity which a banner creates, which is
the main reason it results in a click-through. Contextual Marketing would ensure
greater ROI for the clients. It would also mean genuine leads, but it would also
mean lesser prospective numbers for Marketing Managers to show to their
bosses. Agencies would have to sacrifice some income as volumes of banner
impressions would be lesser for targeted ads.

Currently we are in a phase, where everyone is on a customer and number

acquisition spree. The value and engagement is something almost everyone is
keeping aside for the future.

3. User Backlash:
Google was ranked the worst when it came to handling a user’s privacy. It’s a
very fine line between invading a user’s privacy and serving him better. Currently
getting contextual ads might not appeal to users as a benefit.
4. Behaviour:
Behaviour targeting should be used in sync with user demographics – display of
related linked products. Link regular business travelers to a smart phone,
executive clothing etc.

PROS AND CONS OF SOCIAL NETWORK MARKETING

Why harness social networking?

There are five distinct advantages to social marketing make it a vital tool to any
marketing campaign. Here they are:

1. Better Targeting
If carried out properly, social marketing can draw a highly targeted segment of Internet
users to visit your business or Website. This can be done by using the various
parameters elements and tools on social media websites, enabling you to increase
visibility of your content on both a local and global level. Many small business can not
only benefit from this global audience, but increase their brand by bringing in a more
select local audience.

2. High Return on Investment

ROI (Return on Investment) is one of the most important criteria of most marketing
campaigns. For small businesses with low budgets, the marketing ROI needs to be good
for it to work. Social marketing is one of the cheapest ways of marketing currently
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available. And practically all the social media you can use to market your business either
costs nothing or costs a very small amount. This low investment means low risk to even
the smallest business. Considering that most businesses gain a big pop in visibility after
using social networking tools, the advantage is ultimately getting good publicity for free.

3. Does not require specialization or vast technical skills

One of the best advantages of social marketing is that anyone can take advantage of it,
even from their own home. Also, it does not require you to learn a coded language or
anything of that sort. Most social networking sites are visually oriented and pretty
straightforward, which means that practically anyone who understands how to use the
Internet can use social networking tools.

4. Works better than online ad campaigns

Because most Internet users are bombarded with ads every day, as a whole society has
become so used to them people generally do not click on them. Banners and even link
ads are losing their charm because many people do not trust an online advertising
campaign backed by money. With social marketing, you can provide a more human
touch to attract potential customers.

5. Increased visibility
Social marketing, like blogging, can help to spread information. This information can
then be correlated to your site, increasing your site's popularity. Create new content that
people really need and you'll have no problem drawing people to your site.

Some Other Benefits-

• Credibility and Trust

Connecting with prospects on a personal level builds trust and credibility. A general rule
of thumb is to offer your services, expertise or help before you ask for it. It is acceptable
to promote your services when asked. If you’re not careful, your attempts could be
considered spam. Instead, wait for the opportunities to present themselves instead of
forcing a situation.

• It’s Who You Know

When you socialize, you meet others who know others. How are you going to meet the
president of a large corporation? You start by talking to his friends. You ask your
associates if they know someone who is connected with him And on and on.

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Social networking relationships are supposed to benefit both parties. Never take more
than you give. When the opportunity presents itself, don’t be afraid to ask your contact to
introduce you to a prospect. The old saying rings true: it’s not what you know; it’s who
you know.

There are many reasons to employ social networking as a marketing tactic. Ensure that
you have extra time to spend. While it’s true that the upfront costs are less, this method
takes up a lot of time in research and building relationships.

Disadvantage of Social network marketing-

1) The targeting is so low because people in those sites are diverse

2) Most people don't bother about the advertisements on social networking sites
because they are often after the people they could meet on those sites.
3) Because of the spam advertisements on the social networking sites, the
advertisements are given few notices by real customers.

Organization is required to stay abreast with all upcoming sites and be ready to make
the necessary change. If they are not adaptive, then it might be in trouble because social
media in nature will change constantly. They need to keep in touch with all the latest in
this industry because this is the sure way to safeguard the interests of your business.
Remember, social networking for business gain will help organization move to heights
that it has not been to before. Therefore, know the pitfalls discussed and steer clear of
them if organization wants to win in this game.

Viral viewers become virulent toward corporations they perceive as dishonestly

manipulative. Social networking sites like MySpace, Facebook and YouTube encourage
user comments that expose your creations to unflattering feedback. Unsurprisingly,
Jupiter Research discovered that 69 percent of online users distrust product information
from social media sites--the very locations that link and host most virals. So even if you
reach your dream distribution, the message seeping through may be contrary to your
intent.
We jump on this bandwagon because breakthrough success rely on consumers to
spread the word among colleagues. Media costs virtually nothing, allowing potentially
unprecedented returns on investment. MarketingExperiments.com concluded recently
that videos on social networking sites generate 750 percent more click-throughs than do
paid banner ads. Sounds promising - if those clicks lead to sales.
FUTURE SCOPE

With consumers showing increasing resistance to traditional forms of advertising such

as TV or newspaper ads, marketers have turned to alternate strategies, including

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viral marketing. Viral marketing exploits existing social networks by encouraging
customers to share product information with their friends. Previously, a few in depth
studies have shown that social networks affect the adoption of individual innovations and
products. But until recently it has been difficult to measure how influential person-to-
person recommendations actually are over a wide range of products. There needs to be
a greater understanding of the contexts in which viral marketing strategy works and the
characteristics of products and services for which it is most effective. This is particularly
important because the inappropriate use of viral marketing can be counterproductive by
creating unfavorable attitudes towards products. What is missing is an analysis of viral
marketing that highlights systematic patterns in the nature of knowledge-sharing and
persuasion by influencers and responses by recipients in online social networks.”

Here we were able to in detail study the above mentioned problem. We were able to
directly measure and model the effectiveness of recommendations by studying one
online retailer’s incentives viral marketing program. The website gave discounts to
customers recommending any of its products to others, and then tracked the resulting
purchases and additional recommendations.

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Email services such as Hotmail and Yahoo had very fast adoption curves because
every email sent through them contained an advertisement for the service and
because they were free. Hotmail spent a mere $50,000 on traditional marketing and still
grew from zero to 12 million users in 18 months. The Hotmail user base grew faster
than any media company in history – faster than CNN, faster than AOL, even faster than
Seinfeld’s audience. By mid-2000, Hotmail had over 66 million users with 270,000
new accounts being established each day . Google’s Gmail also captured a
significant part of market share in spite of the fact that the only way to sign up
for the service was through a referral.

Most products cannot be advertised in such a direct way. At the same time the choice of
products available to consumers has increased many fold thanks to online retailers who
can supply a much wider variety of products than traditional brick-and- mortar stores.
Not only is the variety of products larger, but one observes a ‘fat tail’ phenomenon,
where a large fraction of purchases are of relatively obscure items. On Amazon.com,
somewhere between 20 to 40 percent of unit sales fall outside of its top 100,000
ranked products. Rhapsody, a streaming-music service, streams more tracks outside
than inside its top 10,000 tunes. Some argue that the presence of the long tail indicates
that niche products with low sales are contributing significantly to overall sales online.
We find that product purchases that result from recommendations are not far from
the usual 80-20 rule. The rule states that the top twenty percent of the products account
for 80 percent of the sales. In our case the top 20% of the products contribute to about
half the sales.
Effectively advertising these niche products using traditional advertising approaches
is impractical. Therefore using more targeted marketing approaches is advantageous
both to the merchant and the consumer, who would benefit from learning about new
products.

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THE DYNAMICS OF MARKETING IN SOCIAL NETWORKING SITES

Recommendations that one receives from a friend or relative is very important. It is

human nature to be more interested in what a friend buys than what an anonymous
person buys, to be more likely to trust their opinion, and to be more influenced by their
actions. As one would expect our friends are also acquainted with our needs and tastes,
and can make appropriate recommendations. A Lucid Marketing survey found that 68%
of individuals consulted friends and relatives before purchasing home electronics – more
than the half who used search engines to find product information.
In my study I am able to directly observe the effectiveness of person to person word of
mouth advertising for hundreds of thousands of products for the first time. We find that
most recommendation chains do not grow very large, often terminating with the initial
purchase of a product. However, occasionally a product will propagate through a very
active recommendation network.
Moreover, the characteristics of recommendation networks influence the purchase
patterns of their members. For example, individuals’ likelihood of purchasing a product
initially increases as they receive additional recommendations for it, but a saturation
point is quickly reached. Interestingly, as more recommendations are sent between the
same two individuals, the likelihood that they will be heeded decreases.

Critical Success Factors For Social Networking Sites:

 High reach.

 High tangibility.

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 Catering to Masses as well as classes.

 Appealing to both educated as well as uneducated Class.

 Booming Mobile Market boosting the reach of social networking sites.

Methods of Advertising on Social Networking Sites

There are three predominant methods of advertising on social networking sites:

• CPM: CPM stands for "cost per mille," with per mille meaning the cost per one
thousand impressions.
• CPC: CPC stands for "cost per click." In this scenario, the advertiser pays the
social network a specific amount of money for every visitor that clicks through the ad
and visits the product or service website.
• CPA: CPA stands for "cost per acquisition, and is also known as affiliate
marketing. In this type of advertising, the social network publisher only gets paid
when someone actually makes a purchase at the vendor's website. Amazon is an
example of affiliate marketing.

Orkut Facts-

Over 13 million active users, more than 40% of the Indian online population

Over 5 billion page views in India each month

Average user visits the site 10 times each month, spending over 13 minutes per visit.

Facebook Facts-
• More than 400 million active users
• 50% of our active users log on to Facebook in any given day
• More than 35 million users update their status each day
• More than 60 million status updates posted each day
• More than 3 billion photos uploaded to the site each month
• More than 5 billion pieces of content (web links, news stories, blog posts, notes,
photo albums, etc.) shared each week
• More than 3 million active Pages on Facebook
• More than 1.5 million local businesses have active Pages on Facebook

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ADVERTISING COST

Facebook

• Advertising cost- CPM is Rs. 130

CPC is Rs. 0.34 (Source : allfacebook.com)

Orkut: CPM is Rs. 118

Bid Adda: CPM is Rs. 110

Source : Pluggdin.com

Radio Advertising Rates

Delhi Mumbai Chennai Kolkata Ahmedabad/ Indore

Day parts Time Band
Pune

2500 2500
7- 8 Am
8-10 Am Family 5000 4000 1500 1400 1200 700
Prime
10-11Am 2500 2000

Housewife
11Am to 2
Pm Prime 2000 2000 900 850 750 400

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2- 5 Pm Youth 1700 1700
Prime 850
900 750 400

5 – 6 Pm 2000 2000
6 - 8 Pm Evening 3000 2500 1500 1400 700
1400
8 - 9 Pm Drive Zone 3000 2500

9 Pm – 12 Youth
Mid Night Prime
1700 1700 900 850 850 400

Source - www. Radiomirchi.com

TV Advertising Rates

Zee TV- Rs 1.5 lacs to Rs 2 lacs per 10 second spot

Sab TV- Rs 25000 to Rs 50000 for 10 seconds.

Star TV- Rs. 2 lacs- Rs. 3 lacs for 10 seconds

Colors TV- Rs. 1 lac per 10 seconds

(Source: Indiatoday, April 2009)

TYPES OF SOCIAL NETWORKING ADS

In addition to the various methods of advertising, there are also numerous varieties of
social network ads. These include:

• Floating ads: These ads move across the screen of a specific web page
• Trick banners: These are the least popular form of ads, because they resemble
an error message. The banner might have a dialogue box, which tells you that your
computer is not secure, and certain actions must be taken. If you take these actions,
you are brought to the advertiser's website.

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• Pop-up ads: Pop-up ads display the advertising in a new window.
• Video ads: As the name implies, a video ad is similar to a television ad, since it
displays a video that advertises the product.

Suggested Best Practices for Advertising on Social Networking Site

1. Identify your advertising goals

As an advertiser paying for clicks, you are indicating that what is most important to you
is driving traffic to a page on Facebook or your own website. You will want to focus on
making sure your ad is highly targeted to the most relevant, appropriate audience. Your
landing page should be set up to let users easily find what your ad offers.

As an advertiser paying for views (impressions), you are indicating that it is most
important for users to see your ad. You will want to focus on making your ad as clear
and informative as possible and having your brand or company's name be easily
recognized.

2. Targeting
Target the audience that you believe will be interested in your ad. For each ad, you can
choose to target a particular location. Be sure to target only the locations that are
relevant for your business or product. For example, if your service or event is only
available in a particular area, target the appropriate region or city. Also, please be aware
that an ad is typically best received if the ad is in that country's primary language.

3. Keyword Targeting
Keywords are a powerful way to narrow the audience of your ad to people who have
interests which correlate with your offer. Include your keywords in your ad text to show
users that your ad relates to the people you are trying to reach.

4. Make your product stand out

Write clear, targeted ads with concise text that speaks directly to the audience you will
reach. Be sure to highlight any special offers or unique features that differentiate you
from the competition. If your goal is brand/company name recognition, we suggest using
your company name in the ad title or somewhere in the body of the ad.

5. Keep your ad simple

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Create your ad so that it is as simple and easy to read as possible. Avoid long
sentences or complex punctuation. Use simple, grammatically correct, complete
sentences and language. Use proper punctuation, punctuate the end of sentences, put
spaces after periods and commas, and don't use hyphens in place of periods.

Don't try to fit every detail about your product or service into the ad. Make it clear what
your product or service is so a user can tell what your website will be about, but save the
details for your landing page.

6. Use a strong call-to-action

Your ad should convey a call-to-action along with the benefits of your product or service.
A call-to-action encourages users to click on your ad and should explain to the user
exactly what you expect them to do when they reach your landing page. Some call-to-
action phrases include: buy, sell, order, browse, sign up, and get a quote.

7. Use an image
Put an attractive, relevant image in your ad that is appropriate for the product or service
being advertised. The maximum image size is 110 pixels wide by 80 pixels tall, so text in
images that are shrunk down to that size may be hard to read.

8. Landing pages
Your ad should direct users to the most relevant landing page. When a Facebook user
clicks on your ad, they should be taken immediately to a page that is specific to the
information or product in your ad.

9. Keep the user experience in mind

You should aim for your ads and their respective landing pages to be as attractive, easy
to navigate, and informative as possible. Users may be less likely to click your ad if it
does not accurately describe your product or service, if it is unclear where they will be
directed after clicking, or if it is unclear what the benefit of clicking your ad would be.
Make it easy to find important information by placing it prominently on the landing page.
Users who have to click around to find the relevant information are more likely to leave
your site.

10. Evaluate your campaign performance and make the necessary changes
Monitor your ad's performance. Your click through rate (CTR) is a particularly good
indicator of how well your ads are doing. You can also view your clicks, impressions and
average CPC or CPM by checking your account.\

Allow your ad performance to educate you about effective strategies for achieving your
goals. As you observe your ads over time, you might notice things that are working

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especially well (or not so well). For example, if you find users aren't responding to a
particular call-to-action in your ad text, try a different call-to-action. If you are not getting
as many clicks as you would like, try adjusting your targeting to be less restrictive if you
have originally have been very aggressively targeting, or more restrictive if your
targeting was initially very broad. If you are not getting as many impressions as you
would like, try making your ad simpler and the product or brand easier to recognize.

SOCIAL NETWORK ADVERTISING V/S. SOCIAL NETWORK MARKETING

While social network ads may not be as effective as hoped, many companies have had
enormous success with social network marketing. Even better, this can be done without
incurring any significant cost. Businesses and services can create their own pages on
MySpace, and post regular bulletins to update their fans about their latest products.
As well, many companies are now setting up pages on Facebook, and encouraging
friends to become fans. Some companies are using the microblogging site Twitter as a
means of answering questions and offering quick updates to their regular and potential
customers. For example, United Airlines has a clever program called "Twares," which
are periodic, exceptionally good airfare deals that are only available to their followers on
Twitter.
The ability to interact with, and receive feedback from potential and devoted clients is
the main difference between social network advertising and social network marketing.
The jury is still out as to which is the more effective method. Only time will tell.

Chapter IV
METHODOLOGY

 First phase (Secondary Data Collection.) - It will be focused on study and

analysis of secondary sources of information and data to understand the
structure, mechanism of advertising business and will provide strong base for
future course of study and actions.

This phase is concerned with first getting the tip of the ice berg by availing all the basic
and necessary information from all concerned secondary data sources. This will set the
platform for further journey into the deepness of this topic. This study will give basic
input about the popularity of Social Networking Sites and will craft the blue print for
further analysis and will define the role of marketing’s changing waves into social
networking sites.

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 Second Phase (Primary Data Collection.) - It will deal with the practical
insights in social sites marketing business by adopting primary data collection
approach with focus group study in Pune region and interaction with the target
Group.

After getting sufficient background information about the existing marketing practices of
the companies in social sites, it’s time for getting help of primary data by the way of
survey among target audience. The survey will show the true picture regarding the
response and the taste of the people towards social sites and will guide my findings and
recommendations.

***All the necessary information is mentioned in Survey section. Refer To Attachments.

Survey Criteria

Sample Size -90

 3 Categories.

 30 People Per Category.

1. Children (Age group- 7-16 yrs)

2. Youths
3. Adults

***Basic Criteria for Selecting A Respondent.

1. The person should have account in social networking sites.

2. The person should be the regular user of social networking sites.

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QUESTIONNAIRE

1. On an avg. How much time do you spend in social networking sites every day?
a) 1 hr
b) 1.5 -2 hrs
c) More Than 2 hrs

2. Preferable Time Slot

a) 7AM - 11 AM
b) 11AM - 2PM
c) 2PM – 5PM
d) 5PM – 9PM
e) 9PM - 12PM

3. Which is your favourite Social networking Website?

a) Facebook
b) Orkut
c) Twitter
d) Hi-5
e) Others (Pls. Specify) ...................................

4. What is the reason behind using a particular social networking website?

a) Legitimate Friend Focus

b) Networking Features
c) Security
d) Others Pls. Specify
5. The most viewed online advertisement

a) Realty Sector
b) Entertainment
c) FMCG Segment
d) Service Segment
e) Others Pls. Specify.

6. Do you feel that Social Networking Ads are interesting or the message is
conveyed in a proper Manner to the target Audience?
a) Agree
b) Don’t Agree
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7. Do Social Networking Ads influence the Purchase Decision you make?

a) Strongly Agree
b) Agree
c) Disagree
d) Don’t Agree
e) Strongly Disagree
Chapter V
ANALYSIS OF RESPONSE

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OBSERVATIONS:
• Children and youth are strongly influenced by advertisements on social
networking sites than adults.
• Most of the people use these sites to stay in touch with friends followed by
networking features.
• Facebook is the most popular site among all age groups and second comes orkut
followed by Twitter.
• Most of the Adults surf only for 1hr whereas youths use these sites maximum for
more than 2 hrs.
• Peak hours are 9pm -12 midnight among all the age groups.
• Adults prefer real estate advertisements whereas majority of children and youths
prefer entertainment advertisements.
• Mostly children find these online ads interesting whereas moderate number of
youth find these ads interesting and very less number of adults watch these ads.

RECOMMENDATIONS

1. Spam - Getting rid of the spam problem on is the number one top priority.
Customers get spam all the time and it's really frustrating and time consuming.

2. Tech support - This is a must. Tech support should always be quick. More than
48 hours is too long to wait when you have a problem. Even that's too long, but
let's be reasonable.

3. Slow- Web pages should be designed such that it doesn’t take too long for
pages to upload. In India many people still have slow internet connection and
hence it should be taken care of.

4. Mobile interface version should be launched so that people can surf the sites
quickly and easily on their mobile phones while on the move.

5. Social site should upgrade Anti Virus regularly to stop viruses from harming
customer desktops and laptops.

6. Feedback and queries and complaints should be dealt very seriously. It’s
important to retain the customer for longer period of time.

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Limitations of the study

 The project will be build on the basis of primary data and information so the
validity and reliability of sources will play a critical role for the soundness of the
project.

 The project is not considering the details regarding the move of backward
integration by corporate world in the future.

CONCLUSION

All businesses aim to increase their audience. Before the Internet, many spread the
word through word of mouth. Social marketing has now taken over as the online version
of word of mouth. Harnessing it in the right way results in more customers, more sales,
and a higher level of visibility online than ever before. It’s the users not the advertisers
who are in control, so whatever users like will always be successful. The quality of the
material in terms of its ability to inspire users is therefore the vital benchmark. Therefore,
I concur by saying, “Audiences will become more demanding. This will make it all the
more important to get it right.” This is what I can recommend the marketers about social
networking and the changing future trends of the marketing web.

Social sites needs to grab the attention of users by being a little more selective. Internet
has now become an integral part of people’s lives. Available in almost all the countries,
radio has now become a global medium. In recent years, its presence can be felt in a
significant way. Advertisers should now realize that social site is no more just a time
pass, instead it has become a part of people’s lives.

Having the right mix of creativity and frequency, social site ads can act as the most
effective and efficient medium that any business can actually have. As compare to other
media, these are costlier but advertiser can very well target his customers . It can use
the emotions of the humans to capture the minds, thus having power to turn ordinary
customers into lifetime customers.

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References:

http://www.deloitte.com

http://blog.nielsen.com/nielsenwire

http://www.adonomics.com

http://www.doubleclick.com

http://www.imediaconnection.com

http://www.clickz.com

http://www.internetworldstats.com

http://www.web-strategist.com

http://www.jupiterresearch.com

http://www.ciadvertising.org

http://www.gigaom.com

http://www.pg.com

http://www.google.com

http://www.emarketer.com

The company details are from the official website

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4P’s Magazine

Business Today Magazine July 2009

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