Social Networks: Usage Intensity and Effects on Personalized Advertising

By Wirtz, Bernd W.; Göttel, Vincent et al. | Journal of Electronic Commerce Research, January 1, 2017 | Go to article overview

Social Networks: Usage Intensity and Effects on Personalized Advertising


Wirtz, Bernd W., Göttel, Vincent, Daiser, Peter, Journal of Electronic Commerce Research


1. Introduction

The advent of globalization, the emergence of innovative information and communication technologies as well as the spread of the Internet have all increased the use of available online-services [Hofacker and Murphy 2009; Ma and Agarwal 2007]. Recent developments include the rise of the Web 2.0 and social media in the beginning of the 21st century. The continuing evolution of the technologies is very dynamic in nature and constantly brings forth new platforms and applications, such as social media and associated social networks, e.g., Facebook and Flickr in 2004, Twitter in 2006, Tumblr in 2007, 9GAG in 2008, Instagram and Pinterest in 2010, Google+ in 2011, Pheed in 2012 and Ello in 2014 [cf. Turri et al. 2013]. In this context, this study uses the term social media to refer to internet-based applications that allow to create and exchange user-generated content [Kaplan and Haenlein 2010]. Social networking sites are built upon this computer-mediated communication technology [Stern and Taylor 2007] and offer a web-based service that connects members of the network, who are tied to each other through one or more relations [Boyd and Ellison 2007; Tuten and Solomon 2013].

In view of the significance of social media for society, it has become increasingly popular to discuss the topic in academia and scientific research in recent years, including in the field of economics and business administration [Khang et al. 2012; Wirtz and Göttel 2016]. This is not surprising given that social media heavily influence the broader economy and business world which, in turn, leads the actors involved to use them for their own purposes. Thus, while the practical relevance of social media for a broad range of organizations is beyond dispute [Kaplan and Haenlein 2010; Lai and To 2015; Wirtz 2016], companies have started to engage with this new media type in the past decade to identify opportunities to enhance corporate well-being. At the same time, there have also been critical voices suggesting that users do not necessarily welcome companies and brands in social media, and recommending a very cautious and deliberate approach to the field [Fournier and Avery 2011]. Within the broad range of existing approaches to use social media, social networks have so far emerged as one of the most helpful instruments for companies and especially their marketing activities [Kaplan and Haenlein 2010]. For example, Facebook, one of the most popular social networks with about 1.35 billion monthly active users worldwide [Statista 2014], offers companies a wealth of marketing possibilities. The most obvious ones include own fan pages and thus brand communities, ad placement, and more interestingly, personalized ads.

Although the body of literature about social media is growing in general (e.g., Barelka et al. 2013, El-Haddadeh et al. 2012, Lane and Coleman 2012, Shin 2013), surprisingly there is a lack of comprehensive studies about personalized advertising in social networks and the corresponding acceptance, approval, or usage of such advertisements by social network members [cf. Li et al. 2012]. In this regard, our study seeks to identify determinants that influence the general usage intensity by Facebook members in terms of average hours spent and average posts made on Facebook per week. Thus, usage intensity is understood as users' actual activity, or in other words, as the degree to which users actively engage in the social network [cf. Ellison et al. 2007; Vitak et al. 2011].

Further, we investigate the relationship between usage intensity and the users' potential approval of personalized advertising on Facebook, and examine how both of these constructs impact the users' word-of-mouth intention with regard to the advertised products or services. In this connection, we also propose a mediating role of users' approval of personalized advertising in the relationship between their usage intensity and word-of-mouth intention. Thus, we try to shed light on the potential benefits of members' usage intensity for companies and organizations. …

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