Facebook advertising. The following study aims to highlight of the Western Cape's perceptions of Facebook advertising on purchase among Generation Z.
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THE EFFECT OF FACEBOOK ADVERTISING ON PURCHASING AMONGST GENERATION Z IN THE WESTERN CAPE Cohen JN, Odendal MRC, Duffett RG (Supervisor) Marketing Department, Business Faculty, Cape Peninsula University of Technology
(M2) Social Media Drive
(M3) Facebook City Center
567 m
Introduction In today’s modern times, more individuals are gaining access to the internet and as a result of the establishment of online global communities. Facebook is the leading social networking site, with over 1.23 billion registered users, which allows members to communicate and share content almost effortlessly (Sedghi, 2014). The ease of communication between social media users, as well as the advanced targeting opportunities that Facebook provides presents marketers with the opportunity to promote products and services to a vast number of specialised targeted consumers. Gustin (2012) points out that the effectiveness of Facebook advertising could be either positive or negative, but that relies on how well the advertisement is customised for its particular audience in order to generate the action of purchase. It is quite difficult to establish if Facebook advertising leads to the creation of purchase and it is because of this issue that there is a need for a study to establish the general behavioural attitudes towards Facebook advertising. The following study aims to highlight of the Western Cape’s perceptions of Facebook advertising on purchase among Generation Z.
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Problem statement and research objectives It has been established that Facebook is the largest social networking site currently and the opportunities it presents to companies in terms of advertising potential are vast however Perceptions towards advertising effectiveness of Facebook that it has towards conviction to purchase has not been measured, especially amongst the youth of South Africa. It is also established that little is known about the Facebook usage characteristics of Generation Z and whether or not it influences perceptions about Facebook advertising. It is because of these reasons that the objective of this study is to determine the general effectiveness of Facebook advertising has on the purchase behavior amongst Generation Z of the Western Cape.
Literature review A question that needs to be asked is whether Facebook advertisements are effective or not outside of South Africa? Wagner (2013) analyzed more than 131 billion Facebook advertisement impressions, and found that Facebook advertisements in 2013 were clicked 29% more frequent than in 2012 with a return on investment increasing by 58%. Lafferty (2014) reported that Facebook is indeed proving to be effective in terms of reach efficiency, with the year of 2013 covering approximately 10.5 million conversions, 145 billion advertised events and 61 billion impressions. Effective advertisements created by businesses often leads to the promotion of companies via word-of-mouth. This phenomenon is important, as WOM is unpaid promotion of companies from satisfied customers. Hourihan (2013) points out that Generation Z is a highly tricky target market to reach via advertising due to them being extremely technologically conscious, as well as extremely fickle with their disposable income, especially in terms of new products. Due to their high levels of online engagement, it is of paramount importance that companies as well as advertisers need to know what is important to them and what really motivates Generation Z (Hourihan, 2013).
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Research methodology and design
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The first step for the researchers was to establish the problem statement as well as the objectives of the study. Once the objectives and problem statement was established 600 respondents specifically from Generation Z (born 1995-2012) from the Western Cape were surveyed. The surveys were distributed using a systematic sample technique, as it provides a more accurate and unbiased opinion. The surveys consisted of multiple-choice questions and a Likert scale, which was used to determine the respondents’ general behavioral attitudes regarding advertising on Facebook. The responses were captured, analysed and then converted into meaningful graphs and descriptive statistics.
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Figure 3: Years of engagement
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Findings, discussion and analysis A majority of the respondents disagreed that Facebook advertising led to purchase (Figure 1). Anglova (2013) found that more than 50% of marketers who have engaged in social media marketing have reported a substantial increase in purchase of the products. It was found that access aspects did not affect the respondents’ response, since a majority disagreed that advertising on Facebook did not lead to a purchase (Figure 2). Musil (2013) revealed that the use of smart phones and tablets for online purchasing saw an increase of 81% in online sales in 2012 compared to the previous year. It was also found that the number of years that the respondents have been registered on Facebook played no role in their response, as a majority of respondents disagreed that Facebook advertising creates purchase predisposition (Figure 3). Our Social Times (2013) reported that 1 million websites are connected to Facebook, 23% of Facebook users log in at least 5 times per day, as well as 47% of Americans stated that Facebook was the top influencer of purchases. The research revealed that a majority of respondents disagreed that Facebook advertising caused purchase in terms of the number of times respondents logged on to their profile (Figure 4). Ahmad (2014) revealed that 71% of consumers are to be expected to make a purchase based on social media referrals. The study found that advertisements on Facebook did not play a role in time spent per log-in, with a majority disagreeing that it v\created purchase tendencies (Figure 5). Mackenzie (2014) disclosed that 84% of Generation Z reviews products and services using social media before they make a purchase. A majority of respondents disagreed that Facebook advertisements influenced purchase tendencies in terms of profile update incidence (Figure 6). Lafferty (2014) reported that Facebook is indeed proving to be effective in terms of reach efficiency with approximately 10.5 million conversions, 145 billion ad events and 61 billion impressions in 2013.
Conclusions and recommendations The research yielded very interesting findings relating to the effectiveness of Facebook advertising on Generation Z’s purchase perceptions. It was found that on average, Facebook advertising is not effective enough to lead to purchase amongst Generation Z of the Western Cape. It was also established that the factors of usage of Facebook did not have a favorable impact on the respondents’ purchase perceptions in terms of Facebook advertising. Companies need to use Facebook marketing communications need to cater for the interests of the South Africa youth in order to regain its effectiveness and so that they will become future consumers. Facebook advertisements need to be revaluated in order to become relevant and endorse the action of sharing content so that there is a creation of positive purchase tendencies amongst the younger technically savvy generation. References Ahmad, I. 2014. 30 statistics how social media influence purchasing decisions. http://www.socialmediatoday.com/content/30-statistics-how-social-media-influence-purchasing-decisions-infographic [24 July 2014]. Angelova, V. 2013. 7 Reasons why social media is an absolute must for business branding. http://www.likeable.com/blog/2013/09/7-reasons-why-social-media-is-an-absolute-must-for-business-branding/ [23 July 2014]. Gustin, S. 2014. Do Facebook ads work?. http://business.time.com/2012/08/07/do-facebook-ads-work/ [8 August 2014]. Hourihan, P. 2013. Generation Z: The Holy Grail for brands? http://www.marketingmagazine.co.uk/article/1214118/generation-z-holy-grail-brands [7 March 2014]. Lafferty, J. 2014. Study: Facebook ads can be effective at delivering reach. http://www.insidefacebook.com/2014/02/12/study-facebook-ads-can-be-effective-at-delivering-reach/ [7 March 2014]. Mackenzie, R. 2014. Generation Z making buying decisions based on social media influence. http://freedomabilitymarketing.com/generation-y-social-media-influence [26 July 2014]. Musil, S. 2013. Shopping via mobile devices increased 81 percent in 2012. http://www.cnet.com/news/shopping-via-mobile-devices-increased-81-percent-in-2012/ [23 July 2014]. Our Social Times. 2014. 10 Useful social networking statistics for 2014. http://oursocialtimes.com/10-useful-social-networking-statistics-for-2014/ [20 July 2014]. Sedghi, A. 2014. Facebook: 10 years of social networking, in numbers. http://www.theguardian.com/news/datablog/2014/feb/04/facebook-in-numbers-statistics [8 August 2014]. Wagner, K. 2013. Are Facebook ads working? The clicks say yes. http://mashable.com/2013/10/28/facebook-ad-success-q3/ [7 March 2014].
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