IT and Web 2.0 advancements have generated new opportunities and tools for companies to reach customers and prospects with their communicat...
IT and Web 2.0 advancements have generated new opportunities and tools for companies to reach customers and prospects with their communication and in particular with personalized promotional messages. Emails, newsletters, search engines and social media are the most considered ways to develop online advertising.
The major change respect to traditional communication channels is the possibility for companies to target their ads to a specific audience so that people on the web will display personalized promotional messages according to their preferences. This method was implemented by search engines (e.g., Yahoo, Google). For example, a traveler who is searching online for a hotel on main search engines by means of keywords like “hotels in New York” will then find New York hotels promotions in other websites and making other researches. Recent statistics confirm the propensity of online users to pay attention to these personalized ads in the social media environment, according to their profile information (Nielsen 2012).
Unlike early Internet advertising, that was based on paid flat fees to show ads for a fixed number of times on specific websites, these types of online ads are based on the advertiser willingness to pay on a pay-per-click basis (PPC). The firm submits a bid for a particular keyword and pays according to the number of clicks (every time a consumer clicked on a sponsored link) (Edelman et al. 2005).
The aforementioned benefit to address advertising to specific target markets has generated a shift in advertising expenditures across media types (Tuten 2008). Generally speaking, suppliers particularly small-medium companies are more and more aware of the impact of new technologies on customer purchasing behavior and have adjusted their strategies (Burgess et al. 2014), investing a larger part of their communication budgets in electronic channels, the Internet and mobile technologies (Caroli and Pratesi 2011).
Furthermore, the development of social media increases the opportunity for companies to spread free and paid online ads.Within the online communication budget, free or paid social media marketing is heavily employed by advertisers and agencies also in the light of recent reports on socialmedia in theUSAthat found an increasing propensity to buy products after having seeing social ads (14%ofUS customers purchase a product after having consulted a social ad) (Nielsen 2012). Even iffree socialmedia tools remain obviously very popular, in the last few years the use of paid social media and sponsor content is increasing and the advertising budget dedicated to paid social media is expected to grow in the future (PhocusWright 2012; Nielsen 2013).
The main difference between customized advertising on search engines (like Google) and on social media (like Facebook) is how the audience is selected. Facebook ads allow filtering the audience according to Facebook users’ information and the “Like” behavior, while Google matches ads according to the keywords the web user enter in the google bar. In both cases, advertisers have no control on who is going to see their ad and will pay on a PPC basis.
The opportunity to target advertising on social media, if integrated with other online and offline communication, can offer interesting advantages for companies (Mangold and Faulds 2009). Recent statistics (Nielsen 2013) show that advertisers start considering increasingly social media campaign as integrated communication instruments. The problem remains how to measure the effectiveness of these campaigns. Hardly, we find a coincidence between what companies/advertisers expect and what metrics publisher can really provide that leads to an unsure perception of paid social media advertising’s effectiveness. Social media are working in order to overcome this problem. For example, recently Facebook has upgraded its advertising metrics (Ads Manager), improving the consistency between ad options and reporting. Companies can now monitor how many times their objective was achieved, as well as the cost per objective. These new functions permit to better retarget advertising expenses in order to understand how to allocate ads for better return on investments (ROI).
The major change respect to traditional communication channels is the possibility for companies to target their ads to a specific audience so that people on the web will display personalized promotional messages according to their preferences. This method was implemented by search engines (e.g., Yahoo, Google). For example, a traveler who is searching online for a hotel on main search engines by means of keywords like “hotels in New York” will then find New York hotels promotions in other websites and making other researches. Recent statistics confirm the propensity of online users to pay attention to these personalized ads in the social media environment, according to their profile information (Nielsen 2012).
Unlike early Internet advertising, that was based on paid flat fees to show ads for a fixed number of times on specific websites, these types of online ads are based on the advertiser willingness to pay on a pay-per-click basis (PPC). The firm submits a bid for a particular keyword and pays according to the number of clicks (every time a consumer clicked on a sponsored link) (Edelman et al. 2005).
The aforementioned benefit to address advertising to specific target markets has generated a shift in advertising expenditures across media types (Tuten 2008). Generally speaking, suppliers particularly small-medium companies are more and more aware of the impact of new technologies on customer purchasing behavior and have adjusted their strategies (Burgess et al. 2014), investing a larger part of their communication budgets in electronic channels, the Internet and mobile technologies (Caroli and Pratesi 2011).
Furthermore, the development of social media increases the opportunity for companies to spread free and paid online ads.Within the online communication budget, free or paid social media marketing is heavily employed by advertisers and agencies also in the light of recent reports on socialmedia in theUSAthat found an increasing propensity to buy products after having seeing social ads (14%ofUS customers purchase a product after having consulted a social ad) (Nielsen 2012). Even iffree socialmedia tools remain obviously very popular, in the last few years the use of paid social media and sponsor content is increasing and the advertising budget dedicated to paid social media is expected to grow in the future (PhocusWright 2012; Nielsen 2013).
The main difference between customized advertising on search engines (like Google) and on social media (like Facebook) is how the audience is selected. Facebook ads allow filtering the audience according to Facebook users’ information and the “Like” behavior, while Google matches ads according to the keywords the web user enter in the google bar. In both cases, advertisers have no control on who is going to see their ad and will pay on a PPC basis.
The opportunity to target advertising on social media, if integrated with other online and offline communication, can offer interesting advantages for companies (Mangold and Faulds 2009). Recent statistics (Nielsen 2013) show that advertisers start considering increasingly social media campaign as integrated communication instruments. The problem remains how to measure the effectiveness of these campaigns. Hardly, we find a coincidence between what companies/advertisers expect and what metrics publisher can really provide that leads to an unsure perception of paid social media advertising’s effectiveness. Social media are working in order to overcome this problem. For example, recently Facebook has upgraded its advertising metrics (Ads Manager), improving the consistency between ad options and reporting. Companies can now monitor how many times their objective was achieved, as well as the cost per objective. These new functions permit to better retarget advertising expenses in order to understand how to allocate ads for better return on investments (ROI).
A Focus on Facebook Advertising Tools
As Facebook is the most used social media by customers and firms, we believe it is useful to briefly go through the opportunities offered by this social network to develop online advertising. Facebook advertising is on payment and allows the company to reach all the Facebook users filtering the most appropriate audience. Moreover, it can generate free additional word-of-mouth, thanks to the “like” and “share” options. However, we can consider “free advertising” the action of the company to publish a post that contains promotional content (offers, events, etc.) directed to people that “like” the company’s page. In this case, firms cannot select the audience that is limited to the network. On the contrary, paid advertising can reach a larger audience of customers and prospects going beyond the boundaries of the company’s network. Therefore, the spread of free posts is less extensive than paid ads even if it can be amplified by networks friends’ word-of-mouth.
Facebook paid advertising tools offered to firms (with a corporate page) are: offers, sponsored stories, and ads (Prunesti 2013).
Offers are specific posts that allow companies to promote the product or specific events selecting a specific audience. For example, a hotel can promote on Facebook a special rate for the low season and allows people to redeem the offer by means of a coupon.
Sponsored stories are promotional messages that will appear on the news feed of fans’ friends on the basis of their activities. Namely, friends of people who are engaged with the corporate page (i.e., like a post or share content) will see sponsored stories mixed with other friends posts in the news feed.
The third type of Facebook advertising tool is represented by ads campaign. In March 2014, a new structure was launched based on three levels rather than the previous two (Facebook, May 2014). They are the campaign, ad set, and ads:
• Campaign: each campaign has a specific advertising objective that will consist of one or more ad sets. Companies can choose among various objectives:
– Clicks to Website: make people to visit the website;
– Website Conversions: promote specific conversions for the website;
– Page Post Engagement: promote the page posts;
– Page Likes: increase page likes (popularity);
– App Installs: lead people to install the mobile or desktop app;
– App Engagement: make people use the desktop app;
– Offer Claims: create offers for people to redeem in your store (by means of coupons);
– Event Responses: increase the participation to an event.
– Clicks to Website: make people to visit the website;
– Website Conversions: promote specific conversions for the website;
– Page Post Engagement: promote the page posts;
– Page Likes: increase page likes (popularity);
– App Installs: lead people to install the mobile or desktop app;
– App Engagement: make people use the desktop app;
– Offer Claims: create offers for people to redeem in your store (by means of coupons);
– Event Responses: increase the participation to an event.
• Ad Set: this level allows companies defining one or more specific audience according to Facebook profile information: location, basic demographics (age, gender, language), advanced demographics (birthday, relationships, education, work), interests (favorite music, movies, etc.), broad categories (e.g., parents) and connections (e.g., people who like the company’s page). An audience meter shows the potential reach when filtering the target information. Advertisers can then direct more than one ad to each ad set. This new level offers the opportunity to monitor how much has been spent for each segment and to measure the results of a coordinated campaign composed by more than one ad toward
specific target markets for each campaign.
specific target markets for each campaign.
• Ads: company’s promotional messages targeted to a specific ad set. On the basis of the goal and the type of product, personal information is filtered to reach the selected audience. Ads are generally composed by a title, an image and/or video, a body copy, and the “like” option. The ad can be displayed in the right sidebar of the Facebook homepage in the sponsored area or in the news feeds.
The continuous upgrading of advertising monitoring opportunities offered by Facebook is affecting travel companies, that are increasingly investing part of their communication budgets in social media and mobile technologies (PhocusWright 2012).
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