How Facebook's Sponsored Ads Influence Customer Sales: A Dissertation
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Thesis and Dissertation
AI Summary
This dissertation investigates the influence of Facebook advertisements on customer sales, focusing on the platform's role in modern marketing strategies. The study explores the advantages of Facebook advertising, including its ability to target large audiences with geographical and time flexibility, while also addressing the challenges such as targeting the wrong audience, high cost per conversation, and declining ad revenue. Utilizing a positivism philosophy, descriptive design, and a deductive approach, the research employs a survey research strategy with probability sampling to collect primary data from 50 participants, analyzed using quantitative techniques. The findings highlight the increasing use of Facebook sponsored ads by businesses to boost customer sales. The research covers emergence of social media platforms, factors affecting increased Facebook use among businesses for advertisements, benefits of using Facebook advertising, Facebook ads that drive sales, concept of Facebook sponsored ads and its role in improving sales, challenges of using Facebook sponsored advertising, and need of increased customer sales for businesses.
Running head: DISSERTATION
How Facebook’s sponsored advertisements influence customer sales
Name of the Student:
Name of the University:
Author’s Note:
How Facebook’s sponsored advertisements influence customer sales
Name of the Student:
Name of the University:
Author’s Note:
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1DISSERTATION
Acknowledgement
Thank you to all of those who have helped listened and encouraged me throughout this study. I
am indebted to my supervisor ……………………. whose guidance, advice and patience have
been immeasurable. My sincere thanks to all members of the…………… [Mention your
university/college name], both staff and students, whose continuous support have made this
thesis possible.
I would like to thank all of the participants in the study: students, teachers and Local Education
Authorities, for the time and help given throughout. Without their participation, this research
would not have been possible. In this context, I am also thankful to them, whose research work
helped me to execute this paper well.
Finally, I thank my family, without whom this thesis would not have been started or completed!
Your encouragement and support have never faltered; thank you.
Acknowledgement
Thank you to all of those who have helped listened and encouraged me throughout this study. I
am indebted to my supervisor ……………………. whose guidance, advice and patience have
been immeasurable. My sincere thanks to all members of the…………… [Mention your
university/college name], both staff and students, whose continuous support have made this
thesis possible.
I would like to thank all of the participants in the study: students, teachers and Local Education
Authorities, for the time and help given throughout. Without their participation, this research
would not have been possible. In this context, I am also thankful to them, whose research work
helped me to execute this paper well.
Finally, I thank my family, without whom this thesis would not have been started or completed!
Your encouragement and support have never faltered; thank you.
2DISSERTATION
Abstract
The aim of the research is to perform an analysis of the influence of Facebook advertisements in
customer sales. The fierce and intense competition among the business organizations have made
it necessary for the firms or the companies to come up with new ideas for being the favorite one
for the customers. Advertisement is one of the methods that business organizations use for
gaining the attention of the target customers. Facebook have become a recent favorite among the
business organizations as an advertisement platform because of the various advantages it has to
offer. Business organizations can target large audiences with any geographical constraint as well
as time constraint. Facebook offered effortless and efficient communication and connection of
the users to individuals across the globe freely. However, in spite of the benefits, the vastness of
Facebook is often challenging for the users and the business organizations using it for
advertisement and increasing sales are not spared. Problems or challenges include targeting the
wrong audiences, high cost per conversation and the social media platform is running out of
space to put their advertisements.
Positivism philosophy, descriptive design, deductive approach, survey research strategy has been
used. Additionally, probability sampling technique has been used for selecting 50 participants
whose opinion can be helpful for analyzing the influence of Facebook sponsored advertisements
in customer sales. The primary data collected from 50 participants is analyzed using quantitative
analysis technique using descriptive statistics. According to the suitability, pie charts and bar
graphs are used to interpret the opinion of 50 participants.
From the data analysis and interpretations, it can be summarized that Facebook sponsored ads
has become a recent favorite for the business organizations and are highly used for increasing
Abstract
The aim of the research is to perform an analysis of the influence of Facebook advertisements in
customer sales. The fierce and intense competition among the business organizations have made
it necessary for the firms or the companies to come up with new ideas for being the favorite one
for the customers. Advertisement is one of the methods that business organizations use for
gaining the attention of the target customers. Facebook have become a recent favorite among the
business organizations as an advertisement platform because of the various advantages it has to
offer. Business organizations can target large audiences with any geographical constraint as well
as time constraint. Facebook offered effortless and efficient communication and connection of
the users to individuals across the globe freely. However, in spite of the benefits, the vastness of
Facebook is often challenging for the users and the business organizations using it for
advertisement and increasing sales are not spared. Problems or challenges include targeting the
wrong audiences, high cost per conversation and the social media platform is running out of
space to put their advertisements.
Positivism philosophy, descriptive design, deductive approach, survey research strategy has been
used. Additionally, probability sampling technique has been used for selecting 50 participants
whose opinion can be helpful for analyzing the influence of Facebook sponsored advertisements
in customer sales. The primary data collected from 50 participants is analyzed using quantitative
analysis technique using descriptive statistics. According to the suitability, pie charts and bar
graphs are used to interpret the opinion of 50 participants.
From the data analysis and interpretations, it can be summarized that Facebook sponsored ads
has become a recent favorite for the business organizations and are highly used for increasing
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3DISSERTATION
customer sales. From the descriptive analysis, it can be implied that the participants who took
part in the survey had adequate knowledge about the effective use of Facebook in increasing
customer sales. However, arguments are there that presents a different set of opinion about the
effectiveness of Facebook sponsored ads in increasing customer sales. The analysis and the
information provided from the past researches have highlighted instances where the effectiveness
of Facebook sponsored ads are questioned because of challenges such as straightforwardness of
the ads, tracking profile being time consuming and target incorrect target audiences. In spite of
the criticism the role of Facebook sponsored ads in increasing sales can be established and
highlighted in the data analysis, interpretations and past researches.
customer sales. From the descriptive analysis, it can be implied that the participants who took
part in the survey had adequate knowledge about the effective use of Facebook in increasing
customer sales. However, arguments are there that presents a different set of opinion about the
effectiveness of Facebook sponsored ads in increasing customer sales. The analysis and the
information provided from the past researches have highlighted instances where the effectiveness
of Facebook sponsored ads are questioned because of challenges such as straightforwardness of
the ads, tracking profile being time consuming and target incorrect target audiences. In spite of
the criticism the role of Facebook sponsored ads in increasing sales can be established and
highlighted in the data analysis, interpretations and past researches.
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4DISSERTATION
Table of Contents
Chapter 1: Introduction....................................................................................................................9
1.0 Overview................................................................................................................................9
1.1 Problem statement...............................................................................................................10
1.2 Research aim........................................................................................................................10
1.3 Research objectives.............................................................................................................11
1.4 Research questions...............................................................................................................11
1.5 Research rationale................................................................................................................12
1.6 Structure of the dissertation.................................................................................................13
1.7 Summary..............................................................................................................................14
Chapter 2: Literature review......................................................................................................15
2.0 Overview..............................................................................................................................15
2.1 Conceptual framework.........................................................................................................15
2.2 Emergence of social media platforms..................................................................................16
2.3 Different types of social media platforms...........................................................................18
2.4 History of Facebook............................................................................................................21
2.5 Factors affecting increased Facebook use among businesses for advertisements...............23
2.6 Benefits of using Facebook advertising...............................................................................27
2.7 Facebook ads that drive sales..............................................................................................30
Table of Contents
Chapter 1: Introduction....................................................................................................................9
1.0 Overview................................................................................................................................9
1.1 Problem statement...............................................................................................................10
1.2 Research aim........................................................................................................................10
1.3 Research objectives.............................................................................................................11
1.4 Research questions...............................................................................................................11
1.5 Research rationale................................................................................................................12
1.6 Structure of the dissertation.................................................................................................13
1.7 Summary..............................................................................................................................14
Chapter 2: Literature review......................................................................................................15
2.0 Overview..............................................................................................................................15
2.1 Conceptual framework.........................................................................................................15
2.2 Emergence of social media platforms..................................................................................16
2.3 Different types of social media platforms...........................................................................18
2.4 History of Facebook............................................................................................................21
2.5 Factors affecting increased Facebook use among businesses for advertisements...............23
2.6 Benefits of using Facebook advertising...............................................................................27
2.7 Facebook ads that drive sales..............................................................................................30
5DISSERTATION
2.8 Concept of Facebook sponsored ads and its role in improving sales..................................33
2.9 Challenges of using Facebook sponsored advertising.........................................................35
2.10 Concept of sales.................................................................................................................38
2.11 Need of increased customer sales for businesses..............................................................39
2.12 Advantages of increased customer sales by advertisements..............................................40
2.13 Research gap......................................................................................................................43
2.14 Summary............................................................................................................................43
Chapter 3: Research methodology.................................................................................................45
3.0 Overview..............................................................................................................................45
3.1 Research outline...................................................................................................................45
3.2 Research onion.....................................................................................................................45
3.3 Philosophies of research......................................................................................................47
3.3.1 Validation for preferring positivism philosophy..........................................................47
3.4 Approaches of research........................................................................................................48
3.4.1 Validation for preferring deductive approach...............................................................48
3.5 Designs of research..............................................................................................................49
3.5.1 Validation for preferring descriptive design.................................................................49
3.6 Strategies of research...........................................................................................................50
3.6.1 Validation for preferring survey research strategy.......................................................50
3.7 Sampling techniques of research.........................................................................................51
2.8 Concept of Facebook sponsored ads and its role in improving sales..................................33
2.9 Challenges of using Facebook sponsored advertising.........................................................35
2.10 Concept of sales.................................................................................................................38
2.11 Need of increased customer sales for businesses..............................................................39
2.12 Advantages of increased customer sales by advertisements..............................................40
2.13 Research gap......................................................................................................................43
2.14 Summary............................................................................................................................43
Chapter 3: Research methodology.................................................................................................45
3.0 Overview..............................................................................................................................45
3.1 Research outline...................................................................................................................45
3.2 Research onion.....................................................................................................................45
3.3 Philosophies of research......................................................................................................47
3.3.1 Validation for preferring positivism philosophy..........................................................47
3.4 Approaches of research........................................................................................................48
3.4.1 Validation for preferring deductive approach...............................................................48
3.5 Designs of research..............................................................................................................49
3.5.1 Validation for preferring descriptive design.................................................................49
3.6 Strategies of research...........................................................................................................50
3.6.1 Validation for preferring survey research strategy.......................................................50
3.7 Sampling techniques of research.........................................................................................51
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3.7.1 Validation for preferring random probability sampling technique...............................51
3.8 Data collection processes of research..................................................................................52
3.8.1 Validation for preferring primary data collection process............................................52
3.9 Data analysis techniques of research...................................................................................53
3.9.1 Validation for preferring quantitative data analysis technique.....................................53
3.10 Accessibility issues............................................................................................................53
3.11 Ethical considerations........................................................................................................54
3.12 Summary............................................................................................................................54
Chapter 4: Findings and interpretation..........................................................................................56
4.0 Overview..............................................................................................................................56
4.1 Data analysis........................................................................................................................56
4.2 Summary..............................................................................................................................68
Chapter 5: Discussions..................................................................................................................70
Chapter 6: Conclusion and recommendations...............................................................................75
6.0 Conclusion...........................................................................................................................75
6.1 Linking with objectives.......................................................................................................76
6.2 Recommendations................................................................................................................79
6.3 Future scope of the study.....................................................................................................81
References......................................................................................................................................82
Appendix 1.....................................................................................................................................93
3.7.1 Validation for preferring random probability sampling technique...............................51
3.8 Data collection processes of research..................................................................................52
3.8.1 Validation for preferring primary data collection process............................................52
3.9 Data analysis techniques of research...................................................................................53
3.9.1 Validation for preferring quantitative data analysis technique.....................................53
3.10 Accessibility issues............................................................................................................53
3.11 Ethical considerations........................................................................................................54
3.12 Summary............................................................................................................................54
Chapter 4: Findings and interpretation..........................................................................................56
4.0 Overview..............................................................................................................................56
4.1 Data analysis........................................................................................................................56
4.2 Summary..............................................................................................................................68
Chapter 5: Discussions..................................................................................................................70
Chapter 6: Conclusion and recommendations...............................................................................75
6.0 Conclusion...........................................................................................................................75
6.1 Linking with objectives.......................................................................................................76
6.2 Recommendations................................................................................................................79
6.3 Future scope of the study.....................................................................................................81
References......................................................................................................................................82
Appendix 1.....................................................................................................................................93
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7DISSERTATION
Survey Questionnaire.................................................................................................................93
List of Figures
Figure 1: Conceptual framework...................................................................................................16
Figure 2: Number of social media users globally from 2010 – 2019............................................17
Figure 3: World population on social media.................................................................................18
Figure 4: Monthly users of Facebook............................................................................................23
Figure 5: Facebook’s annual revenue............................................................................................24
Figure 6: Cost per click by Facebook advertisements...................................................................25
Figure 7: Different Ad Objectives in Facebook............................................................................26
Figure 8: Facebook active user profile..........................................................................................28
Figure 9: Facebook advertising increasing revenue......................................................................29
Figure 10: Example Facebook ad..................................................................................................31
Figure 11: Social media customer reach........................................................................................34
Figure 12: Social media content....................................................................................................36
Figure 13: Advertising figures.......................................................................................................41
Figure 14: Post impressions...........................................................................................................42
Figure 15: Research onion.............................................................................................................46
Figure 16: Demographics analysis.................................................................................................57
Figure 17: Considering the use of Facebook sponsored ads in the past decade............................58
Figure 18: Preference of Facebook sponsored ads over other forms of digital ads.......................59
Figure 19: Preference of Facebook sponsored ads over other social media platforms.................60
Figure 20: Primary reason of selecting Facebook for ads.............................................................60
Survey Questionnaire.................................................................................................................93
List of Figures
Figure 1: Conceptual framework...................................................................................................16
Figure 2: Number of social media users globally from 2010 – 2019............................................17
Figure 3: World population on social media.................................................................................18
Figure 4: Monthly users of Facebook............................................................................................23
Figure 5: Facebook’s annual revenue............................................................................................24
Figure 6: Cost per click by Facebook advertisements...................................................................25
Figure 7: Different Ad Objectives in Facebook............................................................................26
Figure 8: Facebook active user profile..........................................................................................28
Figure 9: Facebook advertising increasing revenue......................................................................29
Figure 10: Example Facebook ad..................................................................................................31
Figure 11: Social media customer reach........................................................................................34
Figure 12: Social media content....................................................................................................36
Figure 13: Advertising figures.......................................................................................................41
Figure 14: Post impressions...........................................................................................................42
Figure 15: Research onion.............................................................................................................46
Figure 16: Demographics analysis.................................................................................................57
Figure 17: Considering the use of Facebook sponsored ads in the past decade............................58
Figure 18: Preference of Facebook sponsored ads over other forms of digital ads.......................59
Figure 19: Preference of Facebook sponsored ads over other social media platforms.................60
Figure 20: Primary reason of selecting Facebook for ads.............................................................60
8DISSERTATION
Figure 21: Benefits of Facebook ads in customer sales maximization..........................................61
Figure 22: Capacity of Facebook sponsored ads in increasing customer sales.............................62
Figure 23: Type of Facebook sponsored ad preferred...................................................................62
Figure 24: Effectiveness of Facebook carousel ads.......................................................................63
Figure 25: Effectiveness of Facebook slideshow ad......................................................................64
Figure 26: Effectiveness of Facebook video ad.............................................................................64
Figure 27: Role of Facebook sponsored ads in increasing sales...................................................65
Figure 28: Challenges in using Facebook sponsored ads..............................................................66
Figure 29: Types of Facebook sponsored ads challenges..............................................................66
Figure 30: Benefits of increased sales for business.......................................................................67
Figure 21: Benefits of Facebook ads in customer sales maximization..........................................61
Figure 22: Capacity of Facebook sponsored ads in increasing customer sales.............................62
Figure 23: Type of Facebook sponsored ad preferred...................................................................62
Figure 24: Effectiveness of Facebook carousel ads.......................................................................63
Figure 25: Effectiveness of Facebook slideshow ad......................................................................64
Figure 26: Effectiveness of Facebook video ad.............................................................................64
Figure 27: Role of Facebook sponsored ads in increasing sales...................................................65
Figure 28: Challenges in using Facebook sponsored ads..............................................................66
Figure 29: Types of Facebook sponsored ads challenges..............................................................66
Figure 30: Benefits of increased sales for business.......................................................................67
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Chapter 1: Introduction
1.0 Overview
Industries and sectors have become highly competitive because of the increase number of
similar business organizations offering more or less relevant products and services. Hence,
expanding business, increasing customer base and being the favorite one among the customers is
difficult and challenging. As commented by Dehghani and Tumer (2015), the fierce and intense
competition among the business organizations have made it necessary for the firms or the
companies to come up with new ideas for being the favorite one for the customers.
Advertisement is one of the methods that business organizations use for gaining the attention of
the target customers. However, traditional forms of advertisement are slowly fading out due to
the lack of flexibility that is needed for today’s organization (Celebi 2015).
The modern age is gripped by the latest technological advancements and is used in daily
life by individual for varied purposes. One such significant technological advancement is the rise
of social media that 2.62 billion users active users globally (Tucker 2014). The different social
media platforms are widely used by the users for different purposes such as communication,
shopping, following communities, supporting causes and raising voices. The business
organizations have used this opportunity in their favor and have started using social media
platforms for advertisements and increasing sales. One of the most prominent social media
platforms that have gained popularity and recognition over the years is Facebook and has an
estimated 2 million users (Lee, Hosanagar and Nair 2018).
Facebook have become a recent favorite among the business organizations as an
advertisement platform because of the various advantages it has to offer. Business organizations
Chapter 1: Introduction
1.0 Overview
Industries and sectors have become highly competitive because of the increase number of
similar business organizations offering more or less relevant products and services. Hence,
expanding business, increasing customer base and being the favorite one among the customers is
difficult and challenging. As commented by Dehghani and Tumer (2015), the fierce and intense
competition among the business organizations have made it necessary for the firms or the
companies to come up with new ideas for being the favorite one for the customers.
Advertisement is one of the methods that business organizations use for gaining the attention of
the target customers. However, traditional forms of advertisement are slowly fading out due to
the lack of flexibility that is needed for today’s organization (Celebi 2015).
The modern age is gripped by the latest technological advancements and is used in daily
life by individual for varied purposes. One such significant technological advancement is the rise
of social media that 2.62 billion users active users globally (Tucker 2014). The different social
media platforms are widely used by the users for different purposes such as communication,
shopping, following communities, supporting causes and raising voices. The business
organizations have used this opportunity in their favor and have started using social media
platforms for advertisements and increasing sales. One of the most prominent social media
platforms that have gained popularity and recognition over the years is Facebook and has an
estimated 2 million users (Lee, Hosanagar and Nair 2018).
Facebook have become a recent favorite among the business organizations as an
advertisement platform because of the various advantages it has to offer. Business organizations
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10DISSERTATION
can target large audiences with any geographical constraint as well as time constraint. Facebook
offered effortless and efficient communication and connection of the users to individuals across
the globe freely. The users were able to share photos, videos and messages and follow
individuals, groups, communities and brands without being physically present at the place of
origin (Ramo et al. 2014).
1.1 Problem statement
The vastness of Facebook is often challenging for the users and the business
organizations using it for advertisement and increasing sales are not spared. While using
Facebook advertisement wrong audiences are targeted that decreases the sales instead of
increasing the sales. Targeting audiences lacks sharpness because each Facebook advertisement
is having more than 50,000 individuals that are way too broad thereby, resulting in high cost per
conversation (Kosinski et al. 2015). Issues such as declining ad revenue, ad metrics and
ineffective customer service is emerging as inevitable challenge for the business organizations
thereby, affecting the maximization of sales negatively. Ad revenue for Facebook is declining
because the social media platform is running out of space to put their advertisements.
Additionally, the ad managers handling Facebook advertisements are failing to offer adequate
help. Lack of direct help line for calling and no representatives for assistance is creating
challenges for Facebook advertisements in increasing customer sales (Gittelman et al. 2015).
1.2 Research aim
The aim of the research is to perform an analysis of the influence of Facebook
advertisements in customer sales. With the use of Facebook across the world, it can be known
that it is one of the most popular social media platforms among the mass. Apart from individual
use, Facebook is highly used and preferred by the business entities due to the various advantages
can target large audiences with any geographical constraint as well as time constraint. Facebook
offered effortless and efficient communication and connection of the users to individuals across
the globe freely. The users were able to share photos, videos and messages and follow
individuals, groups, communities and brands without being physically present at the place of
origin (Ramo et al. 2014).
1.1 Problem statement
The vastness of Facebook is often challenging for the users and the business
organizations using it for advertisement and increasing sales are not spared. While using
Facebook advertisement wrong audiences are targeted that decreases the sales instead of
increasing the sales. Targeting audiences lacks sharpness because each Facebook advertisement
is having more than 50,000 individuals that are way too broad thereby, resulting in high cost per
conversation (Kosinski et al. 2015). Issues such as declining ad revenue, ad metrics and
ineffective customer service is emerging as inevitable challenge for the business organizations
thereby, affecting the maximization of sales negatively. Ad revenue for Facebook is declining
because the social media platform is running out of space to put their advertisements.
Additionally, the ad managers handling Facebook advertisements are failing to offer adequate
help. Lack of direct help line for calling and no representatives for assistance is creating
challenges for Facebook advertisements in increasing customer sales (Gittelman et al. 2015).
1.2 Research aim
The aim of the research is to perform an analysis of the influence of Facebook
advertisements in customer sales. With the use of Facebook across the world, it can be known
that it is one of the most popular social media platforms among the mass. Apart from individual
use, Facebook is highly used and preferred by the business entities due to the various advantages
11DISSERTATION
the platform has in store to offer to the users. The business entities are using Facebook for
promoting their products and services thereby, maximizing the sales. Advertising using
Facebook allows reaching the ads to every corner of the world and across all age groups.
1.3 Research objectives
The objectives of the research are:
Creation and performance of online questionnaires in order to evaluate the customers’
positive and negative reaction to the sponsored advertisements in Facebook.
To determine the effectiveness and success of the Facebook’s sponsored advertisements.
Statistical study with the questionnaires results to perform a study how the
advertisements influence the costumer sales
To understand the emergence and use of Facebook
To critically analyze the factors affecting the use of Facebook among business for
advertisements
To investigate the benefits of using Facebook sponsored advertisements
To study the different types of Facebook ads that improves customer sales
To determine the role of Facebook sponsored ads in increasing customer sales
To find ways of improving customers sales by using sponsored Facebook ads effectively
1.4 Research questions
The questions of the research are:
What is the emergence and use of Facebook?
What are the factors affecting the use of Facebook among business for advertisements?
What re the benefits of using Facebook sponsored advertisements?
the platform has in store to offer to the users. The business entities are using Facebook for
promoting their products and services thereby, maximizing the sales. Advertising using
Facebook allows reaching the ads to every corner of the world and across all age groups.
1.3 Research objectives
The objectives of the research are:
Creation and performance of online questionnaires in order to evaluate the customers’
positive and negative reaction to the sponsored advertisements in Facebook.
To determine the effectiveness and success of the Facebook’s sponsored advertisements.
Statistical study with the questionnaires results to perform a study how the
advertisements influence the costumer sales
To understand the emergence and use of Facebook
To critically analyze the factors affecting the use of Facebook among business for
advertisements
To investigate the benefits of using Facebook sponsored advertisements
To study the different types of Facebook ads that improves customer sales
To determine the role of Facebook sponsored ads in increasing customer sales
To find ways of improving customers sales by using sponsored Facebook ads effectively
1.4 Research questions
The questions of the research are:
What is the emergence and use of Facebook?
What are the factors affecting the use of Facebook among business for advertisements?
What re the benefits of using Facebook sponsored advertisements?
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