Transcript Facebook: An online tool for offline marketing

Facebook: An online tool for
offline marketing
NCTU — Hsinchu, Taiwan
Timothy MacKay
• 1.6% share for $240 million US
– This was what Microsoft paid for a part ownership
of Facebook in the Fall of 2007
– Why?
Network Marketing opportunities
• Marketers were given a golden tool when the
Internet became available to them
• So far, that has been difficult to use efficiently
• Social network sites are the latest opportunity
for marketers because of the interactive
nature of these sites.
• Facebook is an emerging leader in the sector.
A comparison graph of Facebook.com and msn.com. Facebook is now ranked
number 7 most visited site and MSN is ranked number 5.
Consumer purchase behavior
Offline
sources
H1, H2, H3
????
Facebook
(Online or
offline?)
Online
sources
Network
marketing
Trusted
Product or
service
information
Purchase
decision and
possible sale
H4
Not-trusted
product
information
No purchase
decision
necessary and
no sale
Commerce’s need for trust
• Trust is an integral part of commerce.
• Building trust is a difficult task.
• Consumers have a historical problem with
trusting online sources.
Offline vs. Online sources
• The Internet age has been greeted with some
skepticism and unease
– There is no vulnerability on the Internet because
of the ease of entry and the lack of accountability.
(Social Exchange Theory)
• Social networks in the real world are highly
trusted groups
• Offline relationships are keys to gaining
consumers through trust relationships
Social Network Sites and Marketing
• SNS have shown some links to network
marketing.
• It has been shown to work in MySpace by
Boyd Thomas et al.
• Network marketing through SNS has been
driving an increase in sales (Walsh 2006)
• The key to this is having an identified network
Facebook
• Designed by a Harvard student to help friends stay in touch.
• Originally meant to be a service offered to college students
only.
• In 2006, it was opened to the general public and has been
growing rapidly.
• It has recently opened a “platform” allowing programmers
to design services.
• Facebook is at its essence a directory
• Members search for and add names (with faces) to their
directories.
• Members can keep track of their “friends’” social
interactions through the “news feed”.
Research Questions
• Are Facebook members offline friends brought
online by the application feature?
• Is Facebook being used to get new friends or
keep in touch with current friends?
• Are non-students using Facebook for different
reasons than students?
• Are Facebook members trusted enough to use
Network marketing?
Hypotheses
• Facebook is being used more often for people
to keep in touch with old friends than to make
new online friends.
• Facebook is being used by students and nonstudents in a different capacity.
• The relationships that Facebook members
have is a highly trusted relationship.
Methodology
• For this study, the researcher used a survey.
• The first set of statements survey for the first
hypotheses reference the study by Lampe et al and
tested who Facebook users were communicating with.
• The second set of questions referenced Tung et al. and
tested the nature of trust from Facebook members
toward their friends.
• 121 people were sent surveys by Facebook or by email
and 64 responded. 61 surveys were usable.
• T-tests were used to compare the results of the nonstudent group versus the student group
Results
• The surveys showed that people were more likely
to choose current offline friends as Facebook
friends. However, the results were less vigorous
than Lampe et al.
• Although there were differences in the results
from students and non-students, they were
inconclusive.
• The results for the trust-based questions showed
only slight trust in Facebook friends by members.
Conclusions
• The results were not as vigorous as anticipated.
• The researcher considered the possibility of nonsample error especially of misunderstanding of
the survey questions.
• It should be examined as to why the results
differed from the results by Lampe et al.
– Have the reasons for using Facebook changed?
• There isn’t enough evidence to point toward a
clear connection to successful network
marketing.
Future research
• A comparison of Facebook and other SNS is
necessary to find out if there is a difference
between the media.
• The results can be examined along with other
data retrieved by the participants’ Facebook
sites.