MBA VII. Master of Business Administration Program MAASTRICHT SCHOOL OF MANAGEMENT

Transcription

1 MBA VII Master of Business Administration Program MAASTRICHT SCHOOL OF MANAGEMENT Consumers Perception and Attitude toward Advertising on Social Network Sites By: Annastasia Samiran SURINAME 2013 Supervised by: Dr. Silvio V. De Bono This paper was submitted in partial fulfillment of the requirements for the Master of Business Administration (MBA) degree at the Maastricht School of Management (MSM), Maastricht, the Netherlands, June 2013.

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3 DEDICATION This thesis is dedicated to my little prince, Dylan Anjulio Wolf, who was conceived and born during my MBA journey. He inspired me all the way till the end. ii

4 ACKNOWLEDGEMENTS The accomplishment of the MBA program was one of many great experiences and challenges in my life. I have learned to never give up on what I believe and what I want to achieve in life. First and foremost I thank the Lord for giving me strength and wisdom during my MBA journey. My sincerest gratitude goes to my supervisor, Dr. Silvio De Bono, who expressed his valuable patience in guiding me through my thesis. I want to thank the FHR Lim A Po Institute, especially Mr. Hans Lim A Po for giving me the opportunity to attend the MBA course and for his words of wisdom. I also want to thank the MBA- 7 group for all the support, especially during my pregnancy. My special thanks go to Wantley Sardjo and Robert Samiran for the valuable motivation during every course of the MBA program and Salsie Ranoe Mangal-Jhari for her support during my survey. Finally, I want to thank my partner in life and love; Anjulio Wolf, who has always supported me in anything I want to achieve in my life. I surely owe my gratitude to my in-laws for supporting me through the whole MBA program and for looking after my little prince when I was busy studying. Thank you, Annastasia M. Samiran June 1 st, 2013 i

5 ABSTRACT In today life online social networking is almost impossible to ignore, hence it has become a part of people s daily life. Advertisers, marketers and companies have therefore grasped the opportunity of this habit and incorporate SNSs into their marketing decision making. The approach of adopting SNSs is to enhance the value of advertising in terms of brand awareness, profit and return on investment. But on the other hand, the effect of advertising depends on the users perception and attitude toward advertising because it would not make any sense for advertisers to put effort in SNSs without knowing the impact on users perception and attitude. Yet, studies on online advertising, especially on SNA, and how it is perceived by its users are relatively limited. The aim of this study is to examine a few online factors that possibly have an influence on users perception and attitude toward online Social Network Advertising (SNA), using Facebook as an example. The research model of this study is based on an existing model developed by Yaakop et al. (2012) and consists of four factors, namely perceived interactivity, advertising avoidance, credibility and privacy, to measure the perception and attitude toward Facebook advertising. This model is tested in the Surinamese environment by subjecting the gathered data to a Principle Component Analysis (PCA). The outcome of this test has regrouped the variables with regard to the aforementioned factors and has extracted a new factor, informativeness. During the PCA process, one factor and a few variables were dropped, which led to drop one hypothesis. Therefore designing a revised research model was needed, which includes the new factor and excludes the dropped factor. The dropped factor is advertising avoidance and is therefore not included for further analysis. The results show that perceived interactivity and informativeness are factors that significantly influence users perception and attitude toward advertising on Facebook. Surprisingly, credibility and privacy have no influence on perception and attitude toward advertising on Facebook. This research study provides some insights to companies, marketers and advertisers into online factors that may draw current and potential consumers positive attitude toward advertising on SNSs, in particular Facebook. Key words: SNS, SNA, perceived interactivity, advertising avoidance, credibility, privacy, perception toward SNA, attitude toward SNA. ii

6 ABBREVIATIONS Ad ATOA CA PC(s) PCA PCR Q1 SNA SNS(s) SPSS Advertisement Attitude toward Online Advertising Cronbach s Alpha Principal Component(s) Principal Component Analysis Principal Component Regression First Quarter Social Network Advertising Social Network Site(s) Statistical Package for Social Sciences iii

7 LIST OF TABLES Table 1: Top 5 Most Popular Social Network Sites Worldwide... 2 Table 2: Overview of the research questions and hypotheses... 7 Table 3: Comparison of researches on Perceptions toward Online Advertising Table 4: Comparison of attitude toward Online Advertising Table 5: Questionnaire Table Table 6: The Five-point Likert Scale Statements Table 7: Interval Scale Table 8: Survey Response Rate Table 9: Frequency of respondents' profile Table 10: Frequencies of Perceived Interactivity Table 11: Frequencies of Advertising Avoidance Table 12: Frequencies of Credibility Table 13: Frequencies of Privacy Table 14: Frequencies of Attitude toward Advertising on Facebook Table 15: Cronbach's Alpha Values Table 16: Factors after Principal Component Analysis Table 17: Overview of the Hypotheses Analysis Table 18: Regression Analysis Table 19: Elements in the Regression Equation of the Revised Research Model Table 20: Factors and Variables before and after PCA Table 21: Overview Hypotheses Tests Table 22: Comparison of results between previous studies and current study in Suriname Table 23: Comparison of the multi regression results iv

8 LIST OF FIGURES Figure 1: Facebook growth in the world between Q and Q Figure 2: Facebook users in the world by regions September Figure 3: An overview of Facebook Users in Suriname... 5 Figure 4: Conceptual model... 8 Figure 5: Outline of chapter Figure 6: Valid response rate by gender and per faculty Figure 7: Revised research model v

9 CONTENTS... i ACKNOWLEDGEMENTS... i ABSTRACT... ii ABBREVIATIONS... iii LIST OF TABLES... iv LIST OF FIGURES... v 1 INTRODUCTION General Problem definition and research questions Conceptual Framework Justification of the Research Research approach and methods Scope and Limitation Chapter overview LITERATURE REVIEW Introduction Advertising in Social Network Sites (SNS) Consumers perception toward Social Network Advertising (SNA) The relationship between users perception and attitude toward SNA University students and their perception and attitude toward advertising Summary METHODOLOGY Introduction Research Strategy and Design Sampling Strategy Data analysis Strategy Summary FINDINGS AND ANALYSIS Introduction Survey Response Rate Summary CONCLUSION AND RECOMMENDATION vi

10 5.1 Introduction Discussion on Descriptive Results Discussion on Inferential Results A comparison of previous studies with the current study General Conclusions Managerial Recommendations Limitations and Future Research Recommendation REFERENCES APPENDICES Appendix A Survey Questionnaire Appendix B Codebook Appendix C Population list Appendix D SPSS Data vii

11 1 INTRODUCTION 1.1 General Many studies about consumers attitude toward advertising have been conducted throughout different countries in the world. Understanding consumer s attitude and perception toward advertising is very interesting and most important; especially for advertisers, because attitude toward the ad and the way it is perceived by consumers, determines its success (Mehta, 2000). In the past advertising was limited to traditional media such as TV, Radio, Billboard and magazines (Shavitt, Lowrey, & Haefner, 1998). With the rapid development of information technologies worldwide, advertisers now have many options to promote products and services and engage larger potential consumers easily (Yaakop, Anuar, Omar, & Liung, 2012). Advertising on social networking sites is one of the most suitable promotion techniques in today s business world for aiming at these marketing targets. Facebook as a well-known Social Network Site (SNS) has been growing throughout the world since its launch. However for a small developing country as Suriname, this SNS is just gaining its popularity 1. Figure 1: Facebook growth in the world between Q and Q Source: on April 5, 2013) According to Figure 1 the Global Facebook population grew with roughly 40 million users per quarter, in the period 2011 till This is a relatively huge development in the digital world. Not 1 (retrieved on March 21, 2013) 1

12 only is Facebook constantly growing throughout the world, it is also the world s most popular SNS compared to other SNSs based on the amount of visitors per month. Table 1: Top 5 Most Popular Social Network Sites Worldwide Rank Sites Estimated unique monthly visitors 1 Facebook 750,000,000 2 Twitter 250,000,000 3 LinkedIn 110,000,000 4 Pinterest 85,500,000 5 MySpace 70,500,000 Source: (Retrieved January, ) Figure 2: Facebook users in the world by regions September Source: (retrieved on April 5, 2013). The growth of Facebook is noticeably higher in Europe and Asia, assuming that the population in these regions is relatively large and the technological development is on a high level. The Caribbean on the other hand has a very small percentage of Facebook users, assuming that it is thinly populated and is considered as part of the developing countries. It is therefore possible that these issues contribute to limited internet accessibility. 2

13 Facebook is a type of Social network site (SNS) and is in this study defined as an application that enables users to connect by creating personal information profiles, inviting friends and colleagues to have access to those profiles, and sending s and instant messages between each other (Kaplan & Heanlein, 2010). Boyd & Ellison (2007) characterized SNSs, as online platforms that enable internet users to expand their social network and make it visible to others, which could include friends, family and even strangers. Although there were many studies on attitude toward advertising, only few of them focused on consumer s attitude toward Social Network Advertising (SNA). SNA is a form of online advertising that focuses on SNSs (Sriram, Bbabu, Sivanath, Babu, & Kumar, 2012). Using SNSs to promote a brand or create brand awareness should be planned efficiently (Wigmo & Wikström, 2010). A wrong approach to this new trend of promotion can harm an organization s identity or brand, since SNSs can spread information to millions of users within one second (McLennan & Howell, 2010). Therefore people s perception and attitude should be studied thoroughly when organizations want to aim the positive effectiveness of advertising (Li & Leckeby, 2004). Since this research studies the relationship between users perception and their attitude toward Facebook advertising, it is important to clarify the difference between the terms perception and attitude. Perception is an idea, a belief or an image one has as a result of how one sees or understands something 2, whilst attitude is the way one thinks and feels about the idea, belief or object (Kotler, Armstrong, Wong, & Saunders, 2008). Therefore the way one perceives a situation can influence ones attitude toward the situation. Studies on both attitudes toward advertising in traditional media and attitude toward SNA identified several factors. Some studies have also identified possible factors influencing consumer s perceptions toward online advertising. This study only focuses on four factors, which were identified as factors that influence the consumer s perception of SNA by Kelly (2008) and Hadija (2008). These factors are: perceived interactivity, credibility, advertising avoidance, and privacy. This set of factors had also been conducted by Yaakop et al. (2012) to measure the attitude toward advertising among university students in Malysia. Interactivity is a form of interpersonal communication (Morris & Ogan, 1996). Interpersonal communication in this case involves one on one communications or individuals interacting with 2 Oxford Advanced Learner s Dictionary, 2010 (7 th edition) 3

14 many people within a society 3. An SNS was previously defined as an internet society where people communicate with eachother, hence it characterized the interpersonal communication of SNS. Advertisements or promoting messages on a social network page could reach a large amount of users, because whenever a user receives such a promoting item one can pass it to friends and those friends to their friends. At a glance the advertisement can almost reach the whole world. The extent to which people trust and believe advertisements they receive on their social network page is another issue within advertising attitude (Kelly, 2008). Credibility is a factor that frequently manifested itself in several studies on attitude toward advertisement, because the effectiveness of an advertisement is also based on the extent of consumers credibility towards it. Whenever advertising is intrussive or irritating, people tend to avoid it. Advertising avoidance is an other important factor to take into account; especially when it comes to SNA. Speck & Elliott (1997) described advertising avoidance as all actions by media users that differentially reduce their exposure to ad content. A possible reason why people avoid advertising on SNS is because they think of SNS as a personal space and find it inconvenient as an advertising medium (Kelly, Kerr, & Drennan, 2009). Privacy is a factor that has long been an issue on the internet (Roberts, 2010). It is defined as personal information that an individual deems important and unattainable by the public (Timm & Duven, 2008). A SNS as Facebook contains a certain amount of important users information that organisations can use for marketing purposes. For example, this kind of information provides them the ability to target an advertisement. But wether users find advertisement they receive on their personal Facebook page relevant, is an important issue to discuss about. These four factors, which were observed as factors that influence the perception toward social network advertising, could possibly influence the way people repond to a presented advertisement. These factors are also the focus of this study. 1.2 Problem definition and research questions Advertising on SNSs is a well-known marketing tool for several businesses worldwide. The extent to which SNA has positive effects relies on the way people perceive and respond to such 3 4

15 advertisements. The purpose of using SNSs as a marketing tool is to provide consumers information or updated information about their products or services, share photos and videos, create brand awareness and also meet potential customers (Nekatibebe, 2012). For businesses, marketers and advertisers who use or plan to use SNS to determine market benefit, it is important to understand the way people think and respond to advertising on SNS. Understanding people s perception toward social media advertising will help them to decide whether to put effort into SNS as a marketing tool, or (whether) to invest more in traditional means of advertising. For Suriname, using social network sites is a totally new concept to apply in business. There are about 105,680 Facebook users in Suriname 4. Although Suriname is a developing country with a relatively small population of around 500,000 inhabitants the amount of Facebook users is noticeably high. Therefore taking these issues into account it can safely be said that it is a huge development. According to figure 2, the largest group of people who use Facebook is between the age of 18 and 34, which is about 50% of the total Facebook population. It is presumed that a part of this age group consists of students, who regularly use Facebook. Students, particularly university students, have certain knowledge of using internet because they regularly use it to interact with fellow students and friends. The researcher has therefore decided to focus the study on university students. Figure 3: An overview of Facebook Users in Suriname Source: (retrieved, March 2013) 4 (retrieved on March 21, 2013) 5

16 Although there are Surinamese companies using Facebook as an advertising tool, it is unknown whether this advertising technique is effective or not and how users perception influence the way they respond to such advertising. This was a very interesting subject for the researcher to start a study within this area. Based on the aforementioned factors of perception toward social network advertising and the assumption that Facebook is the most frequently used SNS, the following research question was developed. Research question: The major research question of this study is as follows: How does users perception have an influence on attitude toward advertising on Facebook among University students in Suriname? To answer the research problem the following sub-questions were researched: 1. Does perceived interactivity have an influence on the University students attitude toward advertising on Facebook? 2. Does advertising avoidance have an influence on University students attitude toward advertising on Facebook? 3. Does credibility have an influence on University students attitude toward advertising on Facebook? 4. Does privacy have an influence on University students attitude toward advertising on Facebook? Research objective: The aim of this thesis is to find out to what extent users perception has an influence on attitude toward advertising on Facebook among University students in Suriname. To test the research questions, hypotheses were developed. The assumption to this research is that perceived interactivity, credibility, advertising avoidance, and privacy are related to attitude toward advertising on Facebook and therefore could have a positive or a negative influence. The next table depicts an overview of the developed hypotheses, which was tested to answer the research questions. 6

17 Table 2: Overview of the research questions and hypotheses Research questions Does perceived interactivity have an influence on University students attitude toward advertising on Facebook? Hypotheses H 0 (1): Perceived interactivity does not have an influence on University students attitude toward advertising on Facebook. Does advertising avoidance have an influence on University students attitude toward advertising on Facebook? H 1 (1): Perceived interactivity has an influence on University students attitude toward advertising on Facebook. H 0 (2): Advertising avoidance does not have an influence on University students attitude toward advertising on Facebook. Does credibility have an influence on University students attitude toward advertising on Facebook? H 1 (2): Advertising avoidance has an influence on University students attitude toward advertising on Facebook. H 0 (3): Credibility does not have an influence on University students attitude toward advertising on Facebook. Does privacy have an influence on University students attitude toward advertising on Facebook? H 1 (3): Credibility has an influence on University students attitude toward advertising on Facebook. H 0 (4): Privacy does not have an influence on University students attitude toward advertising on Facebook. H 1 (4): Privacy has an influence on University students attitude toward advertising on Facebook. 1.3 Conceptual Framework Based on the research questions and stated hypotheses, a conceptual framework was developed. The conceptual framework was based on a previous research model developed by Yaakop (2012), who 7

18 studied the relationship between users perception and attitude toward online social network advertising in Malaysia. Independent variable Dependent variable Perceived interactivity H1 Perceptions toward SNA Advertising Avoidance Credibility H2 H3 Attitude toward advertising on Facebook Privacy H4 Figure 4: Conceptual model Dependent variable: The attitude toward advertising on Facebook is the dependent variable of this study. Independent variables: Perceived interactivity, credibility, advertising avoidance and privacy are the observed factors in this study that influence the attitude toward advertising on Facebook. 1.4 Justification of the Research The research is justified on grounds of: Rapid growth of Social media, especially Online Social Networks, both worldwide and local. This justification is partly explained in section 1.1 (Research background). Online Social Networks are becoming the primary arena for highly targeted marketing and advertising and have become a medium for market practitioners to easily engage with potential consumers. Lack of research; it is clear that companies in Suriname are engaging with Online Social Networks, especially Facebook, to create company image and brand awareness. But there is a gap in research in the arena. 8

19 Benefit to provide information; the results of this research may provide essential information to marketers, companies and advertisers in Suriname. Having the right information may yield more effective results in marketing campaigns. 1.5 Research approach and methods Strategy for this research is based on positivism, because the research relies heavily on experimental and manipulative methods. These methods ensure that there is a distance between the subjective biases of the researcher and the objective reality. 5 Furthermore this research has a deductive approach, because the researcher develops a theory and there are hypotheses which must be tested, by collecting quantitative data. Positivism which emphasizes objectivist approach to studying social phenomena gives importance to research methods focusing on quantitative analysis, surveys, experiments and the like. 6 In this study questionnaires were distributed to collect primary data, followed by analyzes of the data in statistic software SPSS version Questionnaires were handed out personally to students. 1.6 Scope and Limitation This study only focuses on Facebook as the largest SNS worldwide. It is also assumed that Facebook tend to be the most common used SNS in Suriname. The research audience of this research is Bachelor students at the Anton de Kom University. University students tend to use SNSs frequently and have a certain level of knowlegde about internet (Yaakop et al., 2012). In Suriname, Facebook is the most popular SNS among university students. Since the largest group of Facebook users in Suriname lies between the age of 18 and 34, it can safely be presumed that university students are part of this group. Further this research only focuses on consumers perception, because every consumer or individual has a different perception of certain events, including advertising. Therefore this research can provide maketers, companies and advertisers essential information about the way this group of people thinks about advertisement placed on Facebook. 5 (retrieved on March, ) 6 (retrieved on March, ) 9

20 1.7 Chapter overview The first chapter gives an overview about the overall idea of the research project, involving a brief introduction of the research problem, research objective, research questions and research methodology. It also states the scope and limitations of the study. The second chapter focuses on the review of literature involving different textbooks, journal articles, reports and other sources related to the research. Literature research about social networking sites, perceived interactivity, credibility, advertising avoidance and privacy are important to conduct in this study. Past studies about consumer s attitude toward advertising on SNS, including Facebook are also of relevance. The Third chapter describes in details the aspects of research design and research methodology employed in the research study. The Fourth chapter focuses on the analysis of the data gathered during the research process and presents the main findings of the research study. The Final chapter discusses the results of the study and derives the recommendations. 10

21 2 LITERATURE REVIEW 2.1 Introduction As previous studies stated, online advertising in particularly SNA, has become an interesting marketing arena for advertisers, marketers and businesses. Lots of businesses considered Facebook as an effective tool to advertise their products and services, but the extent to which people perceive advertising and the way they respond to it, are even more important for their advertisements to be effective. This chapter discusses advertising in Social Network Sites (SNS), and the perceptions and attitude toward such advertising. 2.2 Advertising in Social Network Sites (SNS) The term Advertising has been defined by various marketing professionals and researchers as a communication tool to provide customers of product and service information with the aim to sell. In the modern world of internet technology advertising has reached another dimension with the rapid growth in social media, in particularly Online Social networks. The very first social network site, SixDegree.com, was launched in 1997 and since then it was known as the foundation of all existing social network sites today (Boyd & Ellison, 2007). Many studies described the term social network sites differently, though they have similar meanings. Kaplan & Heanlein (2010) defined SNSs as applications that enable users to connect with each other by personal profiles, sending mails and instant messages. Jothi, Neelamalar, & Prasad (2011) described SNSs as online communities of people who share interests and activities with others. As for Bolotaeva & Cata (2011) SNSs are instruments for building virtual communities for individuals with common interests and activities. According to these definitions or descriptions, sharing interests and interactivity are the common goals of SNSs. Advertising on SNS is a form of online advertising that focuses on social network sites such as Facebook, Twitter, LinkedIn, YouTube, MySpace, etc. Facebook is the most popular and interesting SNS among businesses to use for promotion purposes. This SNS provides features that businesses and advertisers can use to target their market, because it allows access to demographic information of its users (Roberts, 2010). Besides this, there are several reasons for businesses to get engaged with SNSs. Using social networks as advertising tools is cost efficiency and can reach a larger group of potential consumers (Todi, 2008). Advertising in SNS is cost efficient, because first of all, the use of social networks is free. Secondly, companies can be creative and innovative in the 11

22 way they advertise to attract consumers (Nopanen, 2010). Since social networking websites have millions of active users who build relationships, share interests and activities, an advertisement could reach a large scale (Yang, Kim, & Dhalwani, 2008). Facebook is a well-known SNS that advertisers, marketers and businesses use for promotional purposes. The advantage of Facebook is its ability to attract users to use text, images, videos and links as interactive content, as strategies to track and share new products with consumers (Yaakop et al., 2012). Due to the aggressive growth of Facebook, companies are able to provide a large group of people information about their business and brand; therefore they have the opportunity to be visible to the world. Like any ordinary Facebook user, companies can also create a profile and interact with their Fans about their business activities. 2.3 Consumers perception toward Social Network Advertising (SNA) It is of great importance for marketers and advertisers to have an idea about how people think of advertising in SNS if they want their promotional message to be effective. Studies about attitude toward advertising have been done by several researchers, yielding different results. Nevertheless there are only a few surveys of attitude toward advertising in SNS, because it is a new phenomenon. Previous studies had found that factors such as perceived interactivity, credibility, advertising avoidance and privacy, influence the perception toward social network advertising. In this paragraph the four dimensions of perception toward social network advertising are explained. Since SNA is a form of internet or online advertising, researches on perception toward internet advertising are also relevant for this study. Perceived interactivity Interactivity is a way individuals effectively communicate with each other, regardless of distance and time (Hadija,2008). Technically, this occurs between a human being and a computer (program) or any communication device. Presently, interactivity on the internet shifts the ways in which users perceive advertising (Hadija, 2008). Wu (1999) stated that user s attitude toward websites is positively related to their perceived interactivity to websites. Referring to this statement it can reasonably be argued that perceived interactivity can also have an effect on the attitude toward advertising placed on Facebook, since Facebook is a social network website. People can actively communicate with the (advertising) company about ads they post on Facebook, because of its interactive capacities. In the following, studies concerning attitude toward online advertising are 12

23 discussed, which only focused on the perception of interactivity toward online advertising. Some negative and positive arguments were identified during the literature research. A study conducted by Hadija (2008), who did an exploratory study on perceptions of advertising in online social networks, clearly explained that the extent to which people perceived interactivity of an online advertisement determined the success of such advertisement. In this case interactivity was negatively influencing respondent s attitude. People ignored advertisements when they visited SNSs and instead they focused on other contents that interested them. Thus, social network advertisements simply did not catch their attention and they never noticed them. Further respondents were not even interested in brands being promoted on online social network sites and they had neither clicked on an advertisement nor visited a product website or bought any product online. Most of the respondents in this research clearly had an unfavorable attitude toward the interactivity of advertising on SNSs. However, the research was based on an in-depth interview among a limited amount of 20 university students. Kelly (2008), who also did an exploratory study on perceptions toward advertising in the social network environment, stated that teenagers did not like advertising on SNS. SNA did not interest them, because they focused on other attractive content. In contrast to these unfavorable arguments about SNA another study done by (Azeem & Haq, 2012) found that respondents thought of internet advertising as very informative and entertaining. People clicked on online advertising if it was entertaining and if they could get relevant information from it. Perceived interactivity in this case had a positive influence on the attitude toward internet advertising. Schlosser, Shavitt, & Kanfer (1999) declared an other favorable argument regarding the interactivity. Respondents of this study said that the available information on the internet advertising supported their purchusing decissions. The perceptions regarding the factor interactivity found in four studies were compared and resulted in positive and negative opinions about SNA. Hadija (2008) and Kelly (2008) did a qualitative study and focused on a very small research audience. During that time of research, limited surveys about perceptions toward SNA were found and they started to explore this subject to get an idea of how people think about advertisements placed on SNSs. Azeem & Haq (2012) and 13

24 Schlosser et al.(1999) did a quantitative study on internet advertising and therefore focused on a larger group of research audience. Studies done by Hadija (2008) and Kelly (2008) based on a qualitative appoach, resulted in negative perceptions toward internet advertising, whilst Azeem & Haq (2012) and Schlosser et al. (1999) found positive results. Advertising Avoidance Advertising avoidance was also highlighted as an issue in online advertising. People avoid SNA, because they don t trust a website or are constantly being interrupted by pop-up advertisements. This part only focuses on Advertising avoidance as a factor of perception toward online advertising, which was found in several studies. Cho & Cheo (2004) argued that Perceived Goal Impediment, Perceived Ad Clutter on the Internet and Prior Negative Experiences are the causes of internet advertising avoidance. Factors such as interrupting or disrupting online advertisement, when searching for information on the internet or implementing online activity, were highly correlated to advertising avoidance (Cho & Cheo, 2004). However Kelly et al. (2010) found in their study that advertising avoidance was caused by the fact that online advertising was considered as irrelevant and disruptive. Skepticism of advertising messages and SNS as advertising medium supported the ignorance. Avoidance caused by negative past experiences happens when consumers encounter unfavorable situations, such as receiving deceiving messages (Yaakop et al., 2012) or when they heard from people with negative experiences, such as getting a computer virus by clicking on an advertising link (Kelly et al., 2010). The above mentioned studies are related to each other. It can rationally be argued that the results of the three studies indicate the significant relationship between advertising avoidance and attitude toward internet advertising. Credibility Credibility in this study is described as the extent to which consumers believe and trust advertising on SNS (Yaakop et al., 2012). In previous researches, credibility was often considered as an important factor to look into, when it came to discussing the perception and attitude toward internet advertising in particularly SNA. In this part, the discussions about several studies are only with regard to credibility as a factor of perception toward online advertising, including SNA. 14

25 Overall, people considered internet as a trustworthy media for providing information and not as an advertising medium (Moore & Rodgers, 2005). This argument was supported by Hadija (2008), who found in her study that people considered the internet favorable for obtaining valuable information, but unfavorable as an advertising medium. A reason why people did not trust advertisements and simply avoided them is because they felt at risk of getting a computer virus by clicking on an ad and thought such advertisements as irrelevant (Kelly, 2008). In most cases the level of trust and belief in advertisement among respondents was somehow low, but there was more confidence in advertising claims when it came to purchase decisions (Shavitt et al., 1998). Yaakop et al. (2012) who also did research on credibility and attitude toward internet advertising stated that credibility did not predict the attitude toward SNA, whilst Abdul Azeem & Haq (2012) found that credibility predicted the attitude toward SNA. Yaakop et al (2012) focused their research on advertising placed on Facebook and stated credibility as a factor of perception toward advertising on Facebook, while Azeem & Haq (2012) focused on online advertising and mentioned credibility as a factor of beliefs in ATOA. Although both studies were about attitude toward online advertising, they yielded different results. Since Facebook is considered as a personal webpage it can have different effects on users perception and attitude toward advertisements placed on such SNS. Furthermore, the two exploratory studies done by Hadija (2008) and Kelly (2008) showed negative results on credibility regarding SNA. Privacy People identified SNSs as personal websites (Kelly et al.,2009) and therefore thought of advertising on their SNS as an intrusion in their privacy. Privacy as a factor of perception in this study, discusses the extent to which one feels and thinks about advertising posted on their personal social network page such as Facebook. In this part of the study, privacy is related to perceptions regarding the influence of advertising on the value of our youth, the informativeness and intrusiveness of advertising posted on Facebook. In a study of Azeem & Haq (2012) it was found that online advertising had a strong negative effect on moral values and social justice. The explanation behind this issue was that advertising had been criticized for promoting materialism, insecurity and greed in society, resulting in creating needs and desires that consumers might never recognize on their own (Azeem & Haq, 2012). Another 15

26 inauspicious argument about online advertising, especially SNA, was that people mostly experienced it as intrusive because social network sites were seen as private and personal spaces (Kelly et al., 2009). Online advertising was however, very favorable for others, because it kept them up-to-date about products and services available in the marketplaces (Azeem & Haq, 2012) and supported their purchase decision making (Schlosser et al., 1999). Table 3 illustrates the comparison of the results found in several studies concerning the four factors of perceptions toward online advertising, which also includes SNA. Table 3: Comparison of researches on Perceptions toward Online Advertising Context Factors Re_1 Re_2 Re_3 Re_4 Re_5 Re_6 Re_7 Perception Perceived n.a n.a toward SNA interactivity Advertising n.a - n.a n.a Avoidance Credibility n.a n.a n.a Privacy n.a n.a Source: researcher generated, 2013 Re_1 = Hadija (2008) Re_5 = Yaakop et al (2012) (+) = positively perceived Re_2 = Kelly (2008) Re_6 = Kelly et al.(2010) (-) = negatively perceived Re_3 = Azeem & Haq (2012) Re_7 = Cho & Cheo (2004) n.a = not applicable Re_4 = Schlosser et al, (1999) According to table 3, perceived interactivity, credibility, advertising avoidance and privacy were found as negative as well as positive perceptions toward online advertising. The methodology used in various studies could have had an effect on the difference in perceptions toward online advertising. Results of some of the studies were based on in-depth interviews, meaning that a very small group of participants were involved. Clearly this small group of participants who visited SNSs was pessimistic about advertising posted on SNSs. However this group of people consisted of teenagers and students, meaning that they were generally more skeptical when it came to advertising on their personal webpage (Yaakop et al., 2012). Contrary to this, studies with a quantitative approach, using a survey, resulted in a more favorable perception toward online advertising. These studies focused their research on larger groups of 350 to 1000 participants. 16

27 Thus, the chance of identifying people with a more positive perception toward online advertising was more likely. 2.4 The relationship between users perception and attitude toward SNA The term attitude means the way one thinks and feels about an idea, a belief or an object. In this case attitude is described as the way one thinks and feels about advertising posted on Social Networking Sites, particularly Facebook. For decades, studies on attitude toward advertising were conducted. Presently, with the rapid growth of Social media, especially SNSs, advertisers and marketers are interested in the attitude toward online advertising. In this paragraph several researches on both attitude toward advertising in general and ATOA are discussed. During literature research positive and negative attitudes toward advertising were identified and were further related to perceptions toward online advertising, which were discussed earlier. A study done by Mehta (2009) found that respondents thought of advertising as both favorable and unfavorable on different aspects. The positive attitude toward advertising is that it kept them up-todate about products and services in the marketplace and they enjoyed looking at it. Less favorable aspects were that products did not perform as well as advertisements had claimed and were more manipulative than informative. Shavitt et al. (1998) who conducted a study among 1000 Americans, concluded that they enjoyed advertisements they saw, and found advertising informative and useful in guiding their purchase decissions. Advertising in this study tended to be pleasant and truthful. Both studies were focused on attitude toward advertising in general and used a quantitative approach, using a survey to gather data. Schlosser et al. (1999) found in their study that respondents thought of online advertising as truthful, entertaining, informative and supportive when making purchasing decissions. However, the main focus of their research was to compare online advertising with general advertising, which is not the focus of this study. Results showed that respondents had a more favorable attitude toward online advertising than general advertising emphasized on factors such as credibility, informativeness and interactivity. 17

28 Unlike the last mentioned research, Chandra, Goswami, & Chouhan (2012) stated in their study that customers had unfavorable attitude toward online advertising. Their research on the attitude was based on factors like advertising value, informativeness, entertainment, irritation and credibility. A study conducted by Azeem & Haq (2012), found that beliefs about online advertising had a positive effect on ATOA. In their research they related informativeness, entertainment, credibilty, economy and value as beliefs about online advertising to ATOA. Results indicated that informativeness, entertainment, credibilty and economy, posively influenced the ATOA, while the influence of value was negative. Bond, Ferraro, Luxton and Sands (2010) did a research on perceptions, attitude, and preferences for engagement concerning Social Media Advertising. They conducted an exploratory study and found that respondents did not think that Social media, such as Facebook were suitable for advertising, because Facebook as a personal medium could result in a firewall against use of this space to be marketed at. What they suggested was that a mix of tradional and social media advertising should be implemented to get the maximum effort. Social media advertising would purely be used for interacting with customers and would therefore build solid relationships. Another exploratory study done by Kelly et al. (2009) resulted in negative attitude toward online advertising. Respondents saw online advertising as untruthful, unpleasant, unreliable and unfavorable. The reason behind this negative ATOA was that respondents considered SNSs as personal space where they share experiences and interests with friends and peers. However this study was conducted among teenagers, who generally use SNSs for personal purposes and therefore were very skeptical of advertisement on their SNS. These research results can be supported by Hadija (2008), who also found negative aspects that predicted this attitude toward SNA. According to the results from aforementioned studies it could be argued that a negative perception toward SNA would also result in a negative attitude toward SNA, and a positive perception would result in a positive attitude toward SNA. Either way, consumers perception has an influence on their attitude toward SNA. This logical interpretation can also be referred to the definitions of perception and attitude mentioned in the introduction of this thesis. Table 4 illustrates the comparison of the results found in several studies concerning attitude toward online advertising, including SNA. The arguments about the attitude toward both general 18

29 advertising as well as ATOA found in these studies were categorized into four factors, namely truthfulness, reliability, favorableness and pleasantness. Table 4: Comparison of attitude toward Online Advertising Context Factors Re_1 Re_2 Re_3 Re_4 Re_5 Re_6 Re_7 Attitude Truthful +/ n.a - - toward SNA Reliable n.a - - Favorable n.a - - Pleasant n.a - - Source: Researcher generated, 2013 Re_1 = Mehta (2009) Re_2 = Schlosser et al (1999) Re_3 =Chandra et al (2012) Re_4 =Azeem & Haq (2012) Re_5 = Bond et al. (2010) Re_6 = Kelly et al (2009) Re_7 = Hadija (2008), (+) = positively perceived (-) = negatively perceived n.a = not applicable According to table 4, participants reaction of previous researches, which have been discussed in this study, has not only been negative to advertising placed online, but some have also had a positive view about it. Notably, studies based on a qualitative approach had a more pessimistic attitude toward online advertising than studies based on quantitative approach. The difference could be found in the amount of respondents who participated in these studies. What could also be considered is the country in which the surveys took place. Take into account the economic situation and literacy. A country with a weak economic situation will probably have limited access to internet facilities and are less vulnerable to online advertising. A country where the illiteracy rate is very high, this would probably have a less favorable impact on the effectiveness of online advertising. 2.5 University students and their perception and attitude toward advertising Most of the researches conducted in this study focused on students, in particular college and university students. Students tend to spend more time on Facebook, whereby the chance of getting exposed to advertising on Facebook is higher (Sharma, 2011). Comparing the studies focusing on students and of those which focused on the public, it was notable that students were more skeptical 19

30 of any form of advertising that was presented to them, especially when they were confronted with online advertising on their personal web page. Results of studies done among students were mostly negative on the perception and attitude toward advertising. This group of people is also known as young adults, referring to a definition found in a study done by Eze & Lee (2012) who defined young adults as people between the age of 15 and 34. Unlike students, the general public on which some studies focused, had a more favorable attitude toward any kind of advertising. 2.6 Summary Although social network advertising is a well-known marketing tool for organizations to reach a large audience, attitude and perception toward any kind of advertisement are the ultimate measurements of successful advertising. This chapter highlights the relevant theories regarding social network advertising and users perception and attitude toward such advertising. Results of previous common studies are compared and discussed. The discussion about the independent variable of this study perception toward SNA was based on four factors, namely perceived interactivity, credibility, advertising avoidance and privacy. Past studies, where these factors were identified, were compared with each other and it was noted that students, on which some studies focused, perceived SNA more negatively than the general public. Furthermore, the attitude toward SNA was discussed based on previous studies. The extent to which people found advertising truthful, reliable, favorable and pleasant was highlighted in several studies. Notably, students were more pessimistic toward SNA compared to the general public. It became clear that there was a significant relationship between perception and attitude toward SNA and the way people saw or understood this, influenced their feelings and thoughts. The next chapter will focus on the research methodology. 20

31 3 METHODOLOGY 3.1 Introduction This chapter describes in detail, the methodology which was used for this research to collect the necessary data. There are several steps which had to be followed in order to gather the right data. The following figure depicts an outline of this chapter with section numbers and inter-relationships. Introduction (section 3.1). Research strategy & design (section 3.2). Sampling strategy (section 3.3) Summary (section 3.5) Data analysis strategy (section 3.4) Figure 5: Outline of chapter 3 Source: Researcher generated, 2013 This chapter begins with an outline (section 3.1), followed by the research strategy and design (section 3.2), where the theoretical framework, the dependent and independent variables, the research questions and generated hypotheses are described. Section 3.2 ends with the questionnaire design. In section 3.3 the sampling strategy is explained, followed by section 3.4 where the chosen data analysis strategy for this study is described. This chapter ends with a summary in section Research Strategy and Design The strategy for this research was based on positivism, because the research relied heavily on experimental and manipulative methods. These methods ensured that there was a distance between the subjective biases of the researcher and the objective reality 7. Furthermore the approach of this 7 (retrieved on March, ) 21

32 research was in a deductive way, because the researcher developed a theory and there were hypotheses which had to be tested, by collecting quantitative data. This quantitative research looked into the relationship between users perception and their attitude toward advertising on Facebook among university students. Quantitative data was collected through a questionnaire from bachelor students of the Anton de Kom University of Suriname, and was statically analyzed to test the hypotheses developed in this study Theoretical Framework A modified version of the conceptual model of Yaakop et al. (2012) was used for this study, because the factors depicted in the model were highlighted as factors that determined perceptions toward ATAO in previous studies. The researcher of this study chose to use the conceptual model of Yaakop et al., to apply it in the Suriname situation in order to identify the perception and attitude toward social network advertising. The next figure represents the theoretical framework of this study: Independent variables Dependent variable Perceived interactivity H1 Perceptions toward SNA Advertising Avoidance Credibility H2 H3 Attitude toward advertising on Facebook Privacy H4 Source: Yaakop et al. (2012) Independent Variables (IV) In this study the following independent variables were the observed factors which had an effect on the attitude toward advertising on Facebook. These were (1) perceived interactivity, (2) advertising avoidance, (3) credibility and (4) privacy. These variables determined how the dependent variable was influenced. 22

33 3.2.3 Dependent Variables (DV) The attitude toward Advertising on Facebook can be seen as the dependent variable in the research model. In this study attitude toward advertising on Facebook is determined by the aforementioned independent variables. The extent to which the dependent variable was influenced by the independent variables is the outcome of this research Research questions and Hypotheses This research focused on investigating any relationship between the aforementioned independent and dependent variables and therefore identified the extent to which users perception had an influence on the attitude toward advertising on Facebook. The main research question formulated for this study was: How does users perception have an influence on their attitude toward advertising on Facebook? The main question is supported by sub-questions, namely: 1. Does perceived interactivity have an influence on University students attitude toward advertising on Facebook? 2. Does advertising avoidance have an influence on University students attitude toward advertising on Facebook? 3. Does credibility have an influence on University students attitude toward advertising on Facebook? 4. Does privacy have an influence on University students attitude toward advertising on Facebook? Four hypotheses were formulated for this research, which were derived from the independent variables in the research model. These formulated hypotheses were: H1: Perceived interactivity has an influence on University students attitude toward advertising on Facebook. H2: Advertising avoidance has an influence on University students attitude toward advertising on Facebook. H3: Credibility has an influence on University students attitude toward advertising on Facebook. H4: Privacy has an influence on University students attitude toward advertising on Facebook 23

34 3.2.5 Questionnaire design For primary data to be collected a questionnaire was designed based on questionnaires from Hadija (2008), Kelly (2008) and Yaakop et al. (2012) conducted in previous studies. The main reason for using these existing questionnaires was to accurately gather data from University students from Suriname and to identify their perceptions and attitudes toward SNA. This survey method is a preferred and adequate tool when gathering data from a large research audience. The questionnaire consisted of 34 close ended questions to which were divided into three parts. They were all single questions, except for question number 34, which was divided in sub questions a, b, c and d. The next table gives an overview of the questionnaire. Table 5: Questionnaire Table Part Item # Questionnaire name Factor name SPSS Code A 1-10 Demographic and general SNA information Q1-Q10 B Perception toward advertising on Facebook: Perceived INT11 INT16 Interactivity Advertising Avoidance ADAV17- ADAV Credibility CRED23- CRED Privacy PRIV29-PRIV33 C 34 Attitude toward advertising on Facebook a Truthful ATAD34a b Reliable ATAD34b c Favorable ATAD34c d Pleasant ATAD34d Source: Researcher generated See appendix A for the complete questionnaire. 24

35 Part A of the questionnaire pertained to the demographic information of the respondents and their general opinion with regard to social network advertising. Part B and C respectively dealt with the perception and attitude toward advertising on Facebook. In order to utilize the statements regarding perceptions and attitudes toward advertising on Facebook, a five-point Likert scale measure was used. In part A, with regards to age, an interval scale was used. The following table depicts the scales used in this survey. Table 6: The Five-point Likert Scale Statements Code Scale 1 (Part B) Scale 2 (Part C) Scale 3 (Part C) Scale 4 (Part C) Scale 5 (Part C) 1 Strongly disagree Untruthful Unreliable Unfavorable Unpleasant 2 Disagree Somewhat untruthful Somewhat unreliable Somewhat unfavorable Somewhat unpleasant 3 Neither disagree Neutral Neutral Neutral Neutral nor agree 4 Agree Somewhat truthful Somewhat reliable Somewhat favorable Somewhat pleasant 5 Strongly agree Truthful Reliable Favorable Pleasant Source: Researcher generated A Likert scale is a comprehensively used measure for scaling responses in a survey research. In this survey, a five-point Likert scale was chosen, with a neutral option to avoid unanswered items when respondents had neither a positive nor negative opinion about advertising on Facebook. Table 7: Interval Scale Code Interval scale (for age) (Part A) 0 Younger than Older than 30 Source: Researcher generated

36 3.3 Sampling Strategy To obtain the appropriate information for the research objectives, a probability (random) sampling was conducted. This sampling technique gave every member of the population an even and independent opportunity to be selected and ensured that the research population was properly represented. Since the research focused on University students, the survey was solely conducted at the Anton de Kom University of Suriname; which happens to be the only university in the country. The reason for selecting University students as a research population was because the researcher assumed that this group of people had a certain level of knowledge about internet and was part of the major group of Facebook users in Suriname. Refer back to figure 3, which gave an overview of the largest Facebook users in Suriname, ranging between the age of 18 and 34. The sample size consisted of 10% of total 3496 bachelor students at the University with a 95% confidence level as well as a margin of error of 5%. For distribution purposes, a list of bachelor students was obtained, which was then classified in gender and faculties (see list in Appendix C). The participants were randomly chosen, which means that every student had an even chance to be selected. A total of 500 questionnaires were handed out personally to students. Questionnaires were received between the 22 th of April and the 8 th of May, Furthermore, a pilot test among 20 students was conducted to test the reliability of the questionnaires. 3.4 Data analysis Strategy The primary data collected from the questionnaires was completely quantified and analyzed by using Statistical Package for Social Science (SPSS) version 20. This statistical program enables accuracy and makes it relatively easy to interpret data. Descriptive and inferential analyses were performed. The descriptive analysis included frequencies and means statistics that were carried out to sum up main data of the respondents, so as to obtain an outline and to support further analyses. The inferential analyses consisted of: Reliability Analysis, which tested the consistency among a set of items within each factor. The Cronbach s Alpha (CA) test was carried out to test reliability of the item, with the condition that the alpha value had to be 0.7 to be acceptable. When the Alpha values were lower than 0.7, the number of variables (set of an item) were not correlating. Hence it was recommended to implement a Factor analysis. Factor Analysis, namely a Principal Component Analysis (PCA), which is a multivariate method, used for data reduction purposes. This method identified items that best fit together 26

37 and combines these. Hence, other sets of variables occurred and the number of variables was reduced. Regression Analysis (Simple linear regression model) that looked into the strength and direction of the relationships between the dependent and independent variables and identified the cause-effect relationship between the variables. 3.5 Summary This study was approached in a positivism-deductive way and it was considered as the most appropriated research method, because it enabled the researcher to gather data needed in a relatively simple, cost-efficient and structured way. The most effective and relatively accurate method to gather data from a large population was through questionnaires, which in this study was accurately analyzed by Statistical Package for Social Science (SPSS)

38 4 FINDINGS AND ANALYSIS 4.1 Introduction This chapter discusses the results of the research. The survey response rate is presented, followed by the statistical techniques performed for the collected data. Further, this chapter discusses the descriptive and inferential results. For the inferential results, the reliability analysis was performed to test if the variables were related to each other. The next step in this chapter discusses the principal component analysis (PCA), followed by a simple linear regression analysis to identify the relationship between the independent and dependent variables. The chapter ends with a summary, containing the conclusions. 4.2 Survey Response Rate As stated in chapter 3, the research was conducted among bachelor students of the Anton de Kom University of Suriname. 10% of the bachelor population represented the sample size, which is equal to a total of approximately 350 students. 500 questionnaires were simultaneously distributed to the three faculties (Medical, Social and Technical Science), whereof 329 students responded and 171 did not respond. Out of the 329 questionnaires received, 40 were incompletely filled in and were therefore considered as errors. A total of 289 (87.8%) questionnaires remained valid and were used for further analysis (see table 8). See appendix B for the generated list of the population size by gender and per faculty. Table 8: Survey Response Rate University Students Percent Distributed % No Response % Responded % Not valid 40 (40/329) 12.2% Valid 289 (289/329) 87.8% Source: Researcher generated survey data,

39 4.3 Descriptive Results In this section the descriptive results of the data gathered through 289 valid questionnaires are summarized. Table 9: Frequency of respondents' profile No. of respondents % Cumulative% 1 Gender Male Female Age Younger than Older than Bachelor course: B1 (Bachelor first phase) B2 (Bachelor second phase) B2 (Bachelor graduation phase) Faculty Medical Science Social Science Technical Science Do you participate in online social networks? Yes No How often do you go online? Less than once a week times a week times a week times a week More than 10 times a week How much time do you generally spend using online social networks? Less than an hour a week hours a week hours a week More than 6 hours a week

40 8 How do you generally feel about advertising on Social Network Sites? I don't care about it Annoying Informative Manipulative Interesting How often do you login to Facebook? less than once a week times a week times a week times a week more than 10 times a week On average, how much time do you spend on Facebook per week? Less than an hour a week hours a week hours a week More than 6 hours a week Note*: (N= 289) Source: Researcher generated survey data, 2013 According to table 9, most of the respondents were first year bachelor students (72.3%), between 20 and 25 years of age (63.7%) and attended the Faculty of Social Science. These students had a fulltime schedule and were available daily to participate in the survey. Moreover, the largest group of students at the University is attending the Faculty of Social Science. Furthermore, the respondents were major Facebook users, considering their high frequency of Facebook visits. This was a good sign, since the researcher wanted to find out their perception and attitude toward advertising on Facebook, assuming that they had at least once been confronted with an advertisement on Facebook. Another remark was that there were more female than male respondents due to the fact that 30% of the total university population consists of men and 70% of women (see appendix C). Figure 5 below, gives an overview of the valid response rate by gender and per faculty. 30

41 80% 60% 40% 20% 0% Crosstab Gender/ Faculty 68% 64% 57% 43% 32% 36% Medical Science Social Science Technical Science Q4 Q1 male Q1 female Figure 6: Valid response rate by gender and per faculty Source: Researcher generated survey data, The next tables show the results from the independent and dependent variable (attitude toward advertising on Facebook) of the respondents. The results on the mean and median indicate the extent to which the respondents agreed or disagreed with the statements. The higher the mean and median, the more respondents agreed with the statements. The results on the mode indicate which answer possibility the respondents gave the most. The Independent Variables: Table 10: Frequencies of Perceived Interactivity Statements Mean Median Mode Advertisements on Facebook catch my attention among other content. I will visit a product website after being exposed to an ad on Facebook. I will purchase a product advertised on Facebook In my daily activities, I recognize brands as the ones that are advertised on Facebook. It is easier for me to remember brands advertised through other media channels such as TV and radio as opposed to the ones advertised on Facebook. Facebook advertising is a valuable source of information about latest fashion. Source: Survey data

42 Perceived Interactivity: The results generated from this independent variable should measure the perception toward the interactivity of advertising on Facebook. The respondents needed to answer six items on a fivepoint Likert scale, which were noted as 1= strongly disagree; 2=disagree; 3=neutral; 4=agree and 5=strongly agree. Most of the respondents were neutral on all statements regarding perceived interactivity (mode=3). However, the median on the third item was low, which indicates that respondents disagreed, when it came to purchasing a product that was advertised on Facebook. Table 11: Frequencies of Advertising Avoidance Statements Mean Median Mode I visit Facebook with a bit of a plan of what I am going to do. I can list the advertisements that I can remember seeing on Facebook. Advertisement on Facebook tells me what persons like me are buying or using. I felt that I was at risk of getting a virus by clicking an advertising link on Facebook. The position of an advertisement is the biggest factor that prevents me from looking at ads on Facebook. I am a fan of at least one company or brand on Facebook. Source: Survey data, Advertising Avoidance: The independent variable Advertising Avoidance represented six items. Looking at the mean and the mode on the second, the third and the forth item, these were very low. This indicated that the sample group averagely disagreed with these statements. However the mode on the last item was high, which gives an idea that most respondents were a fan of at least one company or brand on Facebook. 32

43 Table 12: Frequencies of Credibility Statements Mean Median Mode Advertisements on Facebook provide accurate information about products/services. Facebook advertising insults the intelligence of the average consumer. Facebook advertising tells me which brands have the features I am looking for. There are too many exaggerations in Facebook advertisements. Facebook should be used for promoting commercial products/ services. Because of Facebook advertising, people buy a lot of things that they do not really need. Source: Survey data, Credibility: The sample group averagely was neutral on all statements that represented Credibility, except on the second item, where they disagreed about Facebook advertising insulting the intelligence of the average consumer. Table 13: Frequencies of Privacy Statements Mean Median Mode Facebook advertising distorts the values of our youth. Advertisements found on Facebook are tailored to your interests. Facebook advertising keeps me up to date about products/services available in the marketplaces Advertisements on Facebook are intrusive Users of Facebook will be forced to see the advertisement every time they log in. Source: Survey data,

44 Privacy: The items representing the independent variable Privacy should measure the perception toward advertising posted on the users Facebook page. Facebook is seen as a personal social networking platform, where users share their personal information. According to table 13, most respondents were neutral with the items regarding privacy. The Dependent Variable: Table 14: Frequencies of Attitude toward Advertising on Facebook Statements Mean Median Mode Attitude toward advertising on Facebook (34a) Attitude toward advertising on Facebook (34b) Attitude toward advertising on Facebook (34c) Attitude toward advertising on Facebook (34d) Source: Survey data, Attitude toward advertising on Facebook: The results of the items given in this part of the survey should measure the attitude toward advertising on Facebook. On the first item the respondents needed to indicate to what extent they thought advertising on Facebook was truthful. The second item covered the extent to which respondents thought advertising on Facebook was reliable. The third and the forth item respectively indicated the extent to which respondents thought advertising on Facebook was favorable and pleasant. Looking at the means and modes in the statistical results, this showed that the sample group was neutral with all items with regard to privacy. 4.4 Inferential Results and how to get a Reliable Model The inferential results of the data gathered for this research is summarized in this paragraph, which includes the reliability, factor and regression analyses Reliability Analysis After carrying out the Cronbach s Alpha test, results showed low values for the independent variables Perceived Interactivity (0.669), Advertising Avoidance (0.464), Credibility (0.597) and Privacy (0.486), except for Attitude toward advertising on Facebook (0.7). This meant that the items within each independent variable did not correlate due to the results of the data generated from the respondents. The next table gives an overview of the CA values. 34

45 Table 15: Cronbach's Alpha Values Factor name Alpha No. of Items Independent Variables: Perceived Interactivity Advertising Avoidance Credibility Privacy Dependent Variable: Attitude toward Advertising on Facebook Source: Survey results, 2013 The next step was to conduct a factor analysis (PCA) on the independent variables to ensure better results on testing the hypotheses Factor Analysis A factor analysis, which included principal component analysis (PCA) with a varimax rotation, followed by principal component regression (PCR), was used to analyze the hypotheses in the research model. With the PCA, the researcher reduced the number of 23 items concerning the independent variables in the model to a smaller number of rather important factors. The tested model consisted of four independent factors: perceived interactivity, advertising avoidance, credibility and privacy and a dependent factor; attitude toward advertising on Facebook. Since PCA was only applied for the independent factors, the researcher looked for other possible underlying factors and tested if they were also considerable in the Surinamese community. By conducting PCA, all items INT11 till PRIV33 were regrouped into four factors: PC1, PC2, PC3, and PC4. Table 16 shows the results of the retained factors after PCA. (See appendix B for the codebook) Perceived Interactivity This independent variable initially consisted of six factors, namely INT11 till INT6, excluding INT15 which was considered as an invalid item during data processing in SPSS. After conducting PCA, INT16 was deleted because of a low communality (0.457). PCA produced a new set of variables (PC1), which were INT12, INT13, INT14, and ADAV18 (see appendix B for the codes) 35

46 Looking at the above mentioned variables each one of them dealt with interactivity; hence the factor Perceived Interactivity remained unchanged. Advertising Avoidance This extent consisted of six factors: ADAV17, ADAV18, ADAV19, ADAV20, ADAV21 and ADAV22. During PCA, the following factors of Advertising Avoidance were dropped sequentially: ADAV17because of low communality (3.93) ADAV19 because of low communality (0.411) ADAV20 because of low anti-image (0.480) ADAV21 because of low communality (0.290) The PCA dropped the independent variable Advertising Avoidance. The remaining factors ADAV 18 and ADAV22 were added to other factors. It was clear that none of the six items covered Advertising Avoidance. Credibility Credibility initially consisted of six factors: CRED23, CRED24, CRED25, CRED26, CRED27, and CRED28. During PCA, the factors, CRED27 and CRED28 were deleted because of low communality values of respectively and Apparently there were other factors representing Credibility. These were CRED24, CRED26, and PRIV29 (see Appendix B for the codes) Privacy At first Privacy was represented by five factors: PRIV29, PRIV30, PRIV31, PRIV32, and PRIV33. After PCA only two variables could cover Privacy, which were: PRIV29 and PRIV31 (see appendix B for the codes). PCA has not only dropped variables and regrouped the remaining ones, but it extracted a new factor X, which could be covered by the variables, ADAV22, CRED23, CRED25, and PRIV31 (see appendix B for the codes). Looking at these variables each one of them was related to the informativeness of advertising posted on Facebook. Informativeness was therefore added as the new factor of the research model. 36

47 The theoretical argumentation for the added factor to formulate an additional hypothesis for this research was as follow: The quality of information placed on a Facebook with the intent to promote products and services can have direct influence on users perception. People tend to find online advertising very informative and accurate, because it keeps them up-to-date about the marketplace and helps them make purchase decisions (Schlosser, Shavitt, & Kanfer, 1999). Being a fan of a company or brand on Facebook contributes to receiving up-to-date information about the company or brand. These arguments identified in previous studies show a positive attitude toward advertising posted on online social networks. Based on this theoretical argumentation the formulated hypothesis for this study was: H 0 (5): Informativeness does not have an influence on University students attitude toward advertising on Facebook. H 1 (5): Informativeness has an influence on University students attitude toward advertising on Facebook. It is obvious that with PCA, one of the four factors was dropped, three factors remained the same, only with a different set of variables and a new factor was added to the model and was further tested. Besides the fact that a hypothesis was added to this research, the research model was also adapted. Figure 7 depicts the revised model and table 16 shows the factors after PCA. The independent variable Advertising Avoidance of the initial model was dropped during PCA, therefore the second hypothesis became invalid for further analysis. 37

48 Independent variables Dependent variable Perceived Interactivity H1 Perceptions toward SNA Credibility Privacy H3 H4 Attitude toward advertising on Facebook Informativeness H5 Source: Own research, 2013 Figure 7: Revised research model Table 16: Factors after Principal Component Analysis FACTOR PC1: Perceived Interactivity PC2: Informativeness PC3: Credibility PC4: Privacy ITEM I will visit a product website after being exposed to an ad on Facebook (INT12). I will purchase a product advertised on Facebook (INT13). In my daily activities, I recognize brands as the ones that are advertised on Facebook (INT14). I can list the advertisements that I can remember seeing on Facebook (ADAV18) I am a fan of at least one company or brand on Facebook (ADAV22) Advertisements on Facebook provide accurate information about products/services (CRED23) Facebook advertising tells me which brands have the features I am looking for (CRED25). Facebook advertising keeps me up to date about products/services available in the marketplaces (CRED31). FACTOR LOADING Facebook advertising insults the intelligence of the average consumer (CRED24) There are too many exaggerations in Facebook advertisements (CRED26). Facebook advertising distorts the values of our youth (PRIV29). Advertisements on Facebook are intrusive (PRIV32) Users of Facebook will be forced to see the advertisement every time they log in (PRIV33). Source: calculations with survey data,