BUSINESS-GENERATED SOCIAL MEDIA 1

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1 BUSINESS-GENERATED SOCIAL MEDIA 1 Business-Generated Social Media: The Effect on Young Adults Deanna Etzold Spring Hill College This paper was prepared for Communication Research 335, Section 01, taught by Dr. Sharee Broussard.

2 BUSINESS-GENERATED SOCIAL MEDIA 2 Abstract The goal of this research project is to find out the way in which young adults respond to business-generated social media. Social media has evolved over the years and businesses are reaching out to consumers through the various social networking sites. The study will specifically find out if young adults will report a purchase if business-generated social media offers incentives. This research project uses both qualitative and quantitative data to find out if social media has an impact on the purchasing power of young adults. Data was taken from scholarly journals, books, surveys, and data analyses. Using the theory of reasoned action, there are reasons that behaviors are intentional. This theory was also important in assisting with the hypothesis for this paper. The research collected helped to evaluate that if incentives are offered, young adults between the ages of 19 and 25 will report a purchase.

3 BUSINESS-GENERATED SOCIAL MEDIA 3 Introduction Social media is not just a way for individuals to communicate with one another. It is an opportunity for consumers to learn about various companies, establish relationships with brands, view products that are offered, and receive discounts. Social media can be defined as a consistently growing group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, a platform for information sharing, and that allows the creation and exchange of user generated content (Kaplan, 2010). The world is now being transformed by these new technologies, which has allowed businesses to strive for more customers and increase their profit. Over the last decade, social networks have changed communications from one-to-one to many-to-many, shifting the way we consume, produce and interact with information, based on explosive migration to the web (Kaplan, 2010). Young adults, ranging from the ages of 19 to 25, are surrounded by social media every day. These social media outlets include Facebook, Twitter, Instagram, LinkedIn, Pinterest and others. The theory of reasoned action believes that behavior is intentional suggesting that there are reasons for it. This theory can be described as a person s voluntary behavior that is predicted by the attitudes toward that behavior and how a person thinks other people would view them if they performed the behavior. The theory of reasoned action assumes that consumers perform a logical evaluation procedure for making decisions about behavior, based on attitude toward the behavior, which in turn derives from attitudes towards the product or brand (Blythe, 2008). Young adults are consumers that are targeted by businesses-generated social media and it is the consumers choice to react to that particular message in a cognitive way, an affective way, or a behavioral way.

4 BUSINESS-GENERATED SOCIAL MEDIA 4 Literature Review The Internet and Web have brought about significant changes in culture and business. The Internet plays a key role in the lives of millions of people in the United States (Cheong and Morison, 2008). It has become a necessity for people in the various aspects of their lives. People read magazines and newspapers online, locate information easily, manage their bank accounts, monitor the lives of others and develop networking and social media sites that create a connection with the rest of the world. The users of the Internet have become consumers engaged in the way brands are presented to them. The current driving forces of Web 2.0 and social media vehicles have led to a world where consumers are more connected and are playing a prominent role in defining brands and influencing the reputations of organizations (Pooja, 2012). Because of these driving forces, companies invest millions of dollars in social media to influence consumers to favor their brands or buy their products (Divol and Edelman, 2012, p.1). According to Tocci (2007) new media and social media have evolved the way we communicate. Businesses need to be aware of these changes, accept them and start using electronic media to thrive in the future because consumers have already tuned into the Internet as their go to source. Social media consists of a set of applications that are built to run on a Web 2.0 platform which enables the creation and distribution of information created by users (Pooja, 2012). The users of social media are consistently growing and developing with the creation of new networking sites. Of the youth that use social networking sites, 60% of teenagers and 67% of young adults visit them every day or more (Li, 2007). Even as organizations are in the beginning stages of learning how to effectively use social media to reach consumers, it has become popular among consumers. Social media has an impact on purchase. Consumers who

5 BUSINESS-GENERATED SOCIAL MEDIA 5 are a fan of a brand on Twitter, are more likely to react and buy that brand (Pooja, 2012). Social media messages effect the consumers of brands but it is also advertising that has been successful. Companies are trying to make Facebook pages and Twitter accounts to gain brand awareness. Social media has a positive effect on the amount of impact there is on purchase behavior (Pooja, 2012, p.1). The effectiveness of a persuasive communication is a function of the extent to which its content is learned and maintained by its audience. The essential criterion of effectiveness is acceptance of content (Greenwald, 1968). Through the theory of reasoned action, people experience normative beliefs, which are the perceptions about what others in a social network expect another person to do. When a person receives a communication and is faced with the decision of accepting or rejecting the persuasion, he or she may be expected to attempt to relate the new information to his or her existing attitudes, knowledge or feelings (Greenwald, 1968). According to the Facebook statistics, Facebook has one billion monthly active users as of October Approximately 81% of the monthly active users are outside the United States and Canada. Facebook received 584 million daily active users on average in September There were also 604 million monthly active users who used Facebook mobile products as of September 30, 2012 (2012). Facebook is continuing to lead as the largest social networking site. If Facebook users constituted a country, it would be the world s largest, behind China and India (Divol and Edelman, 2012). The two potential audiences for branded content on Facebook include the fans of brands on Facebook and the friends of fans, which is a much larger set of consumers. As a brand seeks to raise awareness among its fans, it can benefit from the exposure among friends of fans that witness the brand while on Facebook. This popular and growing

6 BUSINESS-GENERATED SOCIAL MEDIA 6 social networking site allows for consumers to identify brands of interest and connect with them creating a two-way relationship that can allow for sharing of content, news and feedback. Facebook has also allowed for innovative ways of sharing information about brands to friends so that their purchasing power grows and they react to the businesses offers. Brands increasingly are interested in establishing a social presence and engaging with their fans, which helps to shape their customers experiences, and even leverage their voices for a greater marketing impact (Lipsman and Mudd, 2012). Tweeting, hashtags, reposts and direct messages all sound like a foreign language to many people, but young adults from the ages of years old are the savvy Twitter marketing folks (Tocci, 2007). Millennials are consumers who were born into a world of digital technologies. To succeed in gaining consumers from the members of this group, Hardey affirms that companies need to actively embrace consumer expectations, which will build consumer loyalty and product innovation (2011). Different companies need to think about new media because young adults of today are the customers and employees of tomorrow. The new media from businesses will also affect where young consumers make purchases and choose to shop. Twitter, launched in 2006, is a microblogging service where users send updates also known as tweets to a network of associates which are also known as followers (Jansen and Zhang, 2009). As the largest microblogging service, Twitter s user base has grown, and has attracted the attention of corporations and others interested in customer behavior and service. Twitter s growth rate is substantial, with several million users as of As the largest, most well-known, and most popular of the microblogging sites, Twitter is a source for consumers to react towards the business generated blogging because of its electronic word of mouth feature (Jansen and Zhang, p. 2169).

7 BUSINESS-GENERATED SOCIAL MEDIA 7 Traditional measures of the effectiveness of marketing communications focus on measuring the achievement of the marketer s objectives following a specific process by which the marketer takes actions and consumers respond (Stewart and Pavlou, 2002). Social media is a unique component of the consumer decision-making that affects their purchasing power. It is the only form of marketing that can touch consumers at each and every stage from when they are pondering brands and products right through the period after a purchase when their potential of advocacy influences others (Divol and Edelman, 2012, p.3). Through the consumer decision journey, companies need to create a buzz, like creating campaigns that attract a large number of people. This will allow for non-customers to be a part of the buzz and eventually react by buying the product. Ford created a large marketing campaign called the Fiesta Movement. A major element involved giving 100 social media influencers a European model of the car, having them complete missions and documenting their experiences on various social channels. There were 6.5 million viewers of these videos on YouTube, and Ford received 50,000 requests for information about the vehicles, mostly from non-ford drivers. When it finally became available to the public, some 10,000 cars sold in the first six days (Divol and Edelman, 2012). It had been thought for a while that social networks had very little impact on individual s inclination to participate in politics. According to research by Bridges, Appel and Grossklags, there is a tendency for those that have engaged with others in a political nature to become more politically inclined and extend their knowledge past their personal resource constraints (2012, p.165). About two thirds of Internet using teens consume online news about current events and

8 BUSINESS-GENERATED SOCIAL MEDIA 8 politics. Older teens are more likely to visit sites for news or political information (Lenhart, Purcell and Smith, 2012). Youth who are engaged with the Internet exhibit tendencies of political involvement and show an increase in exposure to political ideas divergent of their own (Bridges, p.165). Social media has become a means for political organization and activism because it has gone international. Diverse research projects in Australia, Turkey, Italy, Mexico, and Norway are showing the same results as the United States- that there is a correlation between the use of social media applications which has led to an increase in political participation by their citizens, especially notable by the youth (Bridges, p.165). If business-generated social media includes an incentive, then a majority of young adults will report a purchase.

9 BUSINESS-GENERATED SOCIAL MEDIA 9 Methodology The survey was distributed to a convenience sample of 56 participants. The surveys were distributed on the Spring Hill College campus to students ranging from ages 19 to 25. All surveys that were distributed were exactly the same and were handed out in various classes and in the cafeteria. All participants were told to answer honestly and anonymously. The instructions to each survey were described at the top of the page. The survey was separated into two sections. The first section consisted of 11 scale questions, which asked the participant about their actions on social media sites. The scale questions six through nine point to the hypothesis, which provides information about incentives and the consumers response to incentives. Participants were asked to respond to each question in the first section on a five point Likert scale. Five represented the highest level of agreement (strongly agree) and one represented the lowest level of agreement (strongly disagree). The second section consisted of two ordinal questions and four nominal questions. The second section was provided to grasp more personal information such as age, class level, sex, and involvement in social media. After each survey was distributed, the results attained were entered into the SPSS Statistics 17.0 software. Once the information was entered, the frequencies were analyzed. The numbers were also tested to see if the Cronbach s alpha coefficient was achieved. Cross tabs were run between two scale questions in order to compare a company s use of incentives for consumers and the consumers use of coupons that are offered.

10 BUSINESS-GENERATED SOCIAL MEDIA 10 Data Analysis The surveys were distributed as a convenience sample and the results cannot be applied to a population. The age levels of participants, ranging from 19 to 25, showed a frequency of 35 participants that were either 19 or 20 years old. There were 20 participants that were between the ages of 21 and 22 and one participant between the ages of 23 and 24. The highest number of participants were from the junior class which was 25, a total of nine more than sophomore grade level. A total of 56 surveys were completed by 41 females and 15 males. In order to see how often those surveyed chose a specific answer, frequency tests were run on all 17 questions. Some responses supported the hypothesis. Of those surveyed, 53.6 percent believed that if a product is discounted, a purchase will more than likely take place and 44.6 percent believed that if a company offers incentives, the need to buy products will increase. Participants that disagreed with the company offering incentives were 5.4 percent, a difference of 39.2 percent. Based on the participant s responses, it was interesting to observe that 75 percent of young adults believe that Facebook is the social media site that has the most influence on consumers to buy products. All scale questions were analyzed and question seven had a standard deviation of.603 with its minimum at three and maximum at five. This low standard deviation shows that there is less variability in responses to this question. A crosstab was run between the scale question eight and the nominal question of gender. The crosstab resulted in an Asymp. Sig. (2-sided) of.565, a much larger number than.05. Question eight on the survey points to the consumers purchasing products if a company offers incentives, and a total of 17 females out of 41, agreed with the statement. From the male standpoint, eight out of the 15 agreed that more products would be bought if incentives were

11 BUSINESS-GENERATED SOCIAL MEDIA 11 offered. Because the crosstab resulted in a larger number, it seems to describe that there is no mathematical connection between gender and the response to buying products if a company offers incentives. A reliability analysis was run on questions six, seven, eight, nine and eleven. The Cronbach s alpha coefficient is.599, which shows that the scales within the instrument do not exhibit internal consistency reliability.

12 BUSINESS-GENERATED SOCIAL MEDIA 12 Conclusion The pilot study conducted for this research paper seems to be very informative. Though the group to which the surveys were distributed to was not large, it still offered sufficient information about specific age groups of young adults. Many of the young adults seem to be very involved with the various social networking sites and consider these sights to have an impact on their purchasing power as consumers. The hypothesis seems to be supported because it infers that if a company offers incentives through social media, then a majority of young adults will report a purchase. From the 56 surveys that were completed, 25 participants agreed and 21 strongly agreed that if incentives were offered, more purchases would take place. The research conducted showed that social media is continuing to grow around the world and if a company wants to sell products, incentives are beneficial for attracting consumers. A few aspects could be changed to make this study work better in the future. If this study was attempted again, the researcher should reach out to a greater number of males to complete the survey to show a larger variety in the results. The surveys were distributed as a convenience sample, which resulted in more females completing the survey then males. The sample group should also be opened up in terms of age. The study was to show young adults between the ages of 19 and 25 years old, but only one participant was between the age of 23 and 24. There were no participants that were 25 years old. Young adults, especially college students, are constantly on the Internet and through the survey conducted, 82 percent of young adults check Facebook more than two times a day and 60 percent check Twitter more than two times a day. Business-generated social media has effected

13 BUSINESS-GENERATED SOCIAL MEDIA 13 consumer behavior because it is easier for a company to show their products through the various forms of social networking sites.

14 BUSINESS-GENERATED SOCIAL MEDIA 14 References Blythe, J. (2008). Consumer behaviour. (p. 146). London, England: Thomson Learning. Bridges, F., Appel, L., & Grossklags, J. (2012). Young adults' online participation behaviors: An exploratory study of web 2.0 use for political engagement. Information sciences and technology, Retrieved from Cheong, H., & Morrison, M. (2008). Consumers' reliance on product information and recommendations found in user-generated content. Interactive advertising, 8(2), Retrieved from Divol, R., & Edelman, D. (2012). Demystifying social media. McKinsey quarterly, 1(2), Retrieved from Facebook. (2012). Facebook: Statistics and key facts. Retrieved from Greenwald, A. (1968). Cognitive learning, cognitive response to persuasion, and attitude change. New York, NY: Academic Press Inc. Hardey, M. (2011). Generation C. Marketing research, 53(6), Retrieved from Jansen, B., & Zhang, M. (2009). Twitter power: Tweets as electronic word of mouth. American Society for Information Science and Technology, Retrieved from Kaplan, A.M Business horizons. Users of the world, unite. The challenges and opportunites of social media. Retrieved from Lenhart, A., Purcell, K., & Smith, A. (2010). Social media and mobile internet use among teens and young adults. Pew Research Center, Retrieved from Li, C. (2007). How consumers use social media networks. Making leaders successful everyday, Retrieved from Lipsman, A., & Mudd, G. (2012). The power of like: How brands reach fans through social media marketing. Advertising research, Retrieved from

15 BUSINESS-GENERATED SOCIAL MEDIA 15 Pooja, M. (2012). The impact of social media usage on consumer buying behavior. Advances in Management, 5(1), Retrieved from Stewart, D., & Pavlou, P. (2002). From consumer response to active consumer: Measuring the effectiveness of interactive media. Journal of the Academy of Marketing Science, 30(4), Retrieved from Tocci, D. (2007). No reason to Twitter? There is, if you want to reach teens. Bicycle retailer and Industry news, 16(10), Retrieved from

16 BUSINESS-GENERATED SOCIAL MEDIA 16 Appendix A: Survey

17 BUSINESS-GENERATED SOCIAL MEDIA 17 Appendix B: SPSS 17.0 Printouts