THE FACTORS OF SOCIAL MEDIA ADVERTISING AFFECTING CONSUMER BUYING DECISION.

• Author: Jeon, Sua

INTRODUCTION

Over the last two decades, social media has become one of the most powerful channels for customers to interact with brands and share their experiences with others when purchasing a product or service. The United States has one of the highest social media penetration rates in the world. In 2020, more than 223 million Americans used social media, and by 2025, the number of social media users in the U.S. is forecast to increase to approximately 243 million (Statista, 2021). This fact brought the firms to social media to market their product offerings. About 91.7% of U.S. marketers used social media for their marketing in 2020, and U.S. social media advertising spending was $48.12 billion in 2020 and is projected to reach $75.75 billion in 2025 (eMarketer, 2021). Among the social media platforms, Facebook has now been recognized as the most popular social media site in 2020, followed by YouTube and WhatsApp; Instagram has been ranked at five while Twitter is 16 (Clement, 2020).

As an increased number of consumers engage in social media on a daily basis, social media such as Facebook, Instagram, Twitter have gained worldwide popularity and transformed marketing channels from traditional to online, specifically in the advertising field (Ihsanuddin & Anur, 2016). Accordingly, marketers are continuously searching for more effective media for interacting and communicating with customers. Based on the study by Arora and Agarwal (2019), social media platforms play an essential role by providing companies a considerable space for advertisements that entice millions of people around the world. Most social media platforms use paid advertising, allowing companies to target specific demographics related to users' profiles (Milner, 2016). When using these platforms for advertising, companies are also able to monitor audience trends. In addition, social media sites are beneficial to businesses by allowing them to communicate with their audience and offer brand awareness directly.

Social media advertising creates an advantage for companies by offering specifically targeted ads towards their intended consumers; this allows their advertisements to reach exact audiences, offering a more promising return on investment. For consumers, social media advertising can be recognized in a variety of ways. Some consumers find advertisements on social media as a distraction, annoying, or in the way. Consumers also correlate a concern for their privacy relating to targeted advertisements on social media due to consumer data on social networks. In addition, other consumers find these ads very helpful and preferred over non-targeted advertisements because they realize that social media advertising is inevitable and can offer relevant suggestions when it comes to making a purchase.

Numerous studies investigated consumers' attitudes and motivations for shopping through social media sites (Godey et al., 2016). However, the topic of social media advertising is still an ever-evolving area (Zhang & Mao, 2016). Given the rapid growth of millennials' social media usage and their buying power, marketers need to understand the factors of targeted advertising associated with millennials' behaviors in social media. Therefore, this research aims to examine the aspects of targeted social media advertisements concerning the consumer's behavior. Specifically, this study identifies the dimensions of social media advertising values and scrutinizes the effects of social media advertising values, including privacy concerns, perceived relevance to consumers, personalization, and engagement capabilities on consumers' satisfaction and their purchase intention. It is essential to understand the consumer's purchase intention with social media advertisements to comprehend if the promotions are successful at doing the job, reaching the target market, and increasing sales.

LITERATURE REVIEW

Social media has grown in prominence over the last decade, and as it has risen, so has research into social media advertising. According to Hutter et al. (2013), firms use social media platforms for advertising their offerings and subsequently presenting a strong influence on consumers' decision-making process. Since social media allows advertisers to reach customers with more relevant advertising based on their digital profile, early research focused on if tailored advertising led to more effective advertising.

Social media advertising can be defined as an online ad that incorporates user interactions that the consumer has agreed to display and be shared. The resulting ad shows these interactions along with the user's persons (picture and name) within the ad content (Ertemel & Ammoura, 2016). There has been numerous research to date focusing on the impact of social media advertising on consumer behavior (Aguirre et al., 2015; Knoll, 2016; Voorveld et al., 2018; Walrave et al., 2018). In addition, both professional and academic literature indicates social media marketing efforts are particularly valuable as a tool for increasing brand engagement (Hanna et al., 2011; Walrave et al., 2018). Furthermore, Yaakop et al. (2013) found that attitudes towards social media advertising were positively correlated with perceived interactivity, privacy, and advertising avoidance. As various privacy scandals became public, increasing attention was placed on how companies use their data on consumers and their oversight on social media data. This naturally extended to the advertising field and how increasing consumer wariness affects privacy in digital platforms. The study by Jung (2017) examined the relationship between perceived ad relevance, ad attention, and ad avoidance related to privacy. The findings were that perceived ad relevance was positively related to ad attention but negatively correlated to advertising avoidance. Privacy, however, was positively associated with ad avoidance.

To understand the consumers' attitudes and behaviors towards the aforementioned social media advertising aspects, the research framework of this study is based on the Theory of Reasoned Action (TRA), also known as the Theory of Planned Behavior (Fishbein & Ajzen, 1975). This model suggests that different aspects have an impact on someone's decision-making process and purchase intention. Based on the extant literature review, this study explored the effects of personalization, privacy concerns, perceived ad relevance, and ad engagement on the dependent variables of satisfaction and intent to buy.

Personalization

Personalization refers to the ability of a firm to recognize and treat its customers as individuals through personal messaging, targeted banner ads, special offers, or other personal transactions (Imhoff et al., 2001, p. 467). Personalization implies that marketers send tailored advertising messages to the platform users based on user demographics, user preference, context, and content in the social media advertising context. This aims at making the advertisement more relevant so as not to disturb and annoy the consumers (Xu, 2006). This ties into self-efficacy theory, where people pay attention better to things that interest them personally. With the advent of social media, there is more personalization in...