UC Santa Cruz

Online Advertising on Social networks has become a very hot topic in both academia and industry, but very few studies have been conducted to examine the effectiveness of the advertising through or on social networks. In this paper, we provide an empirical framework to build advertising campaigns from target audience selections, landing page design, incentive design and advertising channel selections by promoting a new website Goodbuylist.com on Facebook to evaluate the advertising effectiveness and return on investment from the field experiments. Our study shows: (1) A well-defined target audience helps new business to save marketing budget and enhance advertising efficiency; (2) the principle of landing page design is to keep it simple and straightforward; and by introducing a team member introduction page, we were able to build website credibility which largely encouraged further user actions; (3) monetary incentives on average work better than non-monetary incentives to attract users; (4) Facebook Right Column Ads outperformed the other two News Feed ads channels in achieving lower CPA (Cost Per Action) but News Feed ads have much better CTR(Click Through Rate); (5) Females like the social shopping idea more than males and the ads targeting females outperformed in both CPA and CTR.