Advertising on Social Network Sites: A Structural Equation Modelling Approach

Abstract

Social networking sites (SNSs) emerged as one of the most powerful media for advertising across the globe. Globally, companies are shifting a larger pie of their advertising budgets towards social networking sites for better reach and interactive platform. The companies are also looking at it as a low-cost model, which could reap results in minimum time possible for the targeted ‘Facebook generation’. These very facts motivate researchers to study the value of advertisements on social networking sites like Facebook, LinkedIn, Twitter and others. The article is an empirical study to understand the implications of different variables in advertisements on the delivery of advertising value to the respondents. Confirmatory factor analysis (CFA) has been conducted to test the reliability of instrument being used for data collection. Further, a model has been proposed for measuring advertising value through structural equation modelling. The predicted results confirm the roles of different variables, namely, information, entertainment and irritation, in accessing value of advertisements displayed on social networking sites.