The advertising value of Twitter ads: a study among Mexican Millennials.
| Autor | Murillo, Enrique |
| Cargo | Texto en ingles - Ensayo |
1 Introduction
Despite being ranked among the top destinations on the Internet, Social Networking sites (SNS) often struggle to generate revenues commensurate to their large operating costs. Typical revenue models used by SNS are advertising, subscription and transaction (Enders, Hungenberg, Denker, & Mauch, 2008). Among them, the advertising model, which includes text and banner ads, affiliate ads, and sponsorships, is the most commonly used by SNS (Enders et ah, 2008; Nogueira-Cortimiglia, Ghezzi, & Renga, 2011). This model depends on a large user base, with monthly active users as the key metric, because most advertisers will require several million unique visitors to consider a particular SNS as a feasible option to invest their advertising budgets.
Twitter is among the most popular SNS; it claims 310 million monthly users, with 79% of them outside the US (Twitter, 2016). In Latin America, Brazil and Mexico have the largest number of users, expected to reach 27.7 and 23.5 million by 2016 (Emarketer, 2016a). Moreover, Twitter users in the region are mostly teenagers and young adults, which suggest Twitter advertising would be an attractive option for brands targeting Millennials.
However, companies have struggled to connect with the Millennial generation, because many of the traditional methods of advertising have proven ineffective at capturing their attention. Only 1 % of Millennials surveyed in a recent study said that a compelling advertisement would increase their trust in a brand. Millennials believe that advertising is all spin and not authentic (Schawbel, 2015).
Therefore, it is imperative to better understand the opinions and attitudes of young Latin American consumers toward Twitter ads. In particular, establishing to what extent factors such as the perceived Credibility of the ad, or the Irritation attached to it, affect users' attitudes toward Twitter advertising, and whether this should encourage or discourage brands from such practices. This study provides a clear empirical answer to these questions using the model of Advertising Value proposed by Ducoffe (1996). Our findings are thus relevant to global and regional brands targeting young consumers in Latin America.
2 Twitter Features and Ad Formats
The microblogging service Twitter was launched in 2006, and has grown to become one of the most popular SNS in the world. An independent forecast from Emarketer (2016b) estimated that worldwide active Twitter users, defined as those who enter their account at least monthly, will reach 291 million in 2016, with most of the growth coming from emerging markets.
Like other SNS, users can post status updates to their connections (called Followers in Twitter), and in turn can read the updates of the people or companies they are following. These posts were originally limited to 140 plain-text characters, thereby allowing the service to operate over mobile phone networks as SMS messages. This native ability to run both over the Internet and cell-phone networks greatly contributed to Twitter's rapid diffusion.
Companies and their brands soon discovered Twitter, and began using it to connect with their customers (Israel, 2009). In particular, airlines provide an early example of businesses using Twitter as an effective marketing platform. For instance, Mexican low cost carriers Volaris and VivaAerobus have been in a heated competition to achieve the greater social media presence since 2009, when they opened their Twitter sites. In two years, Volaris reached 88 thousand followers in Twitter versus 77 thousand for VivaAerobus (Reyes, 2011). Both airlines use the platform to announce promotional fares, and draw prospects to their website. Volaris also uses the platform to listen to its customers, who tend to be "extremely direct" when tweeting carriers (Cruz, 2010). Volaris thus learns about customer problems in real time, and can usually provide an answer or solution faster than a conventional call center.
Like most other SNS, Twitter provides its service free to users, and relies on an advertising revenue model (Enders et al., 2008). Twitter began paid advertising in 2010, and has seen its ad revenues grow steadily, particularly in the mobile platform which currently comprises 90% of ad revenues (Emarketer, 2016c). However, Twitter has been careful to protect its user experience, and to avoid overloading users with ads (Copeland, 2012). Ad clutter on Twitter is perceived as lower than other popular Internet platforms, such as Google Search or Facebook (Tassi, 2013).
The rapid growth of SNS advertising budgets is strong justification for researching consumer attitudes toward the ads they encounter on these platforms (Saxena & Khanna, 2013; Taylor, Lewin, & Strutton, 2011). Previous studies have examined advertising in SNS in general (Chandra, Goswami, & Chouhan, 2013; Saxena & Khanna, 2013; Taylor et al., 2011) or in Facebook, the current SNS leader (Dao, Le, Cheng, & Chen, 2014; Logan, Bright, & Gangadharbatla, 2012; Mendiz-Noguero, Victoria-Mas, & Arroyo-Almaraz, 2013). There are also numerous studies on the use of Twitter as a platform for engaging with consumers, in areas such as customer service (Coyle, Smith, & Platt, 2012; Sreenivasan, Lee, & Goh, 2012), brand engagement (Kwon & Sung, 2011; Li & Li, 2014; Logan, 2014; Sandoval-Almazan & Nava-Rogel, 2012), and electronic Word of Mouth (Jansen, Zhang, Sobel, & Chowdury, 2009; Kim, Sung, & Kang, 2014; Zhang Jansen, & Chowdhury, 2011). These studies fall under the rubric of engagement marketing, whereby companies publish branded content on their SNS, usually without any cost, in the hopes that their followers will engage with this content by "liking" it, adding a comment, or in the best of cases forwarding it to their own social contacts (Henry & Harte, 2012).
The other use of Twitter as a marketing platform is targeted advertising, whereby Twitter places "promoted" posts in front of selected users and charges advertisers according to the actions users take. However, tech-sawy Millennials may recognize these posts as paid advertising, and may react to them unfavorably (Schawbel, 2015). This is where Ducoffe (1996) robust model of Advertising Value can provide valuable insights, because it explicitly considers consumer irritation with ads as a predictor of perceived Advertising Value. However, a direct application of this model to Twitter ads has yet to be attempted. Given the growing popularity of Twitter in Latin America, and potential advertiser concerns about user irritation with ads, our study provides the first estimation of Advertising Value for Twitter ads in a Latin American context, with Spanish-translated scales.
Currently, there are three distinct formats of Twitter advertising (see Figure 1). First there are Promoted Tweets which are ordinary Tweets created by brands to spark engagement with users. Twitter proprietary algorithms will display them at the top of relevant search results on Twitter's search page, and on users' newsfeeds when the Tweet is deemed relevant to the search or to the user's interests. These Tweets are visibly labeled as Promoted, and Twitter charges the advertiser if the user clicks, favorites or retweets the Promoted tweet. Twitter does not give users the option to opt-out of seeing Promoted Tweets, but it does provide a Dismiss button the user can click on if he dislikes the ad (Twitter, 2014a). Twitter uses this negative reaction to refine its targeting of ads to that user as well as providing feedback to the advertiser.
Next, there are Promoted Accounts, which appear on the Who to Follow section of the user's homepage, again marked as Promoted. The Twitter algorithm analyzes the brand's followers and determines other brands those users tend to follow. When it detects a user that follows those brands, but not the advertiser's account, the algorithm recommends the advertiser's Promoted Account to that user (Twitter, 2014b). The advertiser pays for the number of new followers it gains.
Third, there are Promoted Trends, which appear at the top of the Trending Topics list on Twitter and are also labeled as Promoted. They are visible to all users of Twitter while they are being promoted (Twitte, 2014c).
With the exception of the "Promoted" label, these ad formats look just like as ordinary tweets, trends and suggested accounts. Therefore, they display natively in the Twitter desktop and mobile user interface, as well as the various Apps Twitter provides for all mobile operating systems: iPhone, Android, Blackberry, Windows, Symbian, etc. Given the growing importance of mobile advertising, this compatibility between desktop and mobile screens has become an important advantage for Twitter in the ongoing shift of digital advertising budgets toward mobile platforms (Emarketer, 2015; Koh, 2014).
3 Consumer Attitudes Toward SNS Advertising
The most commonly used theory to explain user perceptions and attitudes toward Internet advertising is the model of Advertising Value proposed by Ducoffe (1996) and later refined by Brackett and Carr (2001). In this model, the consumers' Advertising Value is defined as "a subjective evaluation of the relative worth or utility of advertising to consumers" (Ducoffe, 1995, p. 1). This evaluation is conceived as a thoughtful "cognitive assessment of the extent to which advertising gives consumers what they want" (Ducoffe, 1996, p. 24).
This model is based on the theory of media Uses and Gratifications (McQuail, 1983), which argues that media users expose themselves selectively to media based on their needs and gratification-seeking motives, and thus satisfy their utilitarian and/or hedonic needs. Accordingly, Ducoffe (1996) proposed Informativeness, Entertainment and Irritation as antecedents of Advertising Value, and proposed a positive association between Advertising Value and Attitude toward web advertising. Credibility was later included in the model as a fourth antecedent of...
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