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Social media's influence in purchase decisions


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  • 1. Social Media’s Influence in Purchasing Decisions at USA Chapter 1Introduction to the studyThe social networking sites are gaining a lot of popularity these days with almost all ofthe educate people using one or the other such site. These have played a crucial role inbridging boundaries and crossing the seas and enabling them to communicate on acommon platform. It has become a popular and a potential mean for them to stayfriends with the existing ones and to grow up their social circle at least in terms ofacquaintances.The question regarding the safety, privacy and the legal issues have been cropping up allthis time. The objective of this research is to find out the impact of these networkingsites on the purchasing decision of people using them. It is a very subjective question toanswer and is very opinion based and the same is reflected in the research methodologyadopted.The report is initiated with the definition of the objective followed with the researchmethodology used along with the research design, sample size, methods used for thepurpose of conducting survey. It also incorporates the sampling frame and the datacollection procedure.Subsequent to this is the Introduction to the networking sites along with a briefdescription of the most popular sites. Then the issues of concern which have come upalong the way in all these years since these sites gained popularity are discussed. Thevarious issues and concerns of the respondents are also incorporated there. The nextpart of the research has the literature surveys which are the articles I took up from thepublished reports. Then I analyzed and interpreted the data at length. The last part dealswith the suggestions and recommendations that has come up with after carefullyanalyzing and incorporating the opinion of all concerned.Social media are media for social interaction, using highly accessible and scalablecommunication techniques. Social media is the use of web-based and mobiletechnologies to turn communication into interactive dialogue.Andreas Kaplan and Michael Heinlein define social media as "a group of Internet-basedapplications that build on the ideological and technological foundations of Web 2.0, whichallows the creation and exchange of user-generated content."Businesses may also referto social media as consumer-generated media (CGM). A common thread running throughall definitions of social media is a blending of technology and social interaction for theco-creation of value. Page 1
  • 2. Social Media’s Influence in Purchasing Decisions at USAPeople obtain information, education, news and other data from electronic media andprint media. Social media are distinct from industrial or traditional media, such asnewspapers, television, and film. They are relatively inexpensive and accessible toenable anyone (even private individuals) to publish or access information, compared toindustrial media, which generally require significant resources to publish information.Social media are widely used in marketing of products and services. One of the keycomponents in successful social media marketing implementation is building "socialauthority". Social authority is developed when an individual or organization establishesthemselves as an "expert" in their given field or area, thereby becoming an influencer inthat field or area.It is through this process of "building social authority" that social media becomeseffective. That is why one of the foundational concepts in social media has become thatyou cannot completely control your message through social media but rather you cansimply begin to participate in the "conversation" in the hopes that you can become arelevant influence in that conversation.However, this conversation participation must be cleverly executed because while peopleare resistant to marketing in general, they are even more resistant to direct or overtmarketing through social media platforms. This may seem counter-intuitive but is themain reason building social authority with credibility is so important. Thus, using socialmedia as a form of marketing has taken on whole new challenges. Someone performinga "marketing" role within a company must honestly convince people of their genuineintentions, knowledge, and expertise in a specific area or industry through providingvaluable and accurate information on an ongoing basis without a marketing angle overtlyassociated. If this can be done, trust with, and of, the recipient of that information – andthat message itself – begins to develop naturally. This person or organization becomes athought leader and value provider - setting themselves up as a trusted "advisor" insteadof marketer.As a result of social media – and the direct or indirect influence of social mediamarketers – today, consumers are as likely – or more likely – to make buying decisionsbased on what they read and see in platforms we call "social" but only if presented bysomeone they have come to trust. Additionally, reports have shown organizations havebeen able to bring back dissatisfied customers and stakeholders through social mediachannels. This is why a purposeful and carefully designed social media strategy hasbecome an integral part of any complete and directed marketing plan but must also bedesigned using newer "authority building" techniques. Page 2
  • 3. Social Media’s Influence in Purchasing Decisions at USASocial networking websites function like an online community of internet users.Depending on the website in question, many of these online community members sharecommon interests in hobbies, religion, or politics. Once you are granted access to asocial networking website you can begin to socialize. This socialization may includereading the profile pages of other members and possibly even contacting them.The friends that you can make are just one of the many benefits to social networkingonline. Another one of those benefits includes diversity because the internet givesindividuals from all around the world access to social networking sites. This means thatalthough you are in the United States, you could develop an online friendship withsomeone in Denmark or India. Not only will you make new friends, but you just mightlearn a thing or two about new cultures or new languages and learning is always a goodthing.Since their introduction, social network sites (SNSs) such as MySpace, Facebook,Cyworld, and Bebo have attracted millions of users, many of whom have integratedthese sites into their daily practices. As of this writing, there are hundreds of SNSs, withvarious technological affordances, supporting a wide range of interests and practices.While their key technological features are fairly consistent, the cultures that emergearound SNSs are varied. Most sites support the maintenance of pre-existing socialnetworks, but others help strangers connect based on shared interests, political views,or activities. Some sites cater to diverse audiences, while others attract people based oncommon language or shared racial, sexual, religious, or nationality-based identities.Sites also vary in the extent to which they incorporate new information andcommunication tools, such as mobile connectivity, blogging, and photo/video-sharing.Scholars from disparate fields have examined SNSs in order to understand the practices,implications, culture, and meaning of the sites, as well as users engagement with them.This special theme section of the Journal of Computer-Mediated Communication bringstogether a unique collection of articles that analyze a wide spectrum of social networksites using various methodological techniques, theoretical traditions, and analyticapproaches. By collecting these articles in this issue, our goal is to showcase some of theinterdisciplinary scholarship around these sites.One of the most important parts of social media marketing research is that it opens upthe door to communication with your current and prospective customers. This gives youan unequalled opportunity to form a relationship with them, understand them, andensure that they understand you. Social media marketing research means that you canhave a conversation with precisely the individuals who are buying your products orservices, or who are currently looking for what you have to offer. With thiscommunication, you can answer questions and, in doing so, not only educate your Page 3
  • 4. Social Media’s Influence in Purchasing Decisions at USAcustomers but also find out what they want to know about your business. This helps youto improve your marketing so that it provides improved information within its message. Page 4
  • 5. Social Media’s Influence in Purchasing Decisions at USASocial Media MarketingSocial media marketing is a recent addition to organizations’ integrated marketingcommunications plans. Integrated marketing communications is a practice organizationsfollow to connect with their target markets. Integrated marketing communicationscoordinates promotional elements: advertising, personal selling, public relations,publicity, direct marketing and sales promotion. Increasingly, viral marketing campaignsare also grouped into integrated marketing communications. In the traditional marketingcommunications model, the content, frequency, timing, and medium of communicationsby the organization is in collaboration with an external agent, i.e. advertising agencies,marketing research firms and public relations firms. However, the growth of social mediahas impacted the way organizations communicate. With the emergence of Web 2.0, theinternet provides a set of tools that allow people to build social and businessconnections, share information and collaborate on projects online.Social media marketing programs usually centre on efforts to create content that attractsattention and encourages readers to share it with their social networks. A corporatemessage spreads from user to user and presumably resonates because it is coming froma trusted, third-party source, as opposed to the brand or company itself.Social media has become a platform that is easily accessible to anyone with internetaccess. Increased communication for organizations fosters brand awareness and often,improved customer service. Additionally, social media serves as a relatively inexpensiveplatform for organizations to implement marketing campaigns. With emergence ofchannels like Twitter, the barrier to entry in social media is greatly reduced.Social media marketing is known as SMO or Social Media Optimization and benefitsorganizations and individuals by providing an additional channel for customer support, ameans to gain customer and competitive insight, recruitment and retention of newcustomers/business partners, and a method of managing reputation online. Key factorsthat ensure its success are its relevance to the customer, the value it provides them withand the strength of the foundation on which it is built. A strong foundation serves as aplatform in which the organization can centralize its information and direct customers onits recent developments via other social media channels, such as article and pressrelease publications. Oftentimes, corporate social media platforms are used to offerunique incentives to customers who are willing to engage (i.e. "like" a Facebook Page). Page 5
  • 6. Social Media’s Influence in Purchasing Decisions at USASocial Networking Sites:Social network sites can be defined as web-based services that allow individuals to:1. Construct a public or semi-public profile within a bounded system,2. Articulate a list of other users with whom they share a connection, and3. View and traverse their list of connections and those made by others within thesystem.The nature and nomenclature of these connections may vary from site to site. While weuse the term "social network site" to describe this phenomenon, the term "socialnetworking sites" also appears in public discourse, and the two terms are often usedinterchangeably. "Networking" emphasizes relationship initiation, often betweenstrangers. While networking is possible on these sites, it is not the primary practice onmany of them, nor is it what differentiates them from other forms of computer-mediatedcommunication (CMC).What makes social network sites unique is not that they allow individuals to meetstrangers, but rather that they enable users to articulate and make visible their socialnetworks. This can result in connections between individuals that would not otherwise bemade, but that is often not the goal, and these meetings are frequently between "latentties" who share some offline connection. On many of the large SNSs, participants are notnecessarily "networking" or looking to meet new people; instead, they are primarilycommunicating with people who are already a part of their extended social network. Toemphasize this articulated social network as a critical organizing feature of these sites, Ilabel them "social network sites (SNS)."While we use the term "social network site" to describe this phenomenon, the term"social networking sites" also appears in public discourse, and the two terms are oftenused interchangeably. We chose not to employ the term "networking" for two reasons:emphasis and scope. "Networking" emphasizes relationship initiation, often betweenstrangers. While networking is possible on these sites, it is not the primary practice onmany of them, nor is it what differentiates them from other forms of computer-mediatedcommunication (CMC).What makes social network sites unique is not that they allow individuals to meetstrangers, but rather that they enable users to articulate and make visible their socialnetworks. This can result in connections between individuals that would not otherwise bemade, but that is often not the goal, and these meetings are frequently between "latentties" (Haythornthwaite, 2005) who share some offline connection. On many of the large Page 6
  • 7. Social Media’s Influence in Purchasing Decisions at USASNSs, participants are not necessarily "networking" or looking to meet new people;instead, they are primarily communicating with people who are already a part of theirextended social network. To emphasize this articulated social network as a criticalorganizing feature of these sites, we label them "social network sites."While SNSs have implemented a wide variety of technical features, their backboneconsists of visible profiles that display an articulated list of Friends 1 who are also users ofthe system. Profiles are unique pages where one can "type oneself into being" (Sundén,2003, p. 3). After joining an SNS, an individual is asked to fill out forms containing aseries of questions. The profile is generated using the answers to these questions, whichtypically include descriptors such as age, location, interests, and an "about me" section.Most sites also encourage users to upload a profile photo. Some sites allow users toenhance their profiles by adding multimedia content or modifying their profiles look andfeel. Others, such as Facebook, allow users to add modules ("Applications") that enhancetheir profile.The visibility of a profile varies by site and according to user discretion. By default,profiles on Friendster and are crawled by search engines, making them visibleto anyone, regardless of whether or not the viewer has an account. Alternatively,LinkedIn controls what a viewer may see based on whether she or he has a paidaccount. Sites like MySpace allow users to choose whether they want their profile to bepublic or "Friends only." Facebook takes a different approach—by default, users who arepart of the same "network" can view each others profiles, unless a profile owner hasdecided to deny permission to those in their network. Structural variations aroundvisibility and access are one of the primary ways that SNSs differentiate themselves fromeach other.After joining a social network site, users are prompted to identify others in the systemwith whom they have a relationship. The label for these relationships differs dependingon the site—popular terms include "Friends," "Contacts," and "Fans." Most SNSs requirebi-directional confirmation for Friendship, but some do not. These one-directional ties aresometimes labeled as "Fans" or "Followers," but many sites call these Friends as well.The term "Friends" can be misleading, because the connection does not necessarilymean friendship in the everyday vernacular sense, and the reasons people connect arevaried (boyd, 2006a).The public display of connections is a crucial component of SNSs. The Friends listcontains links to each Friends profile, enabling viewers to traverse the network graph byclicking through the Friends lists. On most sites, the list of Friends is visible to anyonewho is permitted to view the profile, although there are exceptions. For instance, some Page 7
  • 8. Social Media’s Influence in Purchasing Decisions at USAMySpace users have hacked their profiles to hide the Friends display, and LinkedInallows users to opt out of displaying their network.Most SNSs also provide a mechanism for users to leave messages on their Friendsprofiles. This feature typically involves leaving "comments," although sites employvarious labels for this feature. In addition, SNSs often have a private messaging featuresimilar to webmail. While both private messages and comments are popular on most ofthe major SNSs, they are not universally available.Not all social network sites began as such. QQ started as a Chinese instant messagingservice, LunarStorm as a community site, Cyworld as a Korean discussion forum tool,and Skyrock (formerly Skyblog) was a French blogging service before adding SNSfeatures., a directory of school affiliates launched in 1995, begansupporting articulated lists of Friends after SNSs became popular. AsianAvenue,MiGente, and BlackPlanet were early popular ethnic community sites with limited Friendsfunctionality before re-launching in 2005-2006 with SNS features and structure.Beyond profiles, Friends, comments, and private messaging, SNSs vary greatly in theirfeatures and user base. Some have photo-sharing or video-sharing capabilities; othershave built-in blogging and instant messaging technology. There are mobile-specific SNSs(e.g., Dodgeball), but some web-based SNSs also support limited mobile interactions(e.g., Facebook, MySpace, and Cyworld). Many SNSs target people from specificgeographical regions or linguistic groups, although this does not always determine thesites constituency. Orkut, for example, was launched in the United States with anEnglish-only interface, but Portuguese-speaking Brazilians quickly became the dominantuser group (Kopytoff, 2004). Some sites are designed with specific ethnic, religious,sexual orientation, political, or other identity-driven categories in mind. There are evenSNSs for dogs (Dogster) and cats (Catster), although their owners must manage theirprofiles.While SNSs are often designed to be widely accessible, many attract homogeneouspopulations initially, so it is not uncommon to find groups using sites to segregatethemselves by nationality, age, educational level, or other factors that typically segmentsociety (Hargittai, this issue), even if that was not the intention of the designers. Page 8
  • 9. Social Media’s Influence in Purchasing Decisions at USAA History of Social Network SitesThe Early YearsAccording to the definition above, the first recognizable social network site launched in1997. allowed users to create profiles, list their Friends and, beginningin 1998, surf the Friends lists. Each of these features existed in some form beforeSixDegrees, of course. Profiles existed on most major dating sites and many communitysites. AIM and ICQ buddy lists supported lists of Friends, although those Friends werenot visible to others. allowed people to affiliate with their high school orcollege and surf the network for others who were also affiliated, but users could notcreate profiles or list Friends until years later. SixDegrees was the first to combine thesefeatures.SixDegrees promoted itself as a tool to help people connect with and send messages toothers. While SixDegrees attracted millions of users, it failed to become a sustainablebusiness and, in 2000, the service closed. Looking back, its founder believes thatSixDegrees was simply ahead of its time (A. Weinreich, personal communication, July11, 2007). While people were already flocking to the Internet, most did not haveextended networks of friends who were online. Early adopters complained that there waslittle to do after accepting Friend requests, and most users were not interested inmeeting strangers.From 1997 to 2001, a number of community tools began supporting variouscombinations of profiles and publicly articulated Friends. AsianAvenue, BlackPlanet, andMiGente allowed users to create personal, professional, and dating profiles—users couldidentify Friends on their personal profiles without seeking approval for those connections(O. Wasow, personal communication, August 16, 2007). Likewise, shortly after its launchin 1999, LiveJournal listed one-directional connections on user pages. LiveJournalscreator suspects that he fashioned these Friends after instant messaging buddy lists (B.Fitzpatrick, personal communication, June 15, 2007)—on LiveJournal, people markothers as Friends to follow their journals and manage privacy settings. The Koreanvirtual worlds site Cyworld was started in 1999 and added SNS features in 2001,independent of these other sites (see Kim & Yun, this issue). Likewise, when the Swedishweb community LunarStorm refashioned itself as an SNS in 2000, it contained Friendslists, guestbooks, and diary pages (D. Skog, personal communication, September 24,2007).The next wave of SNSs began when was launched in 2001 to help peopleleverage their business networks. Ryzes founder reports that he first introduced the siteto his friends—primarily members of the San Francisco business and technology Page 9
  • 10. Social Media’s Influence in Purchasing Decisions at USAcommunity, including the entrepreneurs and investors behind many future SNSs (A.Scott, personal communication, June 14, 2007). In particular, the people behind Ryze,, LinkedIn, and Friendster were tightly entwined personally and professionally.They believed that they could support each other without competing (Festa, 2003). Inthe end, Ryze never acquired mass popularity, grew to attract a passionateniche user base, LinkedIn became a powerful business service, and Friendster becamethe most significant, if only as "one of the biggest disappointments in Internet history"(Chafkin, 2007, p. 1). Page 10
  • 11. Social Media’s Influence in Purchasing Decisions at USAFigure 1: Timeline of the launch dates of many major SNSs and dates when communitysites re-launched with SNS featuresLike any brief history of a major phenomenon, ours is necessarily incomplete. In thefollowing section we discuss Friendster, MySpace, and Facebook, three key SNSs thatshaped the business, cultural, and research landscape. Page 11
  • 12. Social Media’s Influence in Purchasing Decisions at USAWhy Social Networking?Through social networking, people can use networks of online friends and groupmemberships to keep in touch with current friends, reconnect with old friends or createreal–life friendships through similar interests or groups. Besides establishing importantsocial relationships, social networking members can share their interests with other like–minded members by joining groups and forums. Some networking can also helpmembers find a job or establish business contacts.Most social networking websites also offer additional features. In addition to blogs andforums, members can express themselves by designing their profile page to reflect theirpersonality. The most popular extra features include music and video sections. Memberscan read bios of their favourite music artists from the artists profile page as well aslisten to their favourite songs and watch music videos. The video section can includeeverything from member–generated videos from hundreds of subjects to TV clips andmovie trailers.What to Look for in Social Networking?The phenomenon of online social networking—made extremely popular by,as evolved to include more than the teenage stereotype looking to expand his/hernetwork of online friends. People of all ages and backgrounds have discovered that theycan enrich their lives through the contacts they make on a social networking website.Below are the criteria TopTenREVIEWS used to evaluate Social Networking websites.ProfilesThe heart and soul of social networking sites are user’s personal profiles. It’s like theirown Internet sanctuary, a place where they can express their thoughts and feelings,post photographs and show off their network of friends. The most popular social networkwebsites put a strong emphasis on the user’s profile, making it easy to use yet stillreflective of the user’s personality. Page 12
  • 13. Social Media’s Influence in Purchasing Decisions at USASecurityThe Internet can be a dangerous place to post personal information. All social networksshould provide the ability to set profiles to private in some way or another. Additionallythey should have the ability to report and block users.Networking FeaturesA good social network goes above and beyond just allowing users to post profiles andupdate pictures. Additional features should include music sections, video uploads, groupsand more.SearchThe object of a social network is to find friends and expand relationships. Top socialnetworking websites allows members to search for other members in a safe and easy touse environment. Common search functions include search by name, city, school andemail address.Help/SupportMost social network sites are self-explanatory. However, in the off-chance a user needshelp there needs to be some way to contact the webmaster or answers in an FAQssection.Legitimate Friend FocusThe growing trend for social networks is to communicate and keep in touch with peopleyou already know. No one wants to be inundated with unsolicited spam friend requests.The best social network sites keep profiles and search options private enough that theonly people that can find you are the ones actually looking for users in their own schoolor neighbourhood networks. Even with a completely public profile, users shouldn’t bebothered with more than a couple of unsolicited comments or messages. Page 13
  • 14. Social Media’s Influence in Purchasing Decisions at USAHOW DOES ‘SNS’ WORKWhile SNSs have implemented a wide variety of technical features, their backboneconsists of visible profiles that display an articulated list of Friends who are also users ofthe system. Profiles are unique pages where one can type oneself into being. Afterjoining an SNS, an individual is asked to fill out forms containing a series of questions.The profile is generated using the answers to these questions, which typically includedescriptors such as age, location, interests, and an "about me" section. Most sites alsoencourage users to upload a profile photo. Some sites allow users to enhance theirprofiles by adding multimedia content or modifying their profiles look and feel. Others,such as Face book, allow users to add modules ("Applications") that enhance theirprofile.The visibility of a profile varies by site and according to user discretion. By default,profiles on Orkut or are crawled by search engines, making them visible toanyone, regardless of whether or not the viewer has an account. Alternatively, sites likeMySpace allow users to choose whether they want their profile to be public or "Friendsonly." Face book takes a different approach—by default, users who are part of the same"network" can view each others profiles, unless a profile owner has decided to denypermission to those in their network. Structural variations around visibility and accessare one of the primary ways that SNSs differentiate themselves from each other.After joining a social network site, users are prompted to identify others in the systemwith whom they have a relationship. The label for these relationships differs dependingon the site popular terms include "Friends," "Contacts," and "Fans." Most SNSs requirebi-directional confirmation for Friendship, but some do not. These one-directional ties aresometimes labelled as "Fans" or "Followers," but many sites call these Friends as well.The term "Friends" can be misleading, because the connection does not necessarilymean friendship in the everyday vernacular sense, and the reasons people connect arevaried.The public display of connections is a crucial component of SNSs. The Friends listcontains links to each Friends profile, enabling viewers to traverse the network graph byclicking through the Friends lists. On most sites, the list of Friends is visible to anyonewho is permitted to view the profile, although there are exceptions.Most SNSs also provide a mechanism for users to leave messages on their Friendsprofiles. This feature typically involves leaving "comments," although sites employvarious labels for this feature. In addition, SNSs often have a private messaging featuresimilar to webmail. While both private messages and comments are popular on most ofthe major SNSs, they are not universally available. Page 14
  • 15. Social Media’s Influence in Purchasing Decisions at USABeyond profiles, Friends, comments, and private messaging, SNSs vary greatly in theirfeatures and user base. Some have photo-sharing or video-sharing capabilities; othershave built-in blogging and instant messaging technology. There are mobile-specific SNSs(e.g., Dodgeball), but some web-based SNSs also support limited mobile interactions(e.g., Face book, MySpace, and Orkut). Many SNSs target people from specificgeographical regions or linguistic groups, although this does not always determine thesites constituency. Orkut, for example, was launched in the United States with anEnglish-only interface, but Portuguese-speaking Brazilians quickly became the dominantuser group. Some sites are designed with specific ethnic, religious, sexual orientation,political, or other identity-driven categories in mind. There are even SNSs for dogs(Dogster) and cats (Catster), although their owners must manage their profiles.While SNSs are often designed to be widely accessible, many attract homogeneouspopulations initially, so it is not uncommon to find groups using sites to segregatethemselves by nationality, age, educational level, or other factors that typically segmentsociety, even if that was not the intention of the designers. Page 15
  • 16. Social Media’s Influence in Purchasing Decisions at USAUtilization in BusinessThere are many ways that business’ can use social networking web sites to theiradvantage but we are going to focus on three. The first aspect of a business that coulduse a social networking website for would be the hiring of employees. Such sites actually help many people searching for jobs and many companies lookingfor employees to find each other. It’s as simple as creating your own resume and puttingit out there. then takes your resume and compares it to the needs andwants that companies have posted on the web site and connects the company withpeople who meet or exceed their posted standards. This a lot faster and involves a morebroad spectrum of resources for which a company can use to find the perfect employee.Another aspect of business affected by social networking websites is marketing. With themillions of people that use social networking web sites, what better way to market yourproduct then by buying space on those web sites? Whether it’s through banners or linksmillions of people will view your ads should they be placed on a social networkingwebsite. An example is that of Through its great reputation to gamers manygaming companies are willing to spend thousands of dollars for advertising space sincethey know that gamers who view the web site will most likely learn about their product.Not only is online advertising more effective than commercial advertising such as TV adsand magazines, it’s also more cost effective and reaches far more people than otherforms of advertising. An example of the effectiveness of internet advertising in which experts have estimated that “Given its traffic levels, videostreams and page views, some have calculated that YouTubes potential revenues couldbe in the millions per month.” (YouTube, 2007)A third aspect of business that is affected by social networking websites is that of fairpricing. With so many businesses’ out there creating virtually the same product it’s easyfor one to get lost in the broad spectrum of products. With social networking websitespeople can get advice from experts, gain knowledge of product through others who haveused it, and get reviews on nearly anything that is mass produced today. This in turn isalso great for businesses. With all this information out there concerning products it’seasy for a company to look through it and see what customers want and for how much.This in turn leads to better products being made to suit the customers’ needs and wants. Page 16
  • 17. Social Media’s Influence in Purchasing Decisions at USASocial Media OptimizationSocial Media Optimization (or SMO or Social SEO) is the methodisation of social mediaactivity with the intent of attracting unique visitors to website content. SMO is one ofmany online methods of website optimization. One of the many other methods is searchengine optimization or SEO.There are two categories of SMO/Social SEO methods:(a) Social media features added to the content itself, including: RSS feeds, social newsand sharing buttons, user rating and polling tools, and incorporating third-partycommunity functionalities like images and videos(b) Promotional activities in social media aside from the content being promoted,including: blogging, commenting on other blogs, participating in discussion groups, andposting status updates on social networking profiles.Social Media Optimization is related to search engine marketing, but differs in severalways, primarily the focus on driving traffic from sources other than search engines,though improved search ranking is also a benefit of successful Social Media Optimization.Social Media Optimization (SMO) is not limited to marketing and brand building.Increasingly smart businesses are integrating social media participation as part of theirknowledge management strategy (i.e. product/service development, recruiting,employee engagement and turnover, brand building, customer satisfaction and relations,business development and more). Additionally, Social Media Optimization is often attimes implemented to foster a community of the associated site, allowing for a healthybusiness to consumer relationship. Page 17
  • 18. Social Media’s Influence in Purchasing Decisions at USASocial media marketingSocial media marketing is a addition to personal, small business, corporate, and non-profit organizations’ integrated marketing communications plans. Integrated marketingcommunications is a multifaceted, orchestrated marketing and advertising practiceorganizations follow to connect with their target markets. Integrated marketingcommunications coordinates promotional elements: advertising, personal selling, publicrelations, publicity, direct marketing and sales promotion. Increasingly, viral marketingcampaigns are also grouped into integrated marketing communications. In thetraditional marketing communications model, the content, frequency, timing, andmedium of communications by the organization is in collaboration with an externalagent, i.e. advertising agencies, marketing research firms and public relations firms.However, the growth of social media has impacted the way organizations communicate.With the emergence of Web 2.0, the internet provides a set of tools that allow people tobuild social and business connections, share information and collaborate on projectsonline.Social media marketing programs usually centre on efforts to create content that attractsattention and encourages readers to share it with their social networks. A corporatemessage spreads from user to user and presumably resonates because it is coming froma trusted, third-party source, as opposed to the brand or company itself.Social media has become a platform that is easily accessible to anyone with internetaccess. Increased communication for organizations fosters brand awareness and often,improved customer service. Additionally, social media serves as a relatively inexpensiveplatform for organizations to implement marketing campaigns. With emergence ofchannels like Twitter, the barrier to entry in social media is greatly reduced. Page 18
  • 19. Social Media’s Influence in Purchasing Decisions at USASoftware toolsSeveral companies are now providing specialized tools and platform for social mediamarketing. Tools can be used for a variety of different things such as: • Social Media Monitoring • Social Aggregation • Social Book Marking and Tagging • Social Analytics and Reporting • Automation • Social Media • Blog Marketing • Validation Page 19
  • 20. Social Media’s Influence in Purchasing Decisions at USAMajor Social Networking sites and description about themFacebookFacebook is a social networking service and website launched in February 2004,operated and privately owned by Facebook, Inc. As of January 2011, Facebook has morethan 600 million active users. Users may create a personal profile, add other users asfriends, and exchange messages, including automatic notifications when they updatetheir profile. Facebook users must register before using the site. Additionally, users mayjoin common-interest user groups, organized by workplace, school or college, or othercharacteristics. The name of the service stems from the colloquial name for the bookgiven to students at the start of the academic year by university administrations in theUnited States to help students get to know each other better. Facebook allows any userswho declare themselves to be at least 13 years old to become registered users of thewebsite.Facebook was founded by Mark Zuckerberg with his college roommates and fellowcomputer science students Eduardo Saverin, Dustin Moskovitz and Chris Hughes. Thewebsites membership was initially limited by the founders to Harvard students, but wasexpanded to other colleges in the Boston area, the Ivy League, and Stanford University.It gradually added support for students at various other universities before opening tohigh school students, and, finally, to anyone aged 13 and over, but based on May 2011, there are 7.5 million children under 13 withaccounts, violating the sites terms.A January 2009 study ranked Facebook as the most used socialnetworking service by worldwide monthly active users, followed by MySpace.Entertainment Weekly included the site on its end-of-the-decade "best-of" list, saying,"How on earth did we stalk our exes, remember our co-workers birthdays, bug ourfriends, and play a rousing game of Scrabulous before Facebook?" Quantcast estimatesFacebook has 138.9 million monthly unique U.S. visitors in May 2011. According toSocial Media Today, in April 2010 an estimated 41.6% of the U.S. population had aFacebook account. Nevertheless, facebooks market growth started to stall in someregions, with the site losing 7 million active users in the United States and Canada inMay 2011.Facebook has affected the social life and activity of people in various ways. It can reunitelost family members and friends. One such reunion was between John Watson and thedaughter he had been searching for 20 years. They met after Watson found herFacebook profile. Another father-daughter reunion was between Tony McNaughton andFrances Simpson, who had not seen each other for nearly 48 years. Page 20
  • 21. Social Media’s Influence in Purchasing Decisions at USASome studies have named Facebook as a source of problems in relationships. Severalnews stories have suggested that using Facebook causes divorce and infidelity, but theclaims have been questioned and refuted by other commentators. Page 21
  • 22. Social Media’s Influence in Purchasing Decisions at USATwitterTwitter is a website, owned and operated by Twitter Inc., which offers a socialnetworking and micro blogging service, enabling its users to send and read messagescalled tweets. Tweets are text-based posts of up to 140 characters displayed on theusers profile page.The website is based in San Francisco. Twitter also has servers and offices in SanAntonio and Boston. Twitter, Inc. was originally incorporated in California, but as of 2011is incorporated in Delaware.Twitter was produced in March 2006 by Jack Dorsey and launched in July. Since thenTwitter has gained popularity worldwide and is estimated to have 200 million users,generating 190 million tweets a day and handling over 1.6 billion search queries per day.It is sometimes described as the "SMS of the Internet".The company experienced rapid growth. It had 400,000 tweets posted per quarter in2007. This grew to 100 million tweets posted per quarter in 2008. In February 2010,Twitter users were sending 50 million tweets per day. By March 2010, the companyrecorded over 70,000 registered applications. As of June 2010, about 65 million tweetswere posted each day, equalling about 750 tweets sent each second, according toTwitter. As noted on, Twitter moved up to the third-highest-ranking socialnetworking site in January 2009 from its previous rank of twenty-second.Twitters usage spikes during prominent events. For example, a record was set duringthe 2010 FIFA World Cup when fans wrote 2,940 tweets per second in the thirty-secondperiod after Japan scored against Cameroon on June 14, 2010. The record was brokenagain when 3,085 tweets per second were posted after the Los Angeles Lakers victory inthe 2010 NBA Finals on June 17, 2010, and then again at the close of Japans victoryover Denmark in the World Cup when users published 3,283 tweets per second. WhenAmerican singer Michael Jackson died on June 25, 2009, company servers crashed afterusers were updating their status to include the words "Michael Jackson" at a rate of100,000 tweets per hour.Twitter acquired application developer Atebits on April 11, 2010. Atebits had developedthe Apple Design Award-winning Twitter client Tweetie for the Mac and iPhone. Theapplication, now called "Twitter" and distributed free of charge, is the official Twitterclient for the iPhone, iPad and Mac.From September through October 2010, the company began rolling out "New Twitter",an entirely revamped edition of Changes included the ability to see picturesand videos without leaving Twitter itself by clicking on individual tweets which contain Page 22
  • 23. Social Media’s Influence in Purchasing Decisions at USAlinks to images and clips from a variety of supported websites including YouTube, Flickr,as well as a complete overhaul of the interface, which shifted links such as @mentionsand Retweets above the Twitter stream, while Messages and Log Out becameaccessible via a black bar at the very top of As of November 1, 2010, thecompany confirmed that the "New Twitter experience" had been rolled out to all users.On April 5, 2011, Twitter tested a new homepage, as well as phasing out the "OldTwitter." However, a glitch came about after the page was launched, so the previous"retro" homepage was still in use until the issues were resolved. On April 20, 2011, thenew homepage was reintroduced, though the "Switch to Old Twitter" option is stillavailable to users. Page 23
  • 24. Social Media’s Influence in Purchasing Decisions at USALinkedInLinkedIn is a business-related social networking site. Founded in December 2002 andlaunched in May 2003, it is mainly used for professional networking. As of 22 March2011, LinkedIn reports more than 100 million registered users, spanning more than 200countries and territories worldwide. The site is available in English, French, German,Italian, Portuguese, Spanish, Romanian, Russian and Turkish. Quantcast reportsLinkedIn has 21.4 million monthly unique U.S. visitors and 47.6 million globally.LinkedIn filed for an initial public offering in January 2011 and traded its first shares onMay 19, 2011, under the NYSE symbol "LNKD".One purpose of the site is to allow registered users to maintain a list of contact details ofpeople with whom they have some level of relationship, called Connections. Users caninvite anyone (whether a site user or not) to become a connection. However, if therecipient of an invitation selects "I dont know", this counts against the person invitingthem, and after five such "IDKs" a member cannot invite another to connect without firstsupplying their recipient mail address.This list of connections can then be used in a number of ways: • A contact network is built up consisting of their direct connections, the connections of each of their connections (termed second-degree connections) and also the connections of second-degree connections (termed third-degree connections). This can be used to gain an introduction to someone a person wishes to know through a mutual contact. • It can then be used to find jobs, people and business opportunities recommended by someone in ones contact network. • Employers can list jobs and search for potential candidates. • Job seekers can review the profile of hiring managers and discover which of their existing contacts can introduce them. • Users can post their own photos and view photos of others to aid in identification. • Users can now follow different companies and can get notification about the new joining and offers available. • Users can save (i.e. bookmark) jobs which they would like to apply for. Page 24
  • 25. Social Media’s Influence in Purchasing Decisions at USAThe "gated-access approach" (where contact with any professional requires either a pre-existing relationship, or the intervention of a contact of theirs) is intended to build trustamong the services users. LinkedIn participates in the EUs International Safe HarbourPrivacy Principles.LinkedIn also allows users to research companies with which they may be interested inworking. When typing the name of a given company in the search box, statistics aboutthe company are provided. These may include the ratio of female to male employees,the percentage of the most common titles/positions held within the company, thelocation of the companys headquarters and offices, or a list of present and formeremployees.The feature LinkedIn Answers, similar to Yahoo! Answers, allows users to ask questionsfor the community to answer. This feature is free and the main difference from the latteris that questions are potentially more business-oriented, and the identity of the peopleasking and answering questions is known.Another LinkedIn feature is LinkedIn Polls.A mobile version of the site was launched in February 2008 which gives access to areduced feature set over a mobile phone. The mobile service is available in sixlanguages: Chinese, English, French, German, Japanese and Spanish.In mid-2008, LinkedIn launched LinkedIn DirectAds as a form of sponsored advertising.In October, 2008, LinkedIn revealed plans to opening its social network of 30 millionprofessionals globally as a potential sample for business-to-business research. It istesting a potential social-network revenue model-research that to some appears morepromising than advertising.In October, 2008, LinkedIn enabled an "applications platform" that allows other onlineservices to be embedded within a members profile page. Among the initial applicationswere an Amazon Reading List that allows LinkedIn members to display books they arereading, a connection to Tripit, and a Six Apart, WordPress and TypePad application thatallows members to display their latest blog postings within their LinkedIn profile.In November, 2010, LinkedIn allowed businesses to list products and services oncompany profile pages; it also permitted LinkedIn members to "recommend" productsand services and write reviews.In January 2011, LinkedIn acquired CardMunch, a mobile app maker that scans businesscards and converts into contacts. LinkedIn plans to integrate this functionality into theirservices in the near future. Page 25
  • 26. Social Media’s Influence in Purchasing Decisions at USALinkedIn also supports the formation of interest groups, and as of March 24, 2011 thereare 870,612 such groups whose membership varies from 1 to 377,000. The majority ofthe largest groups are employment related, although a very wide range of topics arecovered mainly around professional and career issues, and there are currently 128,000groups for both academic and corporate alumni.Groups support a limited form of discussion area, moderated by the group owners andmanagers. Since groups offer the ability to reach a wide audience without so easilyfalling foul of anti-spam solutions, there is a constant stream of spam postings, andthere now exist a range of firms who offer a spamming service for this very purpose.LinkedIn has devised a few mechanisms to reduce the volume of spam, but recently tookthe decision to remove the ability of group owners to inspect the email address of newmembers in order to determine if they were spammers.Groups may be private, accessible to members only or may be open to Internet users ingeneral to read, though they must join in order to post messages. Page 26
  • 27. Social Media’s Influence in Purchasing Decisions at USAMySpaceMySpace is a social networking website. Its headquarters are in Beverly Hills, Californiawhere it shares an office building with its immediate owner, News Corp. Digital Media,owned by News Corporation.MySpace became the most popular social networking site in the United States in June2006, a position that it held throughout 2007 until 2008. However by April 2008,according to comScore, MySpace was overtaken internationally by its main competitor,Facebook, based on monthly unique visitors. MySpace employs 1,000 employees, afterlaying off 30% of its workforce in June 2009; the company does not disclose revenues orprofits separately from News Corporation. Quantcast estimates MySpaces monthly U.S.unique visitors at 19.7 million as of May 2011.Profiles contain two standard "blurbs": "About Me" and "Who Id Like to Meet" sections.Profiles also contain an "Interests" section and a "Details" section. In the "Details"section, "Status" and "Zodiac Sign" fields will always display. However, fields in thesesections will not be displayed if members do not fill them in. Profiles also contain a blogwith standard fields for content, emotion, and media. MySpace also supports uploadingimages. One of the images can be chosen to be the "default image", the image that willbe seen on the profiles main page, search page, and as the image that will appear tothe side of the users name on comments, messages, etc. A photo editor powered byFotoflexer is available which can not only crop images and adjust contrast but alsoconvert the image to a cartoon or a line drawing made with neon lights, or put the usersface in a photo of a $100 bill. Flash, such as on MySpaces video service, can beembedded. Blogging features are also available. These features could be hidden on aprofile by using the module customizer or using HTML/CSS codes. Photos could bedisplayed on the MySpace profile instead of a link that it was used in previous years.Photos can be made into a slide show.Bulletins are posts that are posted on to a "bulletin board" for everyone on a MySpaceusers friends list to see. Bulletins can be useful for contacting an entire friends listwithout resorting to messaging users individually. They have also become the primaryattack point for phishing. Bulletins are deleted after ten days.MySpace had a Groups feature that allowed a group of users to share a common pageand message board. Groups could be created by anybody, and the moderator of thegroup could choose for anyone to join, or to approve or deny requests to join. InNovember 2010, the group feature was turned off; a user clicking on the "Groups" link inthe features menu was led to a page that announced that groups were being revamped,and the user could sign up to be informed of when groups would come back. A similar Page 27
  • 28. Social Media’s Influence in Purchasing Decisions at USAmessage has been posted repeatedly in the Help page. No date for the reappearance ofthe group has been mentioned.In early 2006, MySpace introduced MySpaceIM, an instant messenger that uses onesMySpace account as a screen name. A MySpace user logs in to the client using the samee-mail associated with his or her MySpace account. Unlike other parts of MySpace,MySpaceIM is stand-alone software for Microsoft Windows. Users who use MySpaceIMget instant notification of new MySpace messages, friend requests, and comments.MySpaceIM was added as an default feature of MySpace by the end of 2009.In early 2007, MySpace introduced MySpaceTV, a service similar to the YouTube videosharing website. MySpace has been showing videos as early as 2006, but it has changedit name to MySpaceTV for a while. In 2009, MySpaceTV reverted back to MySpace Videoonce again. MySpace Video continues to be not as popular as other video sharing sitessuch as YouTube, but many sites had partnered with MySpace such as Hulu to promotetheir media to the MySpace community.In 2008, MySpace introduced an API with which users could create applications for otherusers to post on their profiles. The applications are similar to the Facebook applications.In May 2008, MySpace had added some security options regarding interaction withphotos and other media. Many applications that are popular on MySpace had spin offversions on Facebook. The MySpace app Mafia Wars has become a Facebook sensationas well. On the other hand, Facebook applications such as Bumper Stickers and Farmvillehave been used in MySpace and were popular as well. Many application partnershipssuch as Zygna and Slide has been responsible from creating third party apps for use onboth MySpace and Facebook, along with for use in the iTunes app store.There are a variety of environments in which users can access MySpace content on theirmobile phone. American mobile phone provider Helio released a series of mobile phonesin early 2006 that can utilize a service known as MySpace Mobile to access and editones profile and communicate with, and view the profiles of other members.Additionally, UIEvolution and MySpace developed a mobile version of MySpace for awider range of carriers, including AT&T, Vodafone and Rogers Wireless.In April 2007, MySpace launched a news service called MySpace News which displaysnews from RSS feeds that users submit. It also allows users to rank each news story byvoting for it. The more votes a story gets, the higher the story moves up the page.Full service classifieds listing offered beginning in August 2006. It has grown by 33percent in one year since inception. MySpace Classifieds was launched right at the sametime the site appeared on the internet. Page 28
  • 29. Social Media’s Influence in Purchasing Decisions at USALaunched April 29, 2008, is a combination of MySpace and kSolo,which allows users to upload audio recordings of themselves singing onto their profilepage. Users friends are able to rate the performances. A video feature is not yetavailable, but Tom Anderson, MySpace co-founder and president, states that it is in theworks.MySpace Polls is a feature on MySpace that was brought back in 2008 to enable users topost polls on their profile and share them with other users.MySpace uses an implementation of Telligent Community for its forum system. Page 29
  • 30. Social Media’s Influence in Purchasing Decisions at USAUnited States of AmericaThe United States of America (also referred to as the United States, the U.S., the USA,or America) is a federal constitutional republic comprising fifty states and a federaldistrict. The country is situated mostly in central North America, where its forty-eightcontiguous states and Washington, D.C., the capital district, lie between the Pacific andAtlantic Oceans, bordered by Canada to the north and Mexico to the south. The state ofAlaska is in the northwest of the continent, with Canada to the east and Russia to thewest across the Bering Strait. The state of Hawaii is an archipelago in the mid-Pacific.The country also possesses several territories in the Caribbean and Pacific.At 3.79 million square miles (9.83 million km2) and with over 310 million people, theUnited States is the third or fourth largest country by total area, and the third largestboth by land area and population. It is one of the worlds most ethnically diverse andmulticultural nations, the product of large-scale immigration from many countries. TheU.S. economy is the worlds largest national economy, with an estimated 2010 GDP of$14.780 trillion (23% of nominal global GDP and 20% of global GDP at purchasing powerparity).Indigenous peoples of Asian origin have inhabited what is now the mainland UnitedStates for many thousands of years. This Native American population was greatlyreduced by disease and warfare after European contact. The United States was foundedby thirteen British colonies located along the Atlantic seaboard. On July 4, 1776, theyissued the Declaration of Independence, which proclaimed their right to self-determination and their establishment of a cooperative union. The rebellious statesdefeated the British Empire in the American Revolution, the first successful colonial warof independence. The current United States Constitution was adopted on September 17,1787; its ratification the following year made the states part of a single republic with astrong federal government. The Bill of Rights, comprising ten constitutional amendmentsguaranteeing many fundamental civil rights and freedoms, was ratified in 1791.Through the 19th century, the United States displaced native tribes, acquired land fromFrance, Spain, the United Kingdom, Mexico, and Russia, and annexed the Republic ofTexas and the Republic of Hawaii. Disputes between the agrarian South and industrialNorth over the expansion of the institution of slavery and states rights provoked theAmerican Civil War of the 1860s. The Norths victory prevented a permanent split of thecountry and led to the end of legal slavery in the United States. By the 1870s, thenational economy was the worlds largest. The Spanish–American War and World War Iconfirmed the countrys status as a military power. It emerged from World War II as thefirst country with nuclear weapons and a permanent member of the United NationsSecurity Council. The end of the Cold War and the dissolution of the Soviet Union left the Page 30
  • 31. Social Media’s Influence in Purchasing Decisions at USAUnited States as the sole superpower. The country accounts for 43% of global militaryspending and is a leading economic, political, and cultural force in the world. Page 31
  • 32. Social Media’s Influence in Purchasing Decisions at USAEconomy of USAThe United States has a capitalist mixed economy, which is fueled by abundant naturalresources, a well-developed infrastructure, and high productivity. According to theInternational Monetary Fund, the U.S. GDP of $14.780 trillion constitutes 23% of thegross world product at market exchange rates and over 20% of the gross world productat purchasing power parity (PPP). It has the largest national GDP in the world, though itis about 5% less than the GDP of the European Union at PPP in 2008. The country ranksninth in the world in nominal GDP per capita and sixth in GDP per capita at PPP.The United States is the largest importer of goods and third largest exporter, thoughexports per capita are relatively low. In 2008, the total U.S. trade deficit was $696billion. Canada, China, Mexico, Japan, and Germany are its top trading partners. In2007, vehicles constituted both the leading import and leading export commodity. Japanis the largest foreign holder of U.S. public debt, having surpassed China in early 2010.The United States ranks second in the Global Competitiveness Report.In 2009, the private sector was estimated to constitute 55.3% of the economy, withfederal government activity accounting for 24.1% and state and local governmentactivity (including federal transfers) the remaining 20.6%. The economy is post-industrial, with the service sector contributing 67.8% of GDP, though the United Statesremains an industrial power. The leading business field by gross business receipts iswholesale and retail trade; by net income it is manufacturing. Chemical products are theleading manufacturing field. The United States is the third largest producer of oil in theworld, as well as its largest importer. It is the worlds number one producer of electricaland nuclear energy, as well as liquid natural gas, sulfur, phosphates, and salt. Whileagriculture accounts for just under 1% of GDP, the United States is the worlds topproducer of corn and soybeans. The New York Stock Exchange is the worlds largest bydollar volume. Coca-Cola and McDonalds are the two most recognized brands in theworld.In August 2010, the American labour force comprised 154.1 million people. With 21.2million people, government is the leading field of employment. The largest privateemployment sector is health care and social assistance, with 16.4 million people. About12% of workers are unionized, compared to 30% in Western Europe. The World Bankranks the United States first in the ease of hiring and firing workers. In 2009, the UnitedStates had the third highest labor productivity per person in the world, behindLuxembourg and Norway. It was fourth in productivity per hour, behind those twocountries and the Netherlands. Compared to Europe, U.S. property and corporate incometax rates are generally higher, while labor and, particularly, consumption tax rates arelower. Page 32
  • 33. Social Media’s Influence in Purchasing Decisions at USADemographics of USAAs of June 23, 2011, the United States has a total resident population of 311,610,000,making it the third most populous country in the world. It is a very urbanized population,with 82% residing in cities and suburbs as of 2008 (the worldwide urban rate is 50.5%).This leaves vast expanses of the country nearly uninhabited. California and Texas arethe most populous states, as the mean center of United States population hasconsistently shifted westward and southward. New York City is the most populous city inthe United States.The total fertility rate in the United States estimated for 2009 is 2.01 children perwoman, which is below the sub-replacement fertility threshold of 2.1. However, U.S.population growth is among the highest in industrialized countries, since the vastmajority of these have below-replacement fertility rates and the U.S. has higher levels ofimmigration. The United States Census Bureau shows population increases rangingbetween 0.85% and 0.89% for the twelve-month periods ending in 2009. Nonetheless,though high by industrialized country standards, this is below the world average annualrate of 1.19%.There were 155.6 million females in the United States in 2009. The number of males was151.4 million. At age 85 and older, there were more than twice as many women as men.People under 20 years of age made up over a quarter of the U.S. population (27.3%),and people age 65 and over made up one-eighth (12.8%) in 2009. The national medianage was 36.8 years. Racially, the U.S. has a White American majority.The American population more than tripled during the 20th century—at a growth rate ofabout 1.3% a year—from about 76 million in 1900 to 281 million in 2000. It reached the200 million mark in 1967, and the 300 million mark on October 17, 2006. Currently,population growth is fastest among minorities as a whole, and according to the CensusBureaus estimation for 2005, 45% of American children under the age of 5 belonged tominority groups.Hispanic and Latino Americans accounted for almost half (1.4 million) of the nationalpopulation growth of 2.9 million between July 1, 2005, and July 1, 2006. Immigrantsand their U.S.-born descendants are expected to provide most of the U.S. populationgains in the decades ahead.The Census Bureau projects a U.S. population of 439 million in 2050, which is a 46%increase from 2007 (301.3 million). However, the United Nations projects a U.S.population of 402 million in 2050, an increase of 32% from 2007 (the UN projects a gainof 38% for the world at large). In either case, such growth is unlike most European Page 33
  • 34. Social Media’s Influence in Purchasing Decisions at USAcountries, especially Germany, Russia, Italy, and Greece, or Asian countries such asJapan or South Korea, whose populations are slowly declining, and whose fertility ratesare below replacement.The United States has dozens of major cities, including 8 of the 60 "global cities" of alltypes, with three in the "alpha" group of global cities: New York City, Los Angeles andChicago. As of 2008, the United States had 52 metropolitan areas with a population ofover 1,000,000 people each.As of 2011, about 250 million Americans live in or around urban areas. That means morethan three-quarters of the U.S. population shares just about three percent of the area. Page 34
  • 35. Social Media’s Influence in Purchasing Decisions at USAThe following table shows the populations of the top ten cities and their metropolitanareas, as of July 1, 2008. Rank Core City Population Metro Metro area Region rank pop. 1 New York City, 8,363,710 1 19,006,798 Northeast New York 2 Los Angeles, 3,833,995 2 12,872,808 West California 3 Chicago, Illinois 2,853,114 3 9,569,624 Midwest 4 Houston, Texas 2,242,193 6 5,728,143 South 5 Phoenix, Arizona 1,567,924 12 4,281,899 West 6 Philadelphia, 1,447,395 5 5,838,471 Northeast Pennsylvania 7 San Antonio, 1,351,305 28 2,031,445 South Texas 8 Dallas, Texas 1,279,910 4 6,300,006 South 9 San Diego, 1,279,329 17 3,001,072 West California 10 San Jose, 948,279 31 1,819,198 West California 2008 U.S. Census Bureau estimates Page 35
  • 36. Social Media’s Influence in Purchasing Decisions at USALeveraging Social Networking Sites to Generate BusinessIt wasn’t until 1997, that the World Wide Web reached 50 million users throughout theUnited States. Facebook has gained over 100 million users in the US, since January,2009, marking a 145% growth within a year. If you’re a business owner and you stillhaven’t embraced the boon of a social networking website, you’re perhaps laggingbehind. Business organizations can easily boost their profits by marketing their productthrough a social networking website and stay away from debt. Though the business debtconsolidation options are there to assist you in managing your surging commercial debts,you must always take the needed steps to leave behind debt and stay financially fit.The financial health of your business can easily be determined by perusing the balancesheet where there is a clear comparison of the revenue and the investment. Though fewyears ago, a social networking website was primarily used for networking and friendship,yet nowadays, most businesses are leveraging the most famous social networkingwebsites to generate more revenue within their business organizations. Such steps arebeing taken to make ends meet amidst the tough economic conditions in the US. Have alook at the significant ways in which you can build your business organization byeffective socialization in the social networking websites.• Builds brand awareness – Targeting the brand-conscious peopleThe online social networking websites are the best platform for building and reinforcinga brand or an image that can be done easily. You just need to create a commercialprofile in the most famous networking websites like Facebook, Twitter, and LinkedIn andplace an image or a logo of your company as the display picture. This not only booststhe visibility, but also creates brand awareness among the visitors. However, you alsoneed to maintain a consistency in your words and actions in order to further develop andenhance your identity as the business owner.• Being with your customers – Targeting the right audience for your businessThis effect of the social networking websites is unavoidable. Such websites entirely relyon the regular presence of the millions of users. There are a huge number of people whospend their whole day browsing through different profiles in the social networkingwebsites, irrespective of their age. Thus, if you can create a niche in such a website, youcan well understand the effect that you may create online. Page 36
  • 37. Social Media’s Influence in Purchasing Decisions at USA• Level of acceptability – Using the popularity of the websites to your benefitYou must be well aware of the fact that the social networking websites are becomingincreasingly popular with time. A large number of users are resorting to such sites forcreating their personal business network and boosting the traffic to their company. Oneof the biggest benefits of leveraging the social networking sites is to boost theacceptability of your company website. As the networking websites are extremelyacceptable by the people, any company that has a profile in such a site is alsoautomatically accepted by the people.• Cost effective method – Enhancing profits in a relatively cheap wayWhile a business organization comes into operation, there are multiple things that needto be considered by the owner. The business costs are one of the most important pointsto be taken into consideration by the lenders. Boosting your business profits through asocial networking website is a relatively cheap method as there is no such cost involved.You just have to create a profile in a site to continue with your efforts.Before opening an account and becoming active on a particular social networkingwebsite, it is crucial to consider what each site offers to its visitors and how you maybenefit from their resources. Take some time to realize your personal social mediamarketing strategy and create a fully developed plan to enhance your business goals.Augment the returns and use the proceeds in creating an emergency fund so that youneed not run to business debt consolidation companies during a financial urgency.It is a golden rule of networking that people do business with people that they know,like, trust and respect. Networking meetings are facilitated at all times, breakfast,brunch, lunch, evenings, dinners, events etc all over the country enabling people tonetwork face to face on a regular basis in order to build up those relationships.You need to present yourself to the outside world in a way that attracts interest. Not justa very brief note of who you are and a list of the things you do but a personal statementthat brings your personality to life and makes people want to know more about you andwhat you do. Photographs are important because research shows that people are farmore likely to respond to someone they can "see". Page 37
  • 38. Social Media’s Influence in Purchasing Decisions at USABenefits of promoting your business and expertise within a networkYou gain credibility and visibility. You gain and dispense knowledge and expertise. Youhelp others and are helped by others. You can market, promote, advertise and sell yourproducts or services online. You can use a social network as a marketing database tofind customers or clients through key word searches. You can conduct market researchthrough polls. You can look at what your competition is doing. You can define your targetmarket and address them. It is a low cost route to market.People do business with people that they know, like, trust and respect. You can "meet"online and then arrange face to face meetings. Online networks are a great filter. Theybring together people with mutual wants and needs and with like minds. They find yousuppliers and clients. They find you partners, they find you staff and consultants. Theymatch supply and demand. The community may be purely business, purely social orincreasingly somewhere in between because "people are people".Utilising personal networks and the internet to find new contactsOnline networks and clubs bring together people with similar interests. Search facilitiesallow you to find people, people to find you and people to find each other. Visibility todaydoes not mean what you know or who you know but who knows YOUBuilding your business through referrals and collaborationOnce you have established visibility and credibility you will start to get testimonials andpeople will advocate and recommend you and you will quickly find you have a regularsupply of referrals being passed to you based upon your reputation and expertise.Others will approach you and ask you to collaborate with them or work in partnershipand together you may be able to win contracts that you would not win as a sole trader. Page 38
  • 39. Social Media’s Influence in Purchasing Decisions at USA1.1 Background of the problem Social media use is increasing and with that, more companies are investing time and money to market via social networks. Is the use of social media by companies influencing purchasing decisions? In this age of globalization, the world has become too small a place thanks to the electronic media and portals. Communication has become effective as never before thanks to the advent of internet. The social networking sites have also played a crucial role in bridging boundaries and crossing the seas and bringing all people at a common platform where they can meet like minded people or find old friends and communicate with them. It has become a potential mean to relation building and staying in touch with all known. Hence the objective that I wanted to achieve through my research is to: Find out the influence of social networking sites on the purchasing decision of the people- how it affects the business, what are its uses for each individuals and how have they been influenced by these sites. Page 39
  • 40. Social Media’s Influence in Purchasing Decisions at USA1.2 Introduction to the Company iSource Solutions IT Enabled Pvt Ltd iSource Solutions Inc., is one of the largest BPO Company in North America. iSource helped hundreds of small and medium enterprises in North America and Europe by their impressive cost savings and unassailable delivery turnaround time. iSource is one of the largest transcription companies in North America. They bring with them a truck load of transcriptioning experience, serving big ticket companies, media powerhouses, medical behemoths, technology blue chips, law firms etc. as well as independent media content providers, podcasters, market research groups, elite institutes, government departments, insurance companies, NGOs etc. TranscriptionStar is a flagship division of iSource Solutions Inc., which has been providing business process outsourcing needs for small and medium enterprises in North America and Europe since its inception in 2004. Headquartered in Pomona, California, with branch offices in New York, Texas, Florida, New Jersey and having its offshore delivery facility in different parts of India, iSource is a technology-driven company that has a rich client base in UK and US. A customer- oriented approach, acquired from years of experience in handling diverse clients, has led us to innovate with flexible and client specific programs designed to conform to the requirements of even the most fastidious customer. Their prodigious work in the field of general transcriptions has led the name of TranscriptionStar to be synonymous with Quality Voice to Text services. iSource guarantee superior customer service and our transparent, cost-efficient pricing has made their services highly favourable with small business units and individual clients. The iSource management teams ensure seamless interaction between our project management, business development and administrative teams in US with the production teams in India. Leveraging the advantages of experienced, industry professionals and an extensive, highly skilled human resource pool, iSource provides high quality, cost-effective service for our extensive client base. Coupling quality product with quality customer service, they are successfully supporting more than 100 customers from the different domains of business, academia, media, legal, finance, marketing and healthcare. iSource Data Division has handled large size Data Processing and Conversion Projects for Corporate (US & Europe) from varied industries like Finance, Insurance, Legal Healthcare, & Publishing. Page 40
  • 41. Social Media’s Influence in Purchasing Decisions at USAHiring Virtual Assistants is global trend and it is saving thousands of dollars everyyear for Small and Medium Businesses. Their Virtual Assistants are enablingentrepreneurs to enjoy the luxury of hiring at the fraction of cost and not having tokeep office overheads. Todays Blackberry age gives comfort to stay in touch withVirtual Assistant. At iSource, their Virtual Assistants are armed and equipped withstate-of- the-art collaborative tools, which enable Virtual Office. With Web based workflow tools, Working together got easier like never before. Industry leading Virtualoffice tool such as WebEx Web Office offers key functions like Sharing documents,calendars, databases and holding web meetings. “Real-time and anytime collaborationis buzz word, Keep everyone connected, Keep their clients office open 24 hours a day,with Zero hardware, zero software, and zero IT”. Page 41
  • 42. Social Media’s Influence in Purchasing Decisions at USA1.3 Brief introduction to the Research Methodology1.3.1 Objective of the study:  To find out the influence of social networking sites on the purchasing decision of the people  To find out how Social Networking sites helps the marketers  To Understand the various advantage of using Social networking sites  To find out whether the users believe in online marketers1.3.2 Methodology and Sample selection: The methodology of the study is as follows, Data Collection method: After secondary data collection through data collection over the internet, a primary research was carried out through a questionnaire. The questionnaire was well structured and the responses were sought from the respondents. The nature of the questions was such that it avoided ambiguous responses from the respondents and it also helped in quick analysis of the data collected. Two methods of questioning were used for the data collection: a). Person Assisted: The responses were collected by telephonic personal questioning. The responses were taken from the clients of iSource Solutions Inc. This form of questioning helped the respondent to understand the questions better and answer accordingly. b). Wed enabled: The questionnaire was e-mailed to respondents who filled it and then mailed it back. A flaw that I realized there was that some of the respondents did not understand the questions and hence could not answer them to the best of their capability, unlike the other method employed where the questions could be explained if required. Sample Size: In this study, 100 clients of iSource IT Enabled Service Pvt Ltd are selected as sample1.3.3 Research Design: Page 42
  • 43. Social Media’s Influence in Purchasing Decisions at USAResearch: Descriptive researchData Source: Primary and SecondaryResearch Instrument: QuestionnaireType of Questionnaire: Structured non-disguisedType of questions: Closed ended questionsSample unit: Clients of iSource IT Enabled Service Pvt LtdSample unit: 100 qualified usersSampling procedure: Simple random procedureContact method: In personal via telephone and onlineMode of collecting data: the respondent will be chosen randomly and requested togrand interviews. The questions then will be asked in a firm.Determined sequence: The secondary data will be collected from various books,journals, report – both published and unpublished. Page 43
  • 44. Social Media’s Influence in Purchasing Decisions at USA 1.3.4 Period of Study: The period of study was from 20-4-2011 to 31-5-2011.1.3.5 Tools of data Collection: A questionnaire is developed to collect data from respondents. The primary data are analysed and interpretation of the results was made done with the help of pictorial representation1.3.6 Statistical Analysis: Statistical tools are for used for analyzing and for interpreting the data with the help of pictorial representation. 1. Percentage analysis 2. Chi-Square analysis 3. Binomial Distribution Fitting 4. Median Page 44
  • 45. Social Media’s Influence in Purchasing Decisions at USAPercentage analysisPercentage refers to a special kind of ratio. Percentages are used in making comparisonbetween two or more series of data. Percentages are used to describe relationships.Percentages are also be used to compare the relative terms, the distribution of two ormore series of data. % of respondent = No: of Respondents X 100 Total RespondentChi square testThe Chi square test is one of the simplest and most used non-parameter tests instatistical work. The quantity chi square describes the magnitude of the discrepancybetween theory and observation.The steps involved in Chi square tests are as follows. 1. Observed frequencies O are tabulated. 2. Expected frequencies E are tabulated. Expected frequency for any cell can be calculated using the formula, E = (RT * CT) / N Where E → Expected frequency RT → The row total for the row containing the cell CT → The column total for the column containing the cell N → The total number of observation 3. The difference between the observed and expected frequencies are obtained and squares of these differences are tabulated (O – E )2 4. The values of (O – E )2 obtained in step 3 are divided by the respective expected frequency and total Σ (O – E )2 / E is obtained. 5. The calculated value of X2 is compared with the table value of X 2 for a given degree of freedom at a certain level of significance (generally 5% level is Page 45
  • 46. Social Media’s Influence in Purchasing Decisions at USA selected).By degrees of freedom we mean the number of classes to which the values can beassigned arbitrarily if at the 5% level of significance, the calculated value of X2 is morethan the table value of X2, the difference between theory and observation is consideredto be significant.On the other hand, the calculated value of X2 is not considered as significant, i.e. it isregarded as due to fluctuations of sampling and hence ignored. The degree of freedomcan be calculated by using v = (c-1) (r-1) where c refers to column and r refers to rows.Binomial distributionIn probability theory and statistics, the binomial distribution is the discrete probabilitydistribution of the number of successes in a sequence of n independent yes/noexperiments, each of which yields success with probability p. Such a success/failureexperiment is also called a Bernoulli experiment or Bernoulli trial; when n = 1, thebinomial distribution is a Bernoulli distribution. The Binomial distribution is an n timesrepeated Bernoulli trial. The binomial distribution is the basis for the popular binomialtest of statistical significance.The binomial distribution is frequently used to model the number of successes in asample of size n drawn with replacement from a population of size N. If the sampling iscarried out without replacement, the draws are not independent and so the resultingdistribution is a hyper geometric distribution, not a binomial one. However, for N muchlarger than n, the binomial distribution is a good approximation, and widely used.MedianIn probability theory and statistics, a median is described as the numerical valueseparating the higher half of a sample, a population, or a probability distribution, fromthe lower half. The median of a finite list of numbers can be found by arranging all theobservations from lowest value to highest value and picking the middle one. If there isan even number of observations, then there is no single middle value; the median isthen usually defined to be the mean of the two middle values.In a sample of data, or a finite population, there may be no member of the samplewhose value is identical to the median (in the case of an even sample size), and, if thereis such a member, there may be more than one so that the median may not uniquelyidentify a sample member. Nonetheless, the value of the median is uniquely determinedwith the usual definition. A related concept, in which the outcome is forced to correspondto a member of the sample, is the medoid. Page 46
  • 47. Social Media’s Influence in Purchasing Decisions at USAAt most, half the population have values less than the median, and, at most, half havevalues greater than the median. If both groups contain less than half the population,then some of the population is exactly equal to the median. For example, if a < b < c,then the median of the list {a, b, c} is b, and, if a < b < c < d, then the median of thelist {a, b, c, d} is the mean of b and c; i.e., it is (b + c)/2.The median can be used as a measure of location when a distribution is skewed, whenend-values are not known, or when one requires reduced importance to be attached tooutliers, e.g., because they may be measurement errors. A disadvantage of the medianis the difficulty of handling it theoretically. Page 47
  • 48. Social Media’s Influence in Purchasing Decisions at USACharts used in the projectColumn Chart:A column chart, also known as a bar chart, is a chart with rectangular bars of lengthsusually proportional to the magnitudes or frequencies of what they represent. The barscan be horizontally or vertically oriented. The column chart is vertically oriented bars.Column charts are useful for showing data changes over a period of time or forillustrating comparisons among items. In column charts, categories are typicallyorganized along the horizontal axis and values along the vertical axis.Line Chart:A line chart or line graph is a type of graph, which displays information as a series ofdata points connected by straight line segments. It is a basic type of chart common inmany fields. It is an extension of a scatter graph, and is created by connecting a seriesof points that represent individual measurements with line segments. A line chart isoften used to visualize a trend in data over intervals of time – a time series – thus theline is often drawn chronologically.Pie Chart:A pie chart (or a circle graph) is a circular chart divided into sectors, illustratingproportion. In a pie chart, the arc length of each sector (and consequently its centralangle and area), is proportional to the quantity it represents. When angles are measuredwith 1 turn as unit then a number of percent is identified with the same number ofcentiturns. Together, the sectors create a full disk. It is named for its resemblance to apie which has been sliced. The earliest known pie chart is generally credited to WilliamPlayfairs Statistical Breviary of 1801.The pie chart is perhaps the most ubiquitous statistical chart in the business world andthe mass media. However, it has been criticized, and some recommend avoiding it,pointing out in particular that it is difficult to compare different sections of a given piechart, or to compare data across different pie charts. Pie charts can be an effective wayof displaying information in some cases, in particular if the intent is to compare the sizeof a slice with the whole pie, rather than comparing the slices among them. Pie chartswork particularly well when the slices represent 25 to 50% of the data, but in general,other plots such as the bar chart or the dot plot, or non-graphical methods such astables, may be more adapted for representing certain information. It also shows thefrequency within certain groups of information.Bar Chart: Page 48
  • 49. Social Media’s Influence in Purchasing Decisions at USAA bar chart or bar graph is a chart with rectangular bars with lengths proportional to thevalues that they represent. The bars can be plotted vertically or horizontally. Bar chartsare used for plotting discrete (or discontinuous) data which has discrete values and isnot continuous. Some examples of discontinuous data include shoe size or eye colour,for which you would use a bar chart. In contrast, some examples of continuous datawould be height or weight. A bar chart is very useful if you are trying to record certaininformation whether it is continuous or not continuous data. Bar charts also look a lotlike a histogram. They are often mistaken for each other.Scatter Plot chart:A scatter plot or scatter graph is a type of mathematical diagram using Cartesiancoordinates to display values for two variables for a set of data. The data is displayed asa collection of points, each having the value of one variable determining the position onthe horizontal axis and the value of the other variable determining the position on thevertical axis. This kind of plot is also called a scatter chart, scatter gram, scatter diagramor scatter graph. A scatter plot is used when a variable exists that is under the control ofthe experimenter. If a parameter exists that is systematically incremented and/ordecremented by the other, it is called the control parameter or independent variable andis customarily plotted along the horizontal axis. The measured or dependent variable iscustomarily plotted along the vertical axis. If no dependent variable exists, either type ofvariable can be plotted on either axis or a scatter plot will illustrate only the degree ofcorrelation (not causation) between two variables.Doughnut chartA doughnut chart (also spelled donut) is functionally identical to a pie chart (or circlegraph) with the exception of a blank center and the ability to support multiple statisticsas one. A simple pie chart is typically used to show the proportion of data within a singlecategory. Rather than using a doughnut chart to increase the number of categories thatcan be displayed in a single chart, a doughnut chart may be used to show greater levelsof detail across a single category of information.A doughnut chart is one of the 11 types of basic charts that are possible to create inMicrosoft Excel, although Excel lists the doughnut chart as a distinct category of its own,rather than as a type of pie chart.Bubble Chart: Page 49
  • 50. Social Media’s Influence in Purchasing Decisions at USAA bubble chart is a type of chart where each plotted entity is defined in terms of threedistinct numeric parameters. Bubble charts can facilitate the understanding of the social,economical, medical, and other scientific relationships. The entities displayed on abubble chart can be compared in terms of their size as well as their relative positionswith respect to each numeric axis. Since both X and Y axis of the bubble chart is numericscales, the position of plot is an indicator of two distinct numeric values. The area of theplot depends on the magnitude of a third numeric characteristic. One concern whenrendering data with a bubble chart is that the area of a circle is proportional to thesquare of the radius. So if you scale the radius with your third data point, you willdisproportionally emphasize the third factor. To get a properly weighted scale, oneshould take the square root of the magnitude of this third metric. However, many bubblecharts are rendered without this correction. Page 50
  • 51. Social Media’s Influence in Purchasing Decisions at USA1.3.7 Broad hypothesis put for the testing H1: There is a significant relationship between marketing and Social Networking Sites H0: There is no significant relationship between marketing and Social Networking Sites1.3.8 Limitations:  Sample size could have been greater than 100 to match the diverse background of the respondent.  Influence is difficult to measure properly, since a recommendation can be positive, and yet still have a negative impact on purchase behavior.  Customer feedback and the social network are often found overtaking price, and in some cases brand as a major factor in online purchase decisions.  Until recently, many online purchase decision were driven by brand and security concerns.  Small companies are seeing becoming the champions of the networks. Page 51
  • 52. Social Media’s Influence in Purchasing Decisions at USA 1.4 Scope of the Study a) The survey will span across different age groups and genders. b) The survey will span across individual perception in use of social networking sites in purchasing decisionIt’s not just individuals that are populating Social Networking Sites – companies, brands,products and even bands are realizing that SNS is an excellent way to gain exposureover a vast audience. Even people who have resisted joining SNS in the past are quicklyrecognizing its potential to become and stay connected to other people andorganizations. This has largely contributed to SNS’s rapid growth and shows no signs ofslowing down. In the Internet Marketing and promotion of the online businesses SocialNetworks like Facebook and Twitter are always considered as a good source of trafficand getting direct customers. Page 52
  • 53. Social Media’s Influence in Purchasing Decisions at USA1.5 Limitations of the Study The limitations of this study are: 1. There is a short time-frame allowing for only one survey, test period and a small number of those surveyed. 2. There is not enough long-term research on behalf of organizations to track the possible purchase influence. 3. This study will not track actual purchases. Results will be based upon survey results. 4. This study will not take into account how organizations are using social media, and if they are using it as effectively as possible. Page 53
  • 54. Social Media’s Influence in Purchasing Decisions at USA1.6 Chapterisation Social Media’s Influence in Purchasing Decisions Among Clients from USA at iSource ITES Pvt LtdChapter 1 : Introduction to the studyChapter 11 : Literature ReviewChapter111&1V : Empirical Results/Data analysis &DiscussionChapter V : Summary, and conclusionBibliographyAnnexure Page 54
  • 55. Social Media’s Influence in Purchasing Decisions at USA Chapter 2Literature ReviewThis chapter will include a discussion of social media use by consumers, organizationsand purchasing decisions.Consumers and Social MediaSocial media has become a household name among organizations and society.Knowledge Networks reports that 83% of the internet population uses social media, with47% of those using it on a weekly basis (Loechner, 2009). According to the NielsenCompany, globally, consumers spent more than 5.5 hours on social networking sites inDecember 2009 which is an 82% increase year-over-year, when users were spendingthree-plus hours on social networking sites. Facebook was the top social networking sitein December, with 67% of global users visiting the site that month (Nielsen, 2009).In the U.S, people have continued to spend more time on social networking sites, withtotal minutes increasing 210% year-over-year in December 2009. Additionally, the timeper person increased 143% year-over-year. Facebook and Twitter continue to lead thepack with year-over-year growth spent by U.S increasing 200% and 368% (NielsenWire, 2009).According to a study by the Pew Research Center (Lenhart, 2009) and contrary to howsocial media statistics appear, adults make up the bulk of these users on social networksin comparison to teens. Adults make up a larger portion of the population than teens,because the 35% of adults represents a higher number of users than 65% of teens. Thatsaid, younger adults in the 18-24 age group are much more likely to use social networkswith 75% compared to 7% of adults 65-plus. Page 55
  • 56. Social Media’s Influence in Purchasing Decisions at USAFacebook, which recently surpassed yahoo as the second most visited website (Parr,2009) saw its user base grow from 42 million to 103 million in 2009 which is a 144.8%growth rate. The 35-plus age group represents more than 30% of the entire user baseand the 55-plus age group grew 922.7% in 2009 (Corbett, 2010).Social Media in OrganizationsGiven these types of numbers, it’s no surprise that organizations have also begun toembrace social media for business. According to the 2010 Digital Marketing Outlook,81% of executives surveyed are expecting an increase in social media projects and willbe investing more money into digital projects and reducing the money spent ontraditional marketing. The survey also showed that social networks were high on the to-do list with 45% reporting that they were a top priority in 2010 (Value of Social Media,2010).When looking at Fortune 100 companies, 54% are on Twitter, 32% have a blog and 29%have an active Face book page. Only 17% of companies are using all three of the abovesocial networks, with the average Fortune 100 Twitter account having 5,234 followers.The median is 674 followers (Ostrow, 2009).It’s not only large businesses increasing in social media use. According to a BIA/KelseyLocal Commerce Monitor study, there’s increasing interest from small and mid-sizebusinesses putting social media to work for them. The report showed that 9% of mid-size companies use Twitter and 32% plan to use social media in the next 12 month(Eddy, 2009).According to the study by Coleman-Parks Research of the importance of business socialmedia marketing, 84% of North American companies feel they require new methods tointeract with customers, including social media. The study states that companies who donot use social media do so “at their own risk,” meaning they are missing opportunities togrow and are likely to find themselves behind companies who embrace media tools.Companies who do use social media reported the following: • Improved Feedback 78% • Improved Customer Satisfaction 66% • Improved Customer support 71% • Increased Sales 40% • Improved public perception of company 75% Page 56
  • 57. Social Media’s Influence in Purchasing Decisions at USAEngagement with ConsumersOn the other end of the spectrum, consumers are engaging with brands on socialnetworks more. According to a 2008 Cone Business Social Media Study (Cone, 2008), 60percent of Americans use social media and of those, 50 percent interact with companieson social media web sites. Additionally, 93 percent of social media users believe acompany should have a presence in social media, and to top that off, 85 percent believethat a company should also interact with its consumers - resulting in a strongerconnection and being better served.A study of media use of college students confirmed that four out of every 10 collegestudents have reported finding a brand on a social network, compare to 19 percent ofadults (OMalley, 2009).A new study conducted by ForeSee Results of nearly 10,000 visitors to the 40 largestU.S. retail sites found that 56% of shoppers are friends, following or subscribing to aretailer on social networking sites, particularly Facebook, Twitter and YouTube. It alsofound that more than half of all online shoppers use Facebook, but only a quarter of thetop 100 retailers by sales volume have their own presence on Facebook (Walsh, 2010). Page 57
  • 58. Social Media’s Influence in Purchasing Decisions at USAInfluence on Purchasing DecisionsThe question to be asked is- are users visiting social media sites to help makepurchasing decisions? Even though 83% of the internet population participates in socialmedia, one study reports that less than 5% of those users go to the social sites forguidance on purchasing decisions. Along with that, only 16% of the users say that theywould be more likely to buy from companies that advertise on the sites (Loechner,2009).According to a Pew Internet study on adults and social network sites, social media sitesare mostly used for personal networking with 89% using their online profiles to keep upwith friends, 57% using their profile to make plans with friends and 49% using them tomake new friends (Lenhart 2009).Additionally, according to the eMarketer “Women’s Survey,” even though more than one-half of women are active in social media, 74.8% reported not being influenced by itwhen it came to purchase decisions and just over one-fifth said they were somewhatinfluenced and only 3.3% reported greater influence.Additionally, female internet users said they were much more likely to say onlinepurchase decision were affected by coupons and discounts, product ratings, and onlineadvertisements, than by online communities (Are Women Really Ignoring SocialNetworking, 2009).That said, an iProspect research study (iProspect, 2007) showed that social networkingsites are influencing the purchasing decisions of a meaningful percentage of the internetusers who visit them.For example, according to new dada from comScore, nearly $16 billion was spent duringthe first 36 days of the 2009 holiday shopping season (Nov. 1) which was a 3% increaseversus 2008. What also was found was that 28% of shoppers said that social mediainfluenced their purchases in 2009 (Social Media Influencing, 2009).A study by DEI and OTX on the impact of social media on purchasing decision showedthat consumers rely on different social networking sites ,as much as company websitesforbrand/product information. Companies that use social media in an engaging way withtheir customers increase their likelihood of them making a purchase. Sixty percent ofpeople reported that they pass along information they receive online in social mediawebsites and two-thirds agreed that recommendations from other people could influencetheir purchase decisions. Additionally, talking with a brand representative online wasshown to strong influence the purchasing decision (Engaging Consumers Online, 2008). Page 58
  • 59. Social Media’s Influence in Purchasing Decisions at USACompanies using social media are reporting returns on investments (ROI) from usingsocial media. Dell, who established their Twitter account over two years ago, claimed tohave brought in more than $3 million from Twitter followers who clicked through theirposts, to the web site, and followed through with a purchase (Twitter Helps Dell, 2009).An Atlanta aquarium had their staff spend a minimal amount of time and resources tosend out information through Facebook, MySpace and Twitter, with their efforts bringingin $42,000 – equating to 2,500 admission tickets. Yet, the aquarium admits that it’s hardto say how many people would have come without the promotion and how many camebecause they received a discount (Pratt, 2009).Naked Pizza, an all-natural New Orleans pizza place has also generated a positive ROIdue to their social media efforts. Co-founder Jeff Leach says he was able to drive 15% ofhis daily revenues with Twitter and of those, 90% were new customers (Morgan, 2009). Page 59
  • 60. Social Media’s Influence in Purchasing Decisions at USASNS IN INDIA:In all the social networking phenomenon in India is small compared to the US (Indiansocial networking websites today claim a user base of around 3 million registered users)while MySpace, which has 106 million users and Orkut which has 67 million have fargreater numbers.Clearly, Indian firms have a lot of work ahead of them in order to catch up. However,Siddhartha Roy, CEO, BigAdda, says optimistically: “We are early on the curve.” AlokMittal, MD, Canaan Partners, a venture capital firm, says: “When you put that in context,Indian social networking websites are in their infancy. The break-even point is longer,but once they attain a critical mass of 40 million users, then VC firms will start investingin them.”Navin Mittal, CEO,, says: “With the Indian Internet user-base negligiblecompared to the US or China, these are very early days.” The owner of the blog Trak.indoes a great job of explaining the benefits of social networking for India and what itmeans for consumers and businesses.Social efforts will permeate the enterprise.“Social is much bigger than marketing and PR. It is a customer phenomenon. This willdemonstrate itself as social moves into product development, operations, customerservice and even sales.” (Brenner)“Corporations will open up to social media. According to a fairly recent study from RobertHalf, 54 percent of CIOs said they completely prohibit access to social networking sitesfrom within their corporate walls. I remember a CIO back in 1995 plaintively asking ifeveryone in the company really needed access to the Internet. The position of the 54percent in the Robert Half study will very soon seem just as quaint.” (Pick)“Social will no longer be ad hoc. As Michael Brenner noted, it’s so much more thanmarketing and PR. We’re right in the middle of a social media strategy developmentproject for a big global B2B company, and we’re looking at the holistic enterprise (agrowing trend among our client base). Social touches customers across the enterpriseexperience, so requirements for capabilities, understanding and building business casesmust follow suit.” (Fox) Page 60
  • 61. Social Media’s Influence in Purchasing Decisions at USAWidespread consolidation will occur on multiple fronts.“Shake out in the social media analytics space: I know of at least 45 companies that areoffering social media analytics, where features are not unique and the market cannotsupport this number of companies.” (Traupel)“There has been a huge influx of both paid and free tools in this space. Watch this spaceand expect to see more mergers, acquisitions, new tools being developed and other toolsdisappearing. The race is on to develop the one perfect tool that does it all (includingpublish, listen, measure, engage, predict, and wash the dishes!).” (Marx)“Fuelled partially by consolidation, mergers and acquisitions, and partially by APImashups, we’ll see huge progress in unifying social communication.” (Baer)“Thinning of the herd: I expect many tool vendors and second-tier social sites to reachthe end of the road as revenue models and efficient markets take over.” (Days)Stronger focus on global audiences.“As corporations have scrambled to build expertise in and incorporate social media intotheir overall marketing initiatives, there’s been a tendency to focus on the NorthAmerican markets. Watch out for new channels and technologies that will emergeglobally as countries continue to embrace social media.” (Marx)“Much of the social innovation will come from Third World countries that are using thesefree platforms to make up for deficiencies in their communication infrastructure.”(Schaefer)“I agree with Stephanie Marx. We’ll see greater emphasis on social media in EMEA andAPAC as people learn what it means to be social.” (Days) Page 61
  • 62. Social Media’s Influence in Purchasing Decisions at USASocial media will become increasingly mobile.“As more people buy 3G and 4G phones, they are using them to connect with others atan even more rapid pace. Video sharing and watching on mobile phones is becomingubiquitous. This will have dramatic implications for marketers, content marketing andtargeting techniques.” (Brenner)“Video will continue to grow rapidly as an essential tool in any marketer’s social mediatool box and/or campaign strategy. As Mike Brenner touched on, not just for client side,but for usage via mobile phones as well.” (Traupel)Metrics will mature.“Google and Bing are now ‘recognizing’ and ‘rewarding’ those active in social media withbetter and higher ranking. Case in point, comments here on this platform generateimmediate search engine results, which is great for traffic, branding and lead generation;it can also generate back-links (via embedded URL) for the author’s Web site.” (Traupel)“News Feed Optimization (NFO) on Facebook will become the new SEO. Basically .2percent of fans return to a fan page, and in some cases it’s more like .02 percent (hat tipBrandGlue). So people on Facebook who ‘like’ your fan page basically never go back toit. So stop thinking of it as a microsite and making it all fancy. What you need to focuson is the content and optimizing the content to get comments and likes.” (Dunay)“As social networking becomes more ingrained in marketing and PR practices, a commonset of metrics will evolve that enable comparison of success across platforms, programsand organizations.” (Pick)Social media will become targetable.“Soon, we’ll be able to send an email only to customers who clicked a particular bit.lylink on Twitter. We’ll be able to send a Facebook status message only to customers whovisited a particular page on our website. By combining what we know about ourcustomers and prospects and friends across multiple social outposts, we’ll end up with acentralized view of each of our connections. This will finally give us the ability tomeaningfully segment our social communication.” (Baer) Page 62
  • 63. Social Media’s Influence in Purchasing Decisions at USAFacebook advertising will continue to improve — and get more expensive.“After nine years of Search Engine Marketing, I think it is safe to say any keyword youare going to buy is maxed out when it comes to the Google AdWords auction process. Sopeople are looking for an alternative: Facebook Advertising. As more people find outabout this gem of an advertising experience, CPC and CPM prices will continue to marchupward. I have already begun to see this in my own ad buys.” (Dunay)Listening will improve and become increasingly important.“As companies get more sophisticated with their listening programs, they want to takeaction on customer insights and data to positively impact their business and help drivedecisions. Ad-hoc/passive listening will become more organized, and enterprise-levelcompanies will develop processes that cross business groups.” (Marx)“Listening will get better. Improvement in listening platforms will continue — with aspecial request that Google analytics finally adds social media, so I can use onemeasurement tool)” (Days)Marketers and brands will think like publishers/broadcasters.“The trend of ‘marketers and brands as publishers’ will continue. Blogs and dynamiccontent will become absolutely necessary for any company website and for brands tointeract with customers in a personable and authentic way.” (Brenner)“Brands will need to think like broadcasters. This crosses two areas: content (you needto produce quality and quantity to drive engagement) and channel building (stop withthe microsites already; attention is an expensive gift, so learn how to recycle it). If, asan agency, your business model is based on building microsites and spending millions inmedia to drive traffic to it only to shut it down and start again for the next campaign,you’re going to need to reinvent.” (Fox)‘Hard’ ROI will remain elusive.“Budgets for social media will remain relatively small, as we still can’t answer the realROI questions in a way that satisfies the C-level execs who control the budget.” (Days)“By mid-year, the millionth blog post will be written with the headline ‘How to Determinethe ROI of Social Media.’ It will describe the ‘many kinds of ROI,’ which will make methrow up a little in my mouth.” (Schaefer) Page 63
  • 64. Social Media’s Influence in Purchasing Decisions at USASNSs Hit the MainstreamFrom 2003 onward, many new SNSs were launched, prompting social software analystClay Shirky (2003) to coin the term YASNS: "Yet Another Social Networking Service."Most took the form of profile-centric sites, trying to replicate the early success ofFriendster or target specific demographics. While socially-organized SNSs solicit broadaudiences, professional sites such as LinkedIn, Visible Path, and Xing (formerly openBC)focus on business people. "Passion-centric" SNSs like Dogster (T. Rheingold, personalcommunication, August 2, 2007) help strangers connect based on shared interests.Care2 helps activists meet, Couchsurfing connects travellers to people with couches, andMyChurch joins Christian churches and their members. Furthermore, as the social mediaand user-generated content phenomena grew, websites focused on media sharing beganimplementing SNS features and becoming SNSs themselves. Examples include Flickr(photo sharing), Last.FM (music listening habits), and YouTube (video sharing).With the plethora of venture-backed start-ups launching in Silicon Valley, few peoplepaid attention to SNSs that gained popularity elsewhere, even those built by majorcorporations. For example, Googles Orkut failed to build a sustainable U.S. user base,but a "Brazilian invasion" (Fragoso, 2006) made Orkut the national SNS of Brazil.Microsofts Windows Live Spaces (a.k.a. MSN Spaces) also launched to lukewarm U.S.reception but became extremely popular elsewhere.Few analysts or journalists noticed when MySpace launched in Santa Monica, California,hundreds of miles from Silicon Valley. MySpace was begun in 2003 to compete with siteslike Friendster, Xanga, and AsianAvenue, according to co-founder Tom Anderson(personal communication, August 2, 2007); the founders wanted to attract estrangedFriendster users (T. Anderson, personal communication, February 2, 2006). After rumorsemerged that Friendster would adopt a fee-based system, users posted Friendstermessages encouraging people to join alternate SNSs, including and MySpace(T. Anderson, personal communication, August 2, 2007). Because of this, MySpace wasable to grow rapidly by capitalizing on Friendsters alienation of its early adopters. Oneparticularly notable group that encouraged others to switch were indie-rock bands whowere expelled from Friendster for failing to comply with profile regulations.While MySpace was not launched with bands in mind, they were welcomed. Indie-rockbands from the Los Angeles region began creating profiles, and local promoters usedMySpace to advertise VIP passes for popular clubs. Intrigued, MySpace contacted localmusicians to see how they could support them (T. Anderson, personal communication,September 28, 2006). Bands were not the sole source of MySpace growth, but thesymbiotic relationship between bands and fans helped MySpace expand beyond formerFriendster users. The bands-and-fans dynamic was mutually beneficial: Bands wanted to Page 64
  • 65. Social Media’s Influence in Purchasing Decisions at USAbe able to contact fans, while fans desired attention from their favourite bands and usedFriend connections to signal identity and affiliation.Futhermore, MySpace differentiated itself by regularly adding features based on userdemand (boyd, 2006b) and by allowing users to personalize their pages. This "feature"emerged because MySpace did not restrict users from adding HTML into the forms thatframed their profiles; a copy/paste code culture emerged on the web to support users ingenerating unique MySpace backgrounds and layouts (Perkel, in press).Teenagers began joining MySpace en masse in 2004. Unlike older users, most teenswere never on Friendster—some joined because they wanted to connect with theirfavorite bands; others were introduced to the site through older family members. Asteens began signing up, they encouraged their friends to join. Rather than rejectingunderage users, MySpace changed its user policy to allow minors. As the site grew, threedistinct populations began to form: musicians/artists, teenagers, and the post-collegeurban social crowd. By and large, the latter two groups did not interact with one anotherexcept through bands. Because of the lack of mainstream press coverage during 2004,few others noticed the sites growing popularity.Then, in July 2005, News Corporation purchased MySpace for $580 million (BBC, 2005),attracting massive media attention. Afterwards, safety issues plagued MySpace. The sitewas implicated in a series of sexual interactions between adults and minors, promptinglegal action (Consumer Affairs, 2006). A moral panic concerning sexual predators quicklyspread (Bahney, 2006), although research suggests that the concerns wereexaggerated. Page 65
  • 66. Social Media’s Influence in Purchasing Decisions at USAA Global PhenomenonWhile MySpace attracted the majority of media attention in the U.S. and abroad, SNSswere proliferating and growing in popularity worldwide. Friendster gained traction in thePacific Islands, Orkut became the premier SNS in Brazil before growing rapidly in India(Madhavan, 2007), Mixi attained widespread adoption in Japan, LunarStorm took off inSweden, Dutch users embraced Hyves, Grono captured Poland, Hi5 was adopted insmaller countries in Latin America, South America, and Europe, and Bebo became verypopular in the United Kingdom, New Zealand, and Australia. Additionally, previouslypopular communication and community services began implementing SNS features. TheChinese QQ instant messaging service instantly became the largest SNS worldwide whenit added profiles and made friends visible (McLeod, 2006), while the forum tool Cyworldcornered the Korean market by introducing homepages and buddies (Ewers, 2006).Blogging services with complete SNS features also became popular. In the U.S., bloggingtools with SNS features, such as Xanga, LiveJournal, and Vox, attracted broadaudiences. Skyrock reigns in France, and Windows Live Spaces dominates numerousmarkets worldwide, including in Mexico, Italy, and Spain. Although SNSs like QQ, Orkut,and Live Spaces are just as large as, if not larger than, MySpace, they receive littlecoverage in U.S. and English-speaking media, making it difficult to track theirtrajectories.Expanding Niche CommunitiesAlongside these open services, other SNSs launched to support niche demographicsbefore expanding to a broader audience. Unlike previous SNSs, Facebook was designedto support distinct college networks only. Facebook began in early 2004 as a Harvard-only SNS (Cassidy, 2006). To join, a user had to have a email address. AsFacebook began supporting other schools, those users were also required to haveuniversity email addresses associated with those institutions, a requirement that keptthe site relatively closed and contributed to users perceptions of the site as an intimate,private community.Beginning in September 2005, Facebook expanded to include high school students,professionals inside corporate networks, and, eventually, everyone. The change to opensignup did not mean that new users could easily access users in closed networks—gaining access to corporate networks still required the appropriate .com address, whilegaining access to high school networks required administrator approval. (As of thiswriting, only membership in regional networks requires no permission.) Unlike otherSNSs, Facebook users are unable to make their full profiles public to all users. Anotherfeature that differentiates Facebook is the ability for outside developers to build Page 66
  • 67. Social Media’s Influence in Purchasing Decisions at USA"Applications" which allow users to personalize their profiles and perform other tasks,such as compare movie preferences and chart travel histories.While most SNSs focus on growing broadly and exponentially, others explicitly seeknarrower audiences. Some, like aSmallWorld and BeautifulPeople, intentionally restrictaccess to appear selective and elite. Others—activity-centered sites like Couchsurfing,identity-driven sites like BlackPlanet, and affiliation-focused sites like MyChurch—arelimited by their target demographic and thus tend to be smaller. Finally, anyone whowishes to create a niche social network site can do so on Ning, a platform and hostingservice that encourages users to create their own SNSs.Currently, there are no reliable data regarding how many people use SNSs, althoughmarketing research indicates that SNSs are growing in popularity worldwide (comScore,2007). This growth has prompted many corporations to invest time and money increating, purchasing, promoting, and advertising SNSs. At the same time, othercompanies are blocking their employees from accessing the sites. Additionally, the U.S.military banned soldiers from accessing MySpace (Frosch, 2007) and the Canadiangovernment prohibited employees from Facebook (Benzie, 2007), while the U.S.Congress has proposed legislation to ban youth from accessing SNSs in schools andlibraries (H.R. 5319, 2006; S. 49, 2007).The rise of SNSs indicates a shift in the organization of online communities. Whilewebsites dedicated to communities of interest still exist and prosper, SNSs are primarilyorganized around people, not interests. Early public online communities such as Usenetand public discussion forums were structured by topics or according to topicalhierarchies, but social network sites are structured as personal (or "egocentric")networks, with the individual at the center of their own community. This more accuratelymirrors unmediated social structures, where "the world is composed of networks, notgroups" (Wellman, 1988, p. 37). The introduction of SNS features has introduced a neworganizational framework for online communities, and with it, a vibrant new researchcontext. Page 67
  • 68. Social Media’s Influence in Purchasing Decisions at USAARTICLE-1Social networking sites, which allow users to build or be part of onlinecommunities, account for 44% of the country’s Internet trafficSocial networking sites, which allow users to build or be part of online communities,account for 44% of the country’s Internet traffic, according to a report by consulting firmJuxtConsult Research and Consulting Pvt. Ltd. The space is dominated by global playerssuch as Orkut, MySpace, Facebook and Hi5. Google Inc.’s Orkut, launched in 2004, isthemost popular social networking site among Indians with more than seven million users,but advertising is something the site has only recently dabbled with.“Nobody has made money on social networking so far,” Ajit Balakrishnan, chairman andchief executive officer (CEO), India Ltd, the company behind, oneof the earliest Indian dot-coms, had previously said. “But when 10 million peoplecongregate, somewhere down the line the company will make money, and it will beadvertiser-related, he had added. launched iShare, a video sharing platform,in July, and plans to add a social networking tool to it in the coming weeks.Indian firms and entrepreneurs entering the social networking space are convinced thatthey need to build up a critical mass of users first, and then worry about, started by the Reliance-Anil Dhirubhai Ambani Group’s RelianceEntertainment three months ago, has about 700,000 users but no advertiser yet.Similarly, one-year-old social networking site for students has a userbase that exceeds one million but no advertisers.“On the Internet, consumer is king. They decide where they want to spend their timeand advertisers recognize that,” said Siddhartha Roy, chief operating officer, “You want to first create a strong user base and give them an uninterruptedexperience.”Kavita Iyer, CEO, Minglebox, agrees: “...In this business, users fluctuate from one site toanother and it is important to first reach a certain level of stability and maturity beforegetting advertisers on board.”But some experts say that those scrambling to enter the social networking space haveleft it too late, and that plain vanilla social networking will, by itself, not work any longer.According to Balakrishnan, social networking has to become more than just acommunication platform. “Social networking will have to be morphed into every online Page 68
  • 69. Social Media’s Influence in Purchasing Decisions at USAinitiative,” he had said. “It has a tendency to pick up fast but loses momentum just asfast. This is why we are integrating iShare with social networking.”That’s a strategy similar to the one adopted by Yahoo Inc. “We want to make Yahoo mailmore social by combining properties such as SMS,instant messenger and emailstogether. It’s too early to tell what we’re planning on social networking, but it will be aconvergence of communication channels,” John Kremer, vice-president, Yahoo Mail, hadpreviously said.Others are trying this as well. Ibibo Web Pvt. Ltd’s is a multi-platform socialinteractive site with applications such as networking, blogging and gaming as some of itsapplications. “We’ve been around for seven months in India but I can tell you that ittakes about two to three years of good consumer traction to drive revenues,” said AshishKashyap, CEO, Ibibo group. “It is important to create a picnic effect before we can get toadvertisers,” he added.Advertisers themselves seem content with the picnic effect itself. PepsiCo India HoldingsPvt. Ltd has not yet bought into social networking from the advertising point of view, butit has bought into the concept. “Pepsi has not advertised on social networking sites sofar but we have got what we wanted by users themselves creating discussion groupsabout the brand,” said a spokesperson for PepsiCo India.According to one expert, that may well indicate what social networking sites need to doto start earning revenues.“For advertisers, social networking sites are slow in generating revenues directly butthey are good in influencing decisions,” said Gulrez Alam, group head, paid search,Communicate2, a paid-search marketing company. “Social media sites will soon havealternative revenue generating tactics that will help influence the user without intrudingon the experience, that’s the way ahead.”Almost half the Internet traffic generated in India is on account of social networking, andwhile this has not translated into advertising revenue so far, a pioneer in the country’sInternet space expects the situation to change. Page 69
  • 70. Social Media’s Influence in Purchasing Decisions at USAARTICLE-2How safe is your Orkut account?Mayank Tewari/Dhananjay KhadilkarSunday, December 23, 2007 03:07 ISTA virus, which has been fixed by Google, had affected between 4 lakh to 7 lakh usersMUMBAI: Google recently added a new feature on Orkut where users can post Active XContent on their friend’s scrapbook. But the feature turned out to be Google’s nemesisas an attacker used the vulnerability and posted a virus that affected between 4,00,000to 7,00,000 Orkut users. Though Google managed to fix the bug on Thursday, theincident has highlighted the security aspects of social networking sites such as Orkutthat have a huge following in countries like India.A Google official, who requested anonymity, admitted that because of this bug severalpeople received scraps from friends, who claimed they had never posted any suchscraps. “The newly introduced scrapbook feature had been exploited,” the official said.According to Chetan Gupta, a 26-year-old independent cyber security expert, “Thefeature allows users to post clips, songs, animation etc on their as well as other user’sscrapbooks,” he said.Users who were attacked got a message in their mailboxes informing them that someonehad posted a scarp on their profile. The scrap, written in Portuguese, when translatedinto English reads: “2008 is coming… I wish that it begins quite well for you.”As soon as the user viewed the post, the virus downloaded a file to the user’s computer.The worm then took control of the user’s account and enlisted a group called ‘Infectionspelo Vírus do Orkut’, which translates as ‘Infected by Orkut virus’. The virus also sentcopies of itself to all the friends of the user and repeated the process.According to, the virus infected seven lakh Orkut users within 24 hoursbefore Google was able to rectify the problem. The virus was not supposed to do anyreal harm to the users. The intent, according to a blog posting on TrendMicro, was to only make a point. The blog post says “It appears from both the script thatthis script was designed purely to spread, rather than for more malicious purposes. Theauthor has pulled the malicious JavaScript from the Web, having gotten his pointacross.” Page 70
  • 71. Social Media’s Influence in Purchasing Decisions at USAA Google spokesperson said that the internet search giant takes the security of its usersvery seriously. “We worked quickly to implement a fix for the issue. Service to Orkut wasnot disrupted during this time.” This is not the first time a virus like this has targeted asocial network. MySpace too was attacked by ‘Samy Is My Hero’ worm in 2005.ARTICLE-3Business Standard, January 25 07Thursday, 25 January 2007Business Standard, Riding the networking wavePriyanka Joshi / New Delhi January 24, 2007TECHNOLOGY: Want to get seen? Advertise on social networking sites. This,incidentally, is the new mantra of online advertisers.About 93 per cent of the 28 million Indians online belong to the age group 18-45 years— a target audience that has the maximum buying power.Ten million of these are hooked on to some form of online social media, be it personal,career or business networking, matrimonial sites, discussion rooms, virtual activityplatforms, instant messenger, podcasts, RSS feeds and blogs. The mix of social mediasites being a hot favourite among this bunch of young Indians, it presents a perfectmilieu for online advertisers.Content-specific advertisements have become a rage on networking sites like Orkut,TechTribe, LinkedIn, Ryze, Flickr, MSN Live Spaces, Blogger, Fropper and Facebook,which are a compelling buy for advertisers seeking to target the active lifestyle set thesites cater to.In short, content-specific networks are riding a wave of popularity and newer networksseem to be springing up every day.Rajnish, head (digital marketing revenue and strategic business), MSN India, explainswhy marketers want to be seen on social networking sites: “In Asia, email and instantmessaging take 40-50 per cent of the time we spend online. Blogosphere is doubling insize every six months and an average Indian user spends anywhere between 40-60minutes daily on social media sites. Little wonder, banks, automobile companies, FMCGs,and even IT firms want a virtual advert that’s both engaging and innovative.”Social media advertising has been taking the online advertising industry by storm. Thetotal marketing spend on social media is forecast to grow at a compound annual rate of Page 71
  • 72. Social Media’s Influence in Purchasing Decisions at USA106.1 per cent from 2005 to 2010, reaching $757 million in 2010, according to a reportfrom PQ Media.Some social-networking communities focus on vertical markets with a narrowly-definedaudience, such as business-relationship sites like LinkedIn and TechTribe. Their adrevenue exceeded $20 million in 2006.“There has been a recent ‘change of guard’ online with social networks — from being a‘push’ medium to a ‘pull’ medium,” remarks Rajnish, “MSN is using people’s attention toengage users with advertisers through contextual advertising and desktop television.”The audiences, in return, generate revenues each time they click on a banner, keywordor a floating advertisement on a webpage. While online rate cards are not exactly cheap,averaging between Rs 50,000 and Rs 2 lakh, the prices are expected to get spiked byanother 20-25 per cent by the end of 2007.Social-networking sites entice users to spend considerable time and view many pageviews, and many sites are seeing those numbers increase.Nielsen/Net Ratings reports that users’ visits to YouTube grew in duration from about 17minutes to 28 minutes (64 per cent) over the first six months of 2006. Page views grew515 per cent during the same period. Members of communities spend hours looking upfriends’ profiles and following paths of interconnected relationships. These long visits andhigh page views directly correlate to ad revenue.Blog advertising, worldwide, totalled $25 million in 2006, which includes blogs, podcastsand RSS advertising.“By the tail-end of 2007, even Indian bloggers (the well known ones) would be makingmoney out of advertising on their blogs, podcasts, videos, personal web pages and otherforms of user generated content,” claims a media buyer.Anil Kaul, CEO, Absolute Data, a research and analytics firm, has helped websites andadvertisers look beyond popular targeting options like geography and demography“using complex targeting options on networks, like behavioural and contextual anddomain-level targeting. We have shown clients how to get the most from an onlineadvert.” Page 72
  • 73. Social Media’s Influence in Purchasing Decisions at USAARTICLE-4 The Perils Of Social Networking BY BRIAN DEAGONINVESTORS BUSINESS DAILYPosted 12/26/2007In November, more than 145 million people worldwide logged onto at least one of the 20most-visited social networking Web sites, says Nielsen/Net Ratings.Brian Mann wasnt among them.Its not that Mann, founder of management consulting firm Midnight Oil, is opposed tonetworking.Developing relationships, getting referrals and connecting with potentially new clients iscrucial to his business.He has as many as eight business-related meals a week. He regularly attends a weeklynetworking group in Los Angeles, where 55 professionals meet for Saturday breakfast todiscuss trends in technology, media and entertainment. He visits trade shows,conferences and seminars to make connections.Yet he says social networking Web sites such as LinkedIn, Facebook and MySpace, whichlet people post their profiles and potentially link up with hundreds of others, isnt forhim.Quantity, Quality"Networking to me means adding real, incremental value to the person you meet," Mannsaid. "You cant screen people on social networks the way you can in real life."Social networks are not so much about quality as they are about quantity. And quantitymeans you have to kiss a lot of frogs with the hope that someday youll find a prince."Social networking Web sites remain a social experiment. Whether these sites canmaintain stickiness — keeping people coming back — is critical to keeping enoughviewers to draw advertisers.But as Mann attests, not everyone likes the sites, for business or pleasure. Page 73
  • 74. Social Media’s Influence in Purchasing Decisions at USAUsers of Facebook revolted when the firm unveiled Beacon, a system designed to cataloguser activity and use the data so advertisers could more accurately track ads.Privacy advocates and analysts said Beacon was far more invasive than the companyimplied.Facebook founder Mark Zuckerberg issued a public apology and changed the program sothat only users who wanted to be part of Beacon were included in the program."The push-back was strong," said Nicholas Givotovsky, an analyst with research firmDiffusion Group. "Sometimes what people want isnt directly in line with the businessmodel of the company. Limits are being felt."A case in point to the limitations is a story told by Fons Tuinstra, director of speakerrelations for China-based Chinabiz Speakers, on a recent Web posting titled "WhyLinkedIn Does not Work for Me."Tuinstra used LinkedIn to see if his contacts on the site would help him connect to theircontacts, in a bid to develop some business relationships.It didnt work.Turns out his contacts really didnt know the people they had listed as their contacts, orat least didnt know them well enough to feel comfortable forwarding Tuinstras request.Wrote Tuinstra: "A large number of people . . . have so many contacts that they cannotrealistically know them personally."Tuinstra then offered this advice: "You should only add people you really know to yourcontact list."Then theres the case of a man well call John Doe, since he spoke on condition he not beidentified.On Facebook, John had linked to a female acquaintance that another friendrecommended, thinking she might become a client down the road. Page 74
  • 75. Social Media’s Influence in Purchasing Decisions at USAOTHER RESEARCHNetworks and Network StructureSocial network sites also provide rich sources of naturalistic behavioural data. Profile andlinkage data from SNSs can be gathered either through the use of automated collectiontechniques or through datasets provided directly from the company, enabling networkanalysis researchers to explore large-scale patterns of finding, usage, and other visibleindicators (Hogan, in press), and continuing an analysis trend that started withexaminations of blogs and other websites. For instance, Golder, Wilkinson and Huberman(2007) examined an anonym zed dataset consisting of 362 million messages exchangedby over four million Facebook users for insight into Finding and messaging activities.Lampe, Ellison, and Steinfield (2007) explored the relationship between profile elementsand number of Facebook friends, finding that profile fields that reduce transaction costsand are harder to falsify are most likely to be associated with larger number of friendshiplinks. These kinds of data also lend themselves well to analysis through networkvisualization.SNS researchers have also studied the network structure of Friendship. Analyzing theroles people played in the growth of Flicker and Yahoo! 360s networks, Kumar, Novak,and Tomkins (2006) argued that there are passive members, inviters, and linkers "whofully participate in the social evolution of the network". Scholarship concerning LiveJournals network has included a Friendship classification scheme (Hsu, Lancaster,Paradesi, & Weniger, 2007), an analysis of the role of language in the topology ofFriendship (Herring et al., 2007), research into the importance of geography in Friending(Liben-Nowell, Novak, Kumar, Raghavan, & Tomkins, 2005), and studies on whatmotivates people to join particular communities (Backstrom, Huttenlocher, Kleinberg, &Lan, 2006). Based on Orkut data, Spertus, Sahami, and Büyükkökten (2005) identified atopology of users through their membership in certain communities; they suggest thatsites can use this to recommend additional communities of interest to users. Finally, Liu,Maes, and Davenport (2006) argued that Friend connections are not the only networkstructure worth investigating. They examined the ways in which the performance oftastes (favorite music, books, film, etc.) constitutes an alternate network structure,which they call a "taste fabric." Page 75
  • 76. Social Media’s Influence in Purchasing Decisions at USABridging Online and Offline Social NetworksAlthough exceptions exist, the available research suggests that most SNSs primarilysupport pre-existing social relations. Ellison, Steinfield, and Lampe (2007) suggest thatFacebook is used to maintain existing offline relationships or solidify offline connections,as opposed to meeting new people. These relationships may be weak ties, but typicallythere is some common offline element among individuals who friend one another, suchas a shared class at school. This is one of the chief dimensions that differentiate SNSsfrom earlier forms of public CMC such as newsgroups (Ellison et al., 2007). Research inthis vein has investigated how online interactions interface with offline ones. Forinstance, Lampe, Ellison, and Steinfield (2006) found that Facebook users engage in"searching" for people with whom they have an offline connection more than they"browse" for complete strangers to meet.ReferencesAre Women Really Ignoring Social Network Marketing? - eMarketer. (n.d.). Marketresearch & statistics: Internet marketing, advertising & demographics - eMarketer.Retrieved February 21, 2010, from, C. (n.d.). Twitter helps Dell rake in sales | Reuters. Business & Financial News,Breaking US & International News | Retrieved March 6, 2010, from - The Business Search Engine® and Business Directory for BusinessInformation. (n.d.). 2009 Business Social Media Benchmarking Study. RetrievedFebruary 28, 2010, from http://Business.comEddy, N. (n.d.). Businesses Increasingly Using Social Networking, Study Finds -Midmarket from eWeek. Technology News, Tech Product Reviews, Research andEnterpriseAnalysis - eWeek. Retrieved February 27, 2010, from Consumers Online. (n.d.). Engaging Consumers Online. Retrieved February 21,2010, from Page 76
  • 77. Social Media’s Influence in Purchasing Decisions at USA Chapter 3Data Analysis & DiscussionGender Classification of the Respondent Table No: 3.1 Sex No: of Respondent Percentage Male 58 58 Female 42 42 Source: Primary DataFigure No: 3.1 Sex 42 42% Male Female 58% 58Inference:  Out of the total qualified sample size of 100, 58% are male and the female denomination is 42%. From this it is clear that males are more net savvy than female.Location Page 77
  • 78. Social Media’s Influence in Purchasing Decisions at USA Table No: 3.2 Location No of respondent Percentage City 33 33 Metro 44 44 Town 23 23 Source: Primary DataFigure No: 3.2 Location Town City 23% 33% Metro 44% Page 78
  • 79. Social Media’s Influence in Purchasing Decisions at USAInference:  Based on the above analysis, we can see that people living in the metro region are using Social networking sites more with 44%  33% of the respondent lives at City  23% of the respondent lives at town Page 79
  • 80. Social Media’s Influence in Purchasing Decisions at USAEducation qualification Table No: 3.3 Education qualification No of respondent Percentage Non – graduate 18 18 Graduate 37 37 Post graduate 45 45 Source: Primary DataFigure No: 3.3 45 90 37 80 70 60 50 percentage 18 40 No: of respondent 30 20 10 0 Non -graduate Graduate Post-GraduateInference:  It is clearly visible from the analyzed data that Post-Graduates are using Social Networking Sites for making purchasing decisions.  As the educational level increases people become more net savvy and will be focusing on building social relationship.  45% of respondents were Post graduates Page 80
  • 81. Social Media’s Influence in Purchasing Decisions at USADesignation Table no: 3.4 Designation No of respondent Percentage Student 11 11 Private employee 72 72 Public employee 6 6 Self-employee 11 11 Source: Primary DataFigure No: 3.4 Designation 11 11 6 student Private mpolyee public empolyee Self empolyee 72Inference:  We infer that 72 users are employed in the private sector followed by student and entrepreneurs who are at 11 each.  It is also evident that the users in private sector stay online longer compared to others  This leads to conclude that the 72 of these respondents tend to manage/juggle their social life with their professional life. i.e., Stay online during work and to perform work related activities Page 81
  • 82. Social Media’s Influence in Purchasing Decisions at USAAge Table No: 3.5 Age Group No: of Respondent Percentage Less than 18 1 1 18-25 32 32 26-45 38 47 46-65 23 23 More than 65 6 6 Source: Primary DataFigure No: 3.5 Age 38 less than 18 18-25 23 29 26-45 46-65 more than 65 6 32 1Inference:  Out of the total qualified sample size of 100 38% users are between the age group 25-45 years followed by 32% in the age group 18-25 years.  The age group of 46-65 years is close to18-25 years and catching up fast with others who are more active in socially compared to them. Page 82
  • 83. Social Media’s Influence in Purchasing Decisions at USAMedian Age Group F CF Less than 18 1 1 18-25 32 33 26-45 38 71 46-65 23 94 More than 65 6 100Median = Size of N/2th item = 100/2 = 50 itemMedian lies between 26-45 = L1+ (N/2 –CF)/F X C = 26 + (50-33)/38 X 20 = 34.94Inference:  The median age of using Social Networking Sites are 34.94  The number of Social Networking Sites users in the age class of 26-45 is more than compared to other age class Page 83
  • 84. Social Media’s Influence in Purchasing Decisions at USASocial networking Sites usage Table 3.6 Response No: of Respondent Percentage Yes 92 92 No 8 8 Source: Primary DataFigure No: 3.6 No, 8 Yes, 92Inference:  92% of respondent have said that they use social networking sites  Only a small percentage of respondent have said that they do not use internet personally. Page 84
  • 85. Social Media’s Influence in Purchasing Decisions at USASocial media profiles used for purchase decision Table No: 3.7 Social Network used No of distributions Percentage Face book 52 17.45 Twitter 52 17.45 LinkedIn 41 13.76 MySpace 9 3.03 Hi5 23 7.72 Orkut 17 5.7 33 11.07 Windows Live 26 8.72 Google Buzz 30 10.07 None of the above 15 5.03 Source: Primary DataFigure No: 3.7 None of these 15 5.03 Google Buzz 30 10.07 Windows Live 26 8.72 33 11.07 Orkut 17 5.7 No: of distribution Hi5 23 7.72 Percentage MySpace 9 3.03 LinkedIn 41 13.76 Twitter 52 17.45 Facebook 52 17.45 0 10 20 30 40 50 60 70 80 Page 85
  • 86. Social Media’s Influence in Purchasing Decisions at USAHypothesis H1: There is a significant relationship between marketing and Social Networking Sites H0: There is no significant relationship between marketing and Social Networking SitesBinomial Fitting x f fx 0 52 0 1 52 52 2 41 81 3 9 27 4 23 92 5 17 85 6 33 198 7 26 182 8 30 240 9 15 135 Σf=298 Σfx=1092 Mean= Σfx / Σf = 3.66 M=n X P 3.66=9 X P P=0.40 Q=0.59 Page 86
  • 87. Social Media’s Influence in Purchasing Decisions at USA x P(x)=nCx(P) Q x n-x P(x) X 100 0 0 9 .866=.9 9C0(.40) (.59) =0.0086 1 1 8 9C1(.40) (.59) =0.052 5.28 2 2 7 14.33 9C2(.40) (.59) =0.143 3 3 6 9C3(.40) (.59) =0.226 22.6 4 4 5 23.06 9C4(.40) (.59) =0.230 5 5 4 9C5(.40) (.59) =0.156 15.63 6 6 3 7.066 9C6(.40) (.59) =0.070 7 7 2 9C7(.40) (.59) =0.020 2.053 8 8 1 0.347 9C8(.40) (.59) =0.0034 9 9 0 9C8(.40) (.59) =0.0002 0.026Degree of Freedom = 9 Page 87
  • 88. Social Media’s Influence in Purchasing Decisions at USA O E (O-E)2 (O-E)2/E 0 0 9 .866=.9 339.7 9C0(.40) (.59) =0.0086 1 1 8 9C1(.40) (.59) =0.052 5.28 413.4 2 2 7 14.33 49.63 9C2(.40) (.59) =0.143 3 3 6 9C3(.40) (.59) =0.226 22.6 8.18 4 4 5 23.06 0.00015 9C4(.40) (.59) =0.230 5 5 4 9C5(.40) (.59) =0.156 15.63 0.123 6 6 3 7.066 95.18 9C6(.40) (.59) =0.070 7 7 2 9C7(.40) (.59) =0.020 2.053 28.72 8 8 1 0.347 44.32 9C8(.40) (.59) =0.0034 9 9 0 9C8(.40) (.59) =0.0002 0.026 3.19 Σ(O-E)2/E= 982.44315 Table value=16.919 Calculated value > Table value Therefore Reject H0Inference:  Facebook and Twitter is the most popular Social Networking Sites  The analysis using Binomial Fitting method shows that there is a significant relationship between marketing and Social Networking Sites  Using this social networking sites as a media for marketing product/services will generate a better result for the organisation  Number of people using Social Networking Sites is increasing day by day Page 88
  • 89. Social Media’s Influence in Purchasing Decisions at USA Only a few people are either not using SNS or are using the social networking sites other than the ones mentioned in the questionnaire. LinkedIn is most commonly used by the Business people for making more connection between the B2B sectors. The percentage of respondent using Facebook and Twitter is 17.45% each. is also gaining a good popularity among the SNS users The analysis shows that Social media can be used as a tool for influencing customers or clients in their purchasing decisions Page 89
  • 90. Social Media’s Influence in Purchasing Decisions at USAAdvantages of using social networking sites over traditional media inpurchasing a product/service Table No: 3.8 Response No of respondent Percentage Strongly disagree 4 4 Disagree 11 11 Neither disagree nor agree 18 18 Agree 35 35 Highly agree 32 32 Source: Primary DataFigure No: 3.8 Highly agree 32 Agree 35 Neither disagree nor agree 18 Disagree 11 Strongly disagree 4 0 10 20 30 Percentage No: of respondent 40Inference:  From the analyzed data, we can reach to a conclusion that now a days the people find advantage of using social networking sites over traditional media in purchasing a product/service.  35% respondent agreed to the statement with a concrete support of 32% respondent who strongly agreed to the statementOnline shopping surpassing off line shopping Page 90
  • 91. Social Media’s Influence in Purchasing Decisions at USA Table No: 3.9 Response No of respondent Percentage Yes 46 46 No 54 54 Source: Primary DataFigure No: 3.9 No: of Respondent 46 Yes No 54Inference:  54% of the respondents says that online shopping has not surpassed their off line shopping.  The analyzed data shows that the online shopping will definitely surpass the off line shopping the years to come as the difference between the two percentages are not much Page 91
  • 92. Social Media’s Influence in Purchasing Decisions at USARespondents level of comfortness with Social media in making purchasedecision Table No: 3.10 Response No of respondent Percentage Strongly disagree 16 16 Disagree 17 17 Neither disagree nor agree 3 3 Agree 36 36 Highly agree 28 28 Source: Primary DataFigure No: 3.10 80 70 36 60 28 50 40 16 17 Percentage 30 No: of respondent 20 10 3 0 Strongly Disagree Neither Agree Strongly Disagree agree nor Agree disagreeInference:  36% respondent agrees and 28% respondents highly agrees that social network sites helps them to feel comfortable in their purchasing decision  Where 16% strongly disagree and 17% disagreed with the statement.  we can infer from the result that people feels comfortable with SNS in their purchasing decisions. Page 92
  • 93. Social Media’s Influence in Purchasing Decisions at USAUsage of social networking sites for official business purposes Table No: 3.11 Response No: of Response Percentage Once a week 11 11 Twice a week 16 16 Thrice a week 25 25 Everyday 43 43 Rarely 5 5 Source: Primary DataFigure No: 3.11 100 90 43 80 70 60 50 25 Percentage 40 No: of respondent 30 16 20 11 10 5 0 Once a Twice a Thrice a Everyday Rarely week week weekInference:  The number of respondent using SNS everyday are 43%  25% and 16% respondents use SNS thrice a week and twice a week respectively.  From this we can conclude that the time spend by the people in SNS are growing rapidly. Page 93
  • 94. Social Media’s Influence in Purchasing Decisions at USATime period from the usage of Social Networking sites Table No: 3.12 Responses No: of Respondents Percentage Less than one year 34 34 1-5 yrs 52 52 5-10 yrs 13 13 More than 10 years 1 1 Source: Primary DataFigure No: 3.12 60 52 50 40 34 30 No: of respondent 20 Percentage 13 10 1 0 Less than once 1-5 yrs 5-10 yrs More than 10 year yearsInference:  52 respondents are using social networking from last 1 to 5 years  34 respondents has newly joined the social networking sites  From this we can reach to a conclusion that number of people engaging in SNS are increasing day by day and they are knowing the importance of SNS in the modern era. Page 94
  • 95. Social Media’s Influence in Purchasing Decisions at USASeeking opinion through Social Networking Sites Table No: 3.13 Response No of respondent Percentage Yes 78 78 No 22 22 Source: Primary DataFigure No: 3.13 No: of Respondent 22 Yes 22 No 78Inference:  78% of respondents say that before purchasing service/product they seek the opinion of their social networking friends  22% responded negatively to this statement.  The analyzed result shows that most of the people now a day’s seeks the opinion of their Social networking friends before going ahead with any kind of purchasing.  This shows the new market area for the modern business. Page 95
  • 96. Social Media’s Influence in Purchasing Decisions at USABenefits from Social Networking Sites as a buyer Table No: 3.14 Responses No: of Respondents Percentage Getting user reviews 47 47 Offers from the company 14 14 More communications 24 24 Updates of the products/service 15 15 Source: Primary DataFigure No: 3.14 No: of respondent Getting user reviews 15 47 Offers from the company 24 14 More Communication Updates of the products/serviceInference:  47% of respondents uses SNS for getting user reviews before purchasing a product/service  24% of respondents uses SNS for communicating more regarding the various features of the product/service, brands, specification, etc.  We can infer that SNS plays a important role as a word of mouth in the market area of any company providing products/services. Page 96
  • 97. Social Media’s Influence in Purchasing Decisions at USANegative impact from Social Networking sites Table No: 3.15 Response No of respondent Percentage Yes 13 13 No 87 87 Source: Primary DataFigure No: 3.15 No: of Respondent 13 87 Yes NoInference:  87% respondents said that networking sites have not created any negative impact in their purchasing of any product / service.  Only a small group of 13% of respondent has got negative impact due to the influence of Social networks.  From this we can infer that SNS are having more advantages than negative aspect when it comes in the case of making purchasing decisions. Page 97
  • 98. Social Media’s Influence in Purchasing Decisions at USASocial Networking Sites influences purchasing decision Table No: 3.16 Response No of respondent Percentage Strongly disagree 4 4 Disagree 12 12 Neither disagree nor agree 7 7 Agree 49 49 Highly agree 28 28 Source: Primary DataFigure No: 3.16 120 100 49 80 60 28 49 Percentage 40 No: of respondent 12 28 20 7 4 12 4 7 0 Strongly Disagree Neither Agree Strongly Disagree agree nor Agree disagreeInference:  49% of respondent agreed that they feel that the social Networking sites influences their purchasing decision  28% of respondent strongly agreed to the statement  We can reach to a conclusion that SNS plays an important role in influencing people purchase decision Page 98
  • 99. Social Media’s Influence in Purchasing Decisions at USALevel of respondents satisfaction through purchasing the product /renderingservice through networking Table No: 3.17 Response No of respondent Percentage Highly Satisfied 55 55 Satisfied 36 36 Less Satisfied 9 9 Source: Primary DataFigure No: 3.17 9 Highly Satisfied Satisfiedd 36 55 Less SatisfiedInference:  55% of respondents are highly satisfied with purchasing the product /rendering service through networking  36% of respondents are satisfied with purchasing the product /rendering service through networking  Only 9% of respondent said that they were less satisfied with purchasing the product/rendering service through networking  SNS offers a new era of satisfied customers through networking market.Influenced by the presence of brand/organisation in Social networking sites Page 99
  • 100. Social Media’s Influence in Purchasing Decisions at USA Table No: 3.18 Response No of respondent Percentage Strongly disagree 13 13 Disagree 9 9 Neither disagree nor agree 30 30 Agree 35 35 Highly agree 13 13 Source: Primary DataFigure No: 3.18 Strongly Agree 13 13 Agree 35 35 Neither agree nor disagree 30 30 Percentage Disagree 9 9 No: of respondent Strongly Disagree 13 13 0 5 10 15 20 25 30 35Inference:  From the analyzed result we can infer that 35% of the respondent thinks that a brand/organisation being on a social network influences the purchasing decision of others.  But 30% of respondents are still confused whether a brand/organisation merely being on a social network can influence the purchasing decision of the buyers. Page 100
  • 101. Social Media’s Influence in Purchasing Decisions at USACross tabulationChi Square Neither Factors Strongly Disagree disagree Agree Highly Total disagree nor agree agree Advantages of 4 11 18 35 32 100 using Social Networking Sites Comfortable in 16 17 3 36 28 100 making purchasing decision Influence in purchasing decision 13 9 30 35 13 100 by orgn. presence in Social Networking sites 33 37 51 106 73 300H0: There is no significant relationship between the advantages, user comfort level andthe influencing factors of Social Networking sites for making a purchasing decisionthrough social networking sitesH1: There is a significant relationship between the advantages, user comfort level andthe influencing factors of Social Networking sites for making a purchasing decisionthrough social networking sitesCalculations:Expected frequency = (C.T X R.T)/G.T(33 X 100)/300 = 11(37 X 100)/300 = 12.33(51 X 100)/300 = 17(106 X 100)/300 = 35.33(73 X 100)/300 = 24.33 Page 101
  • 102. Social Media’s Influence in Purchasing Decisions at USAObserved ExpectedFrequency Frequency (O-E)2 (O-E)2/E 4 11 49 4.4546 11 12.33 1.7689 0.1434 18 17 1 0.0589 35 35.33 0 0.0031 32 24.33 58.8289 2.4179 16 11 25 2.27273 17 12.33 21.8089 1.76876 3 17 196 11.5294 36 35.33 0.4489 0.01271 28 24.33 13.4689 0.5536 13 11 4 0.3637 9 12.33 11.0889 0.8993 30 17 169 9.9412 35 35.33 0.1089 0.0031 13 24.33 128.368 5.2762 9 39.6986 Page 102
  • 103. Social Media’s Influence in Purchasing Decisions at USACalculated Value = 39.6986Table Value = 18.307Degree of Freedom = (r-1) (c-1) = (3-1) (5-1) = 10Level of Significance = 5%Calculated Value > Table value. So we reject H0.There is a significant relationship between the advantages, user comfort level and theinfluencing factors of Social Networking sites for making a purchasing decision throughsocial networking sites Page 103
  • 104. Social Media’s Influence in Purchasing Decisions at USARespondents’ reactions towards purchase of products/services after readingtheir reviews online Table No: 3.19 Response No of respondent Percentage Consistently 9 9 Usually 22 22 Often 26 26 Sometimes 36 36 Seldom 7 7 Source: Primary DataFigure No: 3.19 No: of respondent 26 consistently 36 Usually 43 Often Sometimes 22 7 Seldom 9Inference:  Only 7% of respondent said that they seldom purchase products/services after reading reviews online.  It is clear from the analyzed data that the number of online purchasing is increasing in a great increase of rate.  In the coming years the online market will boom to the peak of its grandeur. Page 104
  • 105. Social Media’s Influence in Purchasing Decisions at USAConnected to brands/organisations on social networks Table No: 3.20 Response No of respondent Percentage Yes 64 64 No 36 36 Source: Primary DataFigure No: 3.20 No: of Respondent 36 64 Yes NoInference:  64% of the respondent are following or connected to any brands/organisations on social networks.  Liking the Facebook fans page, following on Twitter are examples following or connected to any brands/organisations on social networks.  This makes the people aware about the offers, discounts, other privileges put forward by the organisations which will directly reflect in the SNS users. Page 105
  • 106. Social Media’s Influence in Purchasing Decisions at USA Chapter 4Empirical ResultsFindings  It is unmistakably clear that the users between the age group 26-45are more net savvy and tend to search/review products/ services before they make a purchase.  It’s been noticed that most respondents are employed in private sector followed by student and entrepreneurs.  It is also evident that the users who work in the private sector stay online longer than compared to others.  It is clear that the majority of the respondents are mainly from Metro followed by city and town.  Age does not play a vital role in how often you purchase online after reading reviews by experts/users.  From the analysis we can find out that most of the people purchase products or services online.  Online spending does play a very important role in how often you purchase online after reading reviews by experts/users.  The age group 26 to 45 years purchases product or service online more than the users falling in other groups. In this age group users purchase sometimes/often after reading the reviews online.  The users in the age group 18 to 25 are online and active but do not spend as much as the other age groups.  Respondent said that the online shopping experience has not surpassed their inline shopping experience.  Respondents agree that social media influences their decision making development and hence their purchase.  43% of the respondents use Social networking sites everyday followed by 25% thrice a week, 16% twice a week. This shows that the usage of Social networking Page 106
  • 107. Social Media’s Influence in Purchasing Decisions at USA sites is increasing enormously and their do exist a better marketing place for a product/service of an organisation. Compared to female, males are using social networking sites more. The usage of Social media is more in Post graduate followed by graduates. As the educational level increases people become more net savvy and will be focusing on building social relationship. Facebook and Twitter is the most liked Social networking sites by the marketers followed by LinkedIn. Most of the respondents said that there are advantages of using social networking sites over traditional media in purchasing a product/service. More users are feeling high level of comfort in making purchasing decision through online media. Most of the respondent openly agreed that they do seek opinion with their friends in Social networking sites before moving forward for any purchasing. Social networking sites improves customer understanding It is undoubtedly clear that Social networking sites promote products and services to a great extend. The analysis helped to understand that Social Networking sites increases brand awareness Page 107
  • 108. Social Media’s Influence in Purchasing Decisions at USARecommendations  Social media is a good platform to spread the word and it should be used properly to ensure it’s influence makes a difference. When used properly its influence will certainly lead to change.  People with high technical knowledge can be targeted via Social Networking Sites than using any other traditional marketing scenarios.  Marketers can widely use social networking sites for marketing their products and services, as the reach to the target customers is comparatively high and the cost for promotional activities are low compared to other media’s. Page 108
  • 109. Social Media’s Influence in Purchasing Decisions at USA Chapter 5Summary and ConclusionThe primary goal of this report is to identify “Social Media’s Influence in PurchasingDecisions Among Clients from USA at iSource ITES Pvt Ltd”. A social networkingweb site is an online community in which people can connect to others with similarinterests. Social networking sites (SNSes) like and Facebook attract largenumbers of mostly young users who are eager to engage with their favourite brands. Butmost marketers use traditional marketing tactics like run-of-site advertising and staticmicrosites to push messages into these networks. Instead, to realize the full value ofmarketing on SNSes, marketers should be prepared to engage in a personal relationshipwith users by providing something of value. Promotions are good in this context, buteven better are information or brand elements that users can pass on to their friends.By understanding the social network of users, firms can better understand and influenceconsumers behaviour. Social media has disrupted the way marketing has operated fordecades. It’s an exciting development, but it presents philosophical dilemmas for manycompanies. In the span of just a few years, communication has evolved from a one-wayto two-way discussion on social media platforms. As consumers have rapidly adoptedsocial media, companies have etched out their plans for effectively engaging with them.Social media is inherently risky. But like all risky endeavours, it also potentially holds awealth of positive impact that is arguably unparalleled in today’s marketing world.Taking a stance on these dilemmas and taking preventative steps to lower that risk isnot only good social media planning. It’s also good business.Consumers respond less to traditional media and advertising, and are moving towardsconsumer-to-consumer communication such as blogging, mobile messaging, comparisonshopping sites, word-of mouth marketing, and peer-to-peer networks . Research statesthat 80% of consumers trust advice from friends online, representing three times asmuch trust than via traditional media . Further, one in three Internet users visits Websites containing user-generated content to help make purchase decisions.As you connect with customers or engage in their online communities, you can alsoreceive direct feedback that will help you to better your customer experience. Feedbackmay include impressions of the brand as a whole, experiences with products andservices, convenience with the purchasing process, and even the way that people feelabout the look and usability of your website. This information can be invaluable tomaking sure that you are meeting or exceeding the expectations of your customers. Page 109
  • 110. Social Media’s Influence in Purchasing Decisions at USAWhile it is possible to receive feedback strictly about your own company and products, itis also possible to use social media marketing research to see how your customers andprospective customers feel about your business and its offerings in comparison with yourcompetition. Find out how people feel about certain specifics or about your business asa whole when compared to other organizations that are offering similar (or identical)products and services. With this information, you can strengthen the features that yourcustomers like about your business, and make alterations where they feel that yourcompany is lacking when compared to the competition. Page 110
  • 111. Social Media’s Influence in Purchasing Decisions at USABibiliography 1 Kotler & Armstrong, “Principles of Marketing”, 9th Edition, Prentice – Hall of India Private Limited, 2002 2 Kotler Philip, Marketing Management, Prentice Hall of India, Millennium Edition, 2004 3 V S Ramaswamy- S Namakumari, “Marketing Management”, 3rd Edition, MacMillan India Ltd, 2004 4 Alan Bradburne, “Practical Rails Social Networking Sites”, 2007 5 Ana M. Martínez Alemán, Katherine Lynk Wartman, “ Social Networking Sites”, 2009 6 Patrice-Anne Rutledge, The Truth about Profiting from Social Networking, 2008 7 Clara Chung, The Facebook era: tapping online social networks, 2009 8 Shiv Singh, Social Media Marketing for Dummies, 2009 9 Uma Shekaran, Research Methods for Business, Fourth Edition, John Wiley & Sons Inc, 2008 10 Philip Kotler, “Riding the Social Marketing Wave--Surfs Up!”, kotler/ Page 111
  • 112. Social Media’s Influence in Purchasing Decisions at USAANNEXURE1. Name : __________________________2. Gender : Male female3. Please indicate where you live in City Metro Town4. Education qualification Non Graduate Under graduate Post graduate5. Designation : Student Private Employee Public Employee Self-Employed6. Age : Less than 18 18-25 25-45 45-60 More than 607. Do you use any social networking sites? Yes No8. Which of the Social networking sites do you use as the part of making Purchase decisions/marketing process (You can choose more than one choice) Facebook Twitter LinkedIn MySpace Hi5 Orkut Windows Live Google Buzz None of the above9. You have identified advantages of using social networking sites over traditional media in purchasing a product/service? Strongly Disagree Disagree Neither agree nor disagree Agree Strongly Agree10. Has your online shopping surpassed your off line shopping (In-store shopping)? Yes No11. You think social network sites help you to feel comfortable in your purchasing decision Strongly Disagree Disagree Neither agree nor disagree Agree Strongly Agree12. How often do you use social networking sites for official business purposes? Once a week Twice a week Thrice a week Every day Rarely13. How long you are using social networking? Less than one year 1-5 5-10 More than 10 years Page 112
  • 113. Social Media’s Influence in Purchasing Decisions at USA14. Before purchasing service/product do you seek opinion with your social networking friends? Yes No15. How has social networking sites benefited you as a buyer? Getting User reviews Offers from the companies More communications Updates of the product/service16. Do you feel these networking sites have created any negative impact in your purchasing? Yes No17. You feel that the social Networking sites influences your purchasing decision Strongly Disagree Disagree Neither agree nor disagree Agree Strongly Agree18. Are you satisfied with purchasing the product /rendering service through networking? Highly satisfied Satisfied Less satisfied19. You think that a brand/organisation being on a social network influences the purchasing decision of others? Strongly Disagree Disagree Neither agree nor disagree Agree Strongly Agree20. How often you purchase products/services after reading their reviews online? Consistently Usually Often Sometimes Seldom21. Are you connected to any brands/organisations on social networks? (e.g., Being a Facebook fan of Pepsi or following airlines on Twitter) Yes No Thanks for your time… Page 113