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Third Sector Organizations and the Web 2.0

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An Empirical Analysis of the Impact of Network Affiliation on Brand Awareness

An Empirical Analysis of the Impact of Network Affiliation on Brand Awareness

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Third Sector Organizations and the Web 2.0 Presentation Transcript

  • 1. Università Commerciale Luigi BocconiFaculty of Management and TechnologyMaster of Science in International ManagementThird Sector Organizations and the Web 2.0 An Empirical Analysis of the Impact of Network Affiliation on Brand Awareness Advisor: Professor Clodia Vurro Discussant: Professor Angelo Russo Andrea Vanini Student ID 1450725 A.A. 2010/2011
  • 2. The Third Sector Trust and Branding The World Wide Web Model Development Results ConclusionsResearch Purposes Understanding recent trends in the third sector and in the internet contexts; Studying determinants of online brand awareness for third sector organizations websites;1. The Evidence 2. From Evidence to Curiosity 3. From Curiosity to ResearchIn Italy, third sector organizations Which are the reasons? How are In light of the recent changeshave yet to exploit the they structured? occured both in the third sectoropportunities offered by the May they share common drivers? and in the web environment, howinternet with regards to generating Which are the most recent trends? can third sector organizations gainbrand awareness. awareness through the internet? In a word, which are the ? determinants of online brand awareness for third sector Third Sector The Internet organizations websites? Third Sector The Internet Third Sector The Internet
  • 3. The Third Sector Trust and Branding The World Wide Web Model Development Results ConclusionsCurrent PerspectivesThe Third Sector is constituted by privately held, democratically structured entities that share the ultimate principle ofnot distributing profit. These, autonomously and voluntary pursue social utility by either providing private goods inresponse to market failure, or by satisfying the needs of a beyond-the-median voter in response to governmentalfailure. State & Market Failures Information Asymmetry Median Voter’s Theory The Origins Organized Third Democracy Sector Private Sector Public Sector Private Utility Social Utility Private Organizations Voluntary Autonomy Public Organizations Non-profit The Role in the Economy Social Utility The ObjectiveSource: reworked from Potůček (1999) , Hansmann (1986) and Weisbrod (1975)
  • 4. The Third Sector Trust and Branding The World Wide Web Model Development Results ConclusionsCompetition Dynamics Labour The number of social issues requiring support has prospered, while volunteers participation rates among countries remained steady. Competition Capital Third sector organizations used to rely upon public on Input contributions, but these are set to sharply diminuish in the forecoming years. Provision Donors turned into more attentive philanthrophic givers: when they assess to which organization to donate, their criteria are stringent.An new input-based perspectiveThird Sector organizations are private entities that autonomously pursue social utility and that remunerate theirfactors of production (capital and labour) primarily with the maximization of the social utility itself.Thus, the drivers through which organizations attract capital and labour (donations and volunteers) are necesarilydifferent compared with public and private sectors’ ones.
  • 5. The Third Sector Trust and Branding The World Wide Web Model Development Results ConclusionsDonors CriteriaStimuli and personal determinants have influence on the charity choices of donors Emotional & Psychological Balance Sheet Ratios Perceptual Noise Image & Reputation Administrative Efficiency Portrayal Perceived Quality Governance Quality Fit with Self Cost of Search Sustainability of Activities Missions Distances Perceptual Reactions Analytical Approach Trust & Awareness The scarce availability of reliable data on many small to medium third sector organizations balance sheets (if they really have one) makes the analytical approach not applicable in our reference country, Italy.The Thrust of TrustThird sector organizations have to gain donors’ trust in order to be eligible for donations: increase perceived quality,reduce cost of search, match the right potential donors.An effective way they can do so is “building a brand”.
  • 6. The Third Sector Trust and Branding The World Wide Web Model Development Results ConclusionsThe Value of a BrandBrand improves perceived quality, promotes loyalty, increases revenues and margins, generates trust: unluckily, itcannot be easily built in a day. Creating brand awareness represents the preliminary step for developing trust, and maysoon represent a binding stage for the survival and growth of many third sector organizations. Intense, active loyalty Available Branding Channels Offline Word of Mouth Strong, favourable and unique brand associations Direct Marketing Mass Media Advertising Deep, broad brand awareness The Web OpportunityThe Web OpportunityThe combination of generally low design costs and very high potential reach makes the online choice practicallymandatory for all the sectors nowadays, including the third one. Yet more, it represents an accessible tool for smallentities to engage with users, other organizations and potential donors, and to cope with the increased competition ininput provision.Source: reworked from Keller’s Brand Resonance Pyramid (2009)
  • 7. The Third Sector Trust and Branding The World Wide Web Model Development Results Conclusions A read-only Web We can view the first stage of the World Wide Web (Web 1.0) as a giant mall: shoppers have limited time and huge number of store alternatives in competition with each other to capture their attention. The most popular websites attracted surfers like the stores in the mall attracted shoppers: with a visible location and massive advertising. Tags: Visibilty AdvertisingWebsite Website Website Website Website Website Website WebWebsite Website Website Website Website Website Website Web Search Engine Website Visibility Index Search Engine Positioning (Disseminate Hyperlinks) (Primacy in Search Results) 1.0 Online Awareness Determinants Source: reworked from Drèze and Zufryden (2004) Get Visible
  • 8. The Third Sector Trust and Branding The World Wide Web Model Development Results ConclusionsA read&write WebThe web today is much closer to a multifaceted platform in which the user represents the gravitational centre.Internet traffic passes through social networks, in which trust rules relationships and interactivity plays an importantrole. Getting visible is necessary but no longer sufficient to generate awareness in the current internet context.Tags: Social Networks Trust Interactivity Website Website Website Website Website Website Website Website Website Website Website Website Search Engines Blogs Twitter Website Website Website Website Website Facebook Wiki Website Website 2.0 Online Awareness Determinants Website Get Involved
  • 9. The Third Sector Trust and Branding The World Wide Web Model Development Results ConclusionsThe Research QuestionIn light of the dramatic transformations occurred both in the web environment and in the third sector, we aimed atexplaining the determinants of online awareness with specific regards to third sector organizations. Hereby we setthe hypotheses of the empirical model on which we base our investigation. The Structural Hypotheses Hypothesis 1 We posit that the following structural characteristics of websites have Website Longevity (age), since positive impact on online awareness. building a brand is a time- consuming process. Hypothesis 3 Hypothesis 4 Hypothesis 2 Frequency of Content Amount and Reputation Website Size, since consumers Update, since the current of Bridges that a website trust more the big organizations. internet scenario rewards has settled with other content recency. websites. Trust & Branding Content Recency Reputation
  • 10. The Third Sector Trust and Branding The World Wide Web Model Development Results ConclusionsThe Research QuestionIn light of the dramatic transformations occurred both in the web environment and in the third sector, we aimed atexplaining the determinants of online awareness with specific regards to third sector organizations. Hereby we setthe hypotheses of the empirical model on which we base our investigation. People (Users, Donors, The Network Hypotheses Volunteers) We posit that the following network embeddedness measures of websites have positive impact on online awareness. Hypothesis 5 Public Third Sector Other Third Sector Administration Organizations Organizations The Degree of Involvement of an organization in the third sector Online Interorganizational Networks. Hypothesis 6 The Degree of Involvement of a third sector organization in Public Third Sector Other Third Sector Administration Organizations Organizations the informal Online Public Administration Network. Websites H Websites Websites H5 Hypothesis 7 6 The Degree of Involvement of a third sector organization in the informal Blogosphere Network. Blogosphere (People) H7
  • 11. The Third Sector Trust and Branding The World Wide Web Model Development Results ConclusionsThe Model VariablesTaking into account the above mentioned assumptions, we hereby set the variables for the empirical model. Dependent Variable Monthly Website VisitorsThe Structure The Networks Interactions & Controls Age  TSOs  TSONetTraffic_PRWebsite’s online presence in years Third Sector Organization Network Traffic Exchange b/w TSOs * PR Size  CSSPs  PagesPerYearNumber of indexed pages Public Administration Network Number of Pages / Age Frequency  Blogosphere  Domain (.it, .org)Frequency of contentupdates People Online Community Dummy variable: .it, .org PageRank (PR)  ProvinceGoogle’s PageRank (from 1 to 10) We performed Social Network Analysis Dummy variable: MI, BG, BS, etc. for the hyperlink-based networks above. Each web link counts as 1 connection.  Facebook The chosen centrality measure is the Dummy variable: Y/N Profile Eigenvector.
  • 12. The Third Sector Trust and Branding The World Wide Web Model Development Results ConclusionsThe Sample146 Italian third sector organizations’ websites, retrieved from online regional database.The MethodLinear Regression Model adopting a Stepwise procedure.The Period under studyWe collected data relative to the average 1-month web site activity, based on a sum of the unique visitors, in theperiod May-July 2011. The underlying model can be represented by the following formula:yi = β0 ∙INTERCEPT + β1 ∙AGE +β ∙SIZEi +β3 ∙FREQUENCY +β4 ∙PAGERANK +β ∙DOMAIN+β6 ∙PROVINCE+β7 ∙TSOs i 2 i i 5 i+ β8 ∙BLOGOSPHERE + β ∙CSSPsi + β10 ∙FACEBOOKi +β11 ∙TSONETTRAFFIC_PR + β ∙PAGESPERYEAR+ εi i 9 i 12 ∀i=1,…,N; for N=146Blue refers to structural hypotheses, red to control variables, green to network embeddedness measures
  • 13. The Third Sector Trust and Branding The World Wide Web Model Development Results ConclusionsThe Model ResultsThe Regression yields a satisfactory value for the Adjusted R2: the independent variables that have a positive impacton monthly web traffic performances for third sector organizations’ websites are: Blogosphere, Pagerank and Size. Regression Statistics Variable Unstd. Coefficients Std. Coefficients Std. Error t Stat Sig. R2 0,507 Intercept -3.105,674 1.784,661 -1,740 ,084 Adjusted R2 0,497 Blogosphere 162,778 19,042 ,590 8,548 ,000 Observations 146 PageRank 1.027,122 446,455 ,158 2,301 ,023 Size ,078 ,039 ,119 2,005 ,047H2 Website’s Size SupportedThe bigger the website, the higher the amount of users who know of its exixtence;H4 Amount and Reputation of Bridges SupportedThe more and the better connections websites establish with other websites, the higher its brand awareness;H7 Blogosphere’s Involvement SupportedThe more a third sector organizations’ website is involved in the blogs’ network, the higher its brand awareness;
  • 14. The Third Sector Trust and Branding The World Wide Web Model Development Results ConclusionsThe Managerial ImplicationsFrom research results to strategic options: The Challenge The Means The Determinants Generate Brand The Internet is at the forefront Online awareness depends upon Awareness among of marketing activities aimed the degree of involvement of a Users, Donors, at generating awareness in all website with the Blogosphere, its Volunteers. the sectors. PageRank, its Size. The Strategies Third Sector Organizations should intensively interact with existing online communities. To Blog Participate Corporates use blogs to restore personal relationship Individuate influent blogs and advocate with customers and to renovate trust. Third sector its own brand on the blogs themselves, organizations may have to follow the same path. commenting and responding to users.
  • 15. The Third Sector Trust and Branding The World Wide Web Model Development Results Conclusions Q&A
  • 16. Sample’s OrganizationsPublic Administration Offices
  • 17. Sample’s OrganizationsBlogs