Third Sector Organizations and the Web 2.0

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

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Third Sector Organizations and the Web 2.0

  1. 1. Third Sector Organizations and the Web 2.0 An Empirical Analysis of the Impact of Network Affiliation on Brand Awareness Università Commerciale Luigi Bocconi Faculty of Management and Technology Master of Science in International Management Andrea Vanini StudentID 1450725 A.A. 2010/2011 Advisor: Professor Clodia Vurro Discussant: Professor Angelo Russo
  2. 2. The Third Sector Trust and Branding The World Wide Web Model Development Results Conclusions 1.The Evidence In Italy, third sector organizations have yet to exploit the opportunities offered by the internet with regards to generating brand awareness. Third Sector The Internet Research Purposes  Understanding recent trends in the third sector and in the internet contexts;  Studying determinants of online brand awareness for third sector organizations websites; 2.From Evidence to Curiosity Which are the reasons? How are they structured? May they share common drivers? Which are the most recent trends? ? Third Sector The Internet 3.From Curiosity to Research In light of the recent changes occured both in the third sector and in the web environment, how can third sector organizations gain awareness through the internet? In a word, which are the determinants of online brand awareness for third sector organizations websites? Third Sector The Internet
  3. 3. The Third Sector Trust and Branding The World Wide Web Model Development Results Conclusions The Objective The Role in the Economy The Origins Private Sector Private Utility Private Organizations Information Asymmetry Public Sector Social Utility Public Organizations Median Voter’s Theory Non-profit AutonomyVoluntary Third Sector DemocracyOrganized State & Market Failures Social Utility Current Perspectives The Third Sector is constituted by privately held, democratically structured entities that share the ultimate principle of not distributing profit. These, autonomously and voluntary pursue social utility by either providing private goods in response to market failure, or by satisfying the needs of a beyond-the-median voter in response to governmental failure. Source: reworked from Potůček (1999) , Hansmann (1986) and Weisbrod (1975)
  4. 4. The Third Sector Trust and Branding The World Wide Web Model Development Results Conclusions Competition Dynamics An new input-based perspective Third Sector organizations are private entities that autonomously pursue social utility and that remunerate their factors 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 necesarily different compared with public and private sectors’ ones. The number of social issues requiring support has prospered, while volunteers participation rates among countries remained steady. Third sector organizations used to rely upon public contributions, but these are set to sharply diminuish in the forecoming years. Donors turned into more attentive philanthrophic givers: when they assess to which organization to donate, their criteria are stringent. Competition on Input Provision Labour Capital
  5. 5. Donors Criteria Stimuli and personal determinants have influence on the charity choices of donors The Thrust of Trust Third 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”. The Third Sector Trust and Branding The World Wide Web Model Development Results Conclusions Perceptual Reactions Emotional & Psychological Perceptual Noise Portrayal Fit with Self Trust & Awareness Image & Reputation Perceived Quality Cost of Search Missions Distances Analytical Approach Balance Sheet Ratios Administrative Efficiency Governance Quality Sustainability of Activities 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.
  6. 6. The Value of a Brand Brand improves perceived quality, promotes loyalty, increases revenues and margins, generates trust: unluckily, it cannot be easily built in a day. Creating brand awareness represents the preliminary step for developing trust, and may soon represent a binding stage for the survival and growth of many third sector organizations. The Web Opportunity The combination of generally low design costs and very high potential reach makes the online choice practically mandatory for all the sectors nowadays, including the third one. Yet more, it represents an accessible tool for small entities to engage with users, other organizations and potential donors, and to cope with the increased competition in input provision. The Third Sector Trust and Branding The World Wide Web Model Development Results Conclusions Intense, active loyalty Strong, favourable and unique brand associations Deep, broad brand awareness Offline Word of Mouth Mass Media Advertising Direct Marketing The Web Opportunity Available Branding Channels Source: reworked from Keller’s Brand Resonance Pyramid (2009)
  7. 7. 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: The Third Sector Trust and Branding The World Wide Web Model Development Results Conclusions Website Website WebsiteWebsiteWebsite Website Website Website Website Website Website Website Search Engine Website Website Web Web Search Engine Positioning (Primacy in Search Results) Website Visibility Index (Disseminate Hyperlinks) 1.0 Online Awareness Determinants Get VisibleSource: reworked from Drèze and Zufryden (2004) Visibilty Advertising
  8. 8. A read&write Web The 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 important role. Getting visible is necessary but no longer sufficient to generate awareness in the current internet context. Tags: The Third Sector Trust and Branding The World Wide Web Model Development Results Conclusions Facebook Blogs Wiki Twitter Search Engines Website Website Website Website Website Website Website Website Website Website Website Website Website Website Website Website Website WebsiteWebsite Website 2.0 Online Awareness Determinants Get Involved Social Networks Trust Interactivity
  9. 9. The Research Question In light of the dramatic transformations occurred both in the web environment and in the third sector, we aimed at explaining the determinants of online awareness with specific regards to third sector organizations. Hereby we set the hypotheses of the empirical model on which we base our investigation. The Third Sector Trust and Branding The World Wide Web Model Development Results Conclusions Reputation Hypothesis 4 Amount and Reputation of Bridges that a website has settled with other websites. Content Recency Hypothesis 3 Frequency of Content Update, since the current internet scenario rewards content recency. Hypothesis 1 Website Longevity (age), since building a brand is a time- consuming process. Hypothesis 2 Website Size, since consumers trust more the big organizations. The Structural Hypotheses We posit that the following structural characteristics of websites have positive impact on online awareness. Trust & Branding
  10. 10. The Research Question In light of the dramatic transformations occurred both in the web environment and in the third sector, we aimed at explaining the determinants of online awareness with specific regards to third sector organizations. Hereby we set the hypotheses of the empirical model on which we base our investigation. The Third Sector Trust and Branding The World Wide Web Model Development Results Conclusions Public Administration Third Sector Organizations People (Users, Donors, Volunteers) Other Third Sector Organizations The Network Hypotheses We posit that the following network embeddedness measures of websites have positive impact on online awareness. Hypothesis 5 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 the informal Online Public Administration Network. Hypothesis 7 The Degree of Involvement of a third sector organization in the informal Blogosphere Network. Public Administration Websites Third Sector Organizations Websites Blogosphere (People) Other Third Sector Organizations Websites H5 H7 H6
  11. 11. The Model Variables Taking into account the above mentioned assumptions, we hereby set the variables for the empirical model. Interactions & Controls  TSONetTraffic_PR Traffic Exchange b/w TSOs * PR  PagesPerYear Number of Pages / Age  Domain (.it, .org) Dummy variable: .it, .org  Province Dummy variable: MI, BG, BS, etc.  Facebook Dummy variable: Y/N Profile We performed Social Network Analysis for the hyperlink-based networks above. Each web link counts as 1 connection. The chosen centrality measure is the Eigenvector. The Networks  TSOs Third Sector Organization Network  CSSPs Public Administration Network  Blogosphere People Online Community The Structure  Age Website’s online presence in years  Size Number of indexed pages  Frequency Frequency of contentupdates  PageRank (PR) Google’s PageRank (from 1 to 10) The Third Sector Trust and Branding The World Wide Web Model Development Results Conclusions Dependent Variable Monthly Website Visitors
  12. 12. The Sample 146 Italian third sector organizations’ websites, retrieved from online regional database. The Method Linear Regression Model adopting a Stepwise procedure. The Period under study We collected data relative to the average 1-month web site activity, based on a sum of the unique visitors, in the period May-July 2011. The underlying model can be represented by the following formula: yi= β0∙INTERCEPT + β1∙AGE i +β 2 ∙SIZEi +β3∙FREQUENCY i +β4∙PAGERANK i +β 5 ∙DOMAIN+β6∙PROVINCE+β7∙TSOs i + β8∙BLOGOSPHERE i + β 9 ∙CSSPsi + β10∙FACEBOOKi+β11∙TSONETTRAFFIC_PR i + β 12 ∙PAGESPERYEAR+ εi ∀i=1,…,N; for N=146 The Third Sector Trust and Branding The World Wide Web Model Development Results Conclusions Blue refers to structural hypotheses, red to control variables, green to network embeddedness measures
  13. 13. The Model Results The Regression yields a satisfactory value for the Adjusted R2: the independent variables that have a positive impact on monthly web traffic performances for third sector organizations’ websites are: Blogosphere, Pagerank and Size. H2 Website’s Size Supported The bigger the website, the higher the amount of users who know of its exixtence; H4 Amount and Reputation of Bridges Supported The more and the better connections websites establish with other websites, the higher its brand awareness; H7 Blogosphere’s Involvement Supported The more a third sector organizations’ website is involved in the blogs’ network, the higher its brand awareness; The Third Sector Trust and Branding The World Wide Web Model Development Results Conclusions Variable Unstd. Coefficients Std. Coefficients Std. Error t Stat Sig. Intercept -3.105,674 1.784,661 -1,740 ,084 Blogosphere 162,778 19,042 ,590 8,548 ,000 PageRank 1.027,122 446,455 ,158 2,301 ,023 Size ,078 ,039 ,119 2,005 ,047 Regression Statistics R2 0,507 Adjusted R2 0,497 Observations 146
  14. 14. The Third Sector Trust and Branding The World Wide Web Model Development Results Conclusions The Managerial Implications From research results to strategic options: The Strategies Third Sector Organizations should intensively interact with existing online communities. Generate Brand Awareness among Users, Donors, Volunteers. The Challenge The Internet is at the forefront of marketing activities aimed at generating awareness in all the sectors. The Means Online awareness depends upon the degree of involvement of a website with the Blogosphere, its PageRank, its Size. The Determinants Participate Individuate influent blogs and advocate its own brand on the blogs themselves, commenting and responding to users. To Blog Corporates use blogs to restore personal relationship with customers and to renovate trust. Third sector organizations may have to follow the same path.
  15. 15. The Third Sector Trust and Branding The World Wide Web Model Development Results Conclusions Q&A
  16. 16. Sample’s Organizations Public Administration Offices
  17. 17. Sample’s Organizations Blogs

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