Effectiveness of advertisements featuring social context on social network sites: an investigation of effects of tie strength-moderated interaction between reward type for advertising recommenders’ i

Abstract

Nowadays, SNSs have emerged as an optimal marketing platform for companies to generate positive eWOM. However, most businesses with advertising-based model on SNSs have not succeeded significantly yet. This paper focused on an advertisement featuring social context on SNSs shown to friends of users who are engaging with brand, investigated the impact of three critical factors on SNS advertising effectiveness - reward type for advertising recommenders’ intention, product type on advertisements, and tie strength. A 2 × 2 factorial design was used to test the interaction effects between the two variables, reward type and product type on advertisements, moderated by tie strength. The results indicate that strong-tie recommenders are more effective than weak-tie recommenders on all combinations of reward type and product type. In addition, hedonic product advertisements for non-monetary reward generate the highest advertising effectiveness, and utilitarian product advertisements for non-monetary reward generate the lowest advertising effectiveness. Based on these results, theoretical and practical implications were provided to refine marketing environments on SNSs.