Running Head: Investment by Retail Industry on Facebook Sponsored Ads and Conversion
Ratio
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Title: Investment by Retail Industry on Facebook Sponsored Ads and Conversion Ratio
Student
University
Lecturer
Date
Investment by Retail Industry on Facebook Sponsored Ads and Conversion Ratio
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Table of Contents
Problem statement ................................................................................................................................. 3
Aims and objectives ................................................................................................................................ 4
Brief methodology .................................................................................................................................. 4
Data analysis technique .......................................................................................................................... 4
References .............................................................................................................................................. 6
Investment by Retail Industry on Facebook Sponsored Ads and Conversion Ratio
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Problem statement
Facebook has become one of the largest advertising platforms for business organizations as
there are around 2.3 billion monthly active users on the social media network. This offers an
enormous opportunity for different industries to target and engages newer audience through ad
conversion (Lin, 2016). As per statistics, the number of Facebook ads have doubled in the last
18 months, which describes the success of Facebook advertisement and the benefit it offers to
the business industries. There are different types of Facebook ads available, however, Facebook
sponsored ads is considered as the best social media advertising platform, which refers to the
basic form of Facebook ads that is visible to a larger audience due to extreme targeting and
powerful metrics (Tran, 2017). In Retail Industry, expenditure on Facebook sponsored ads has
been increasing in the last few years due to the large audience of Retail Industry on the
platform. The average click-through rate (CTR) for the Facebook sponsored ads is 1.59% with
an average cost per click of $0.70. There are numerous reasons why the Retail Industry is
investing heavily in the Facebook sponsored advertisements, of which, the main reason is that
people spend a great amount of time on Facebook, making them a potential customer
(Bairakimova, 2017). Apart from that, it is a highly cost-efficient way to reach millions of
people where targeting is extremely simple (Nguyen, 2018). The Retail Industry can easily
target people based on their purchasing behaviour and can also customise their audience to
generate leads and develop loyalty. Remarketing is under reason the retail industry is utilizing
Facebook sponsored ads as it shows that advertisement to the people who have previously
visited your website or application (Sungwook Shim, 2016). When it comes to order conversion
rate, the average conversion rate for the Retail Industry is 3.26%, which means more than three
personal become the retail customer out of hundred which is extremely beneficial for the
industry (Thongmak, 2015).
Investment by Retail Industry on Facebook Sponsored Ads and Conversion Ratio
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Aims and objectives

The main objective of the study is to identify and investigate the importance of
Facebook sponsored ads and how much the Retail Industry is spending on these ads to
engage more customers.
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The research is also aimed at understanding the order conversion ratio of these ads and
how much increment in the revenue and sales have been witnessed in Retail Industry
through these ads (Bairakimova, 2017).

Another purpose of the study is to learn the buying behaviour of the consumers in the
Retail Industry and develop marketing strategies accordingly (Zhu, 2015).
Brief methodology
The research study will be performed by collecting data using secondary research which will
include industry sources, articles and journals along with statistical data regarding Facebook
advertisement in order to understand the order conversion ratio of Facebook sponsored ads in
Retail Industry (Kim et al, 2014). Interviews will also be conducted on a large number of people
with different questionnaires regarding what they feel about Facebook sponsored ads and if
they had ever purchased any retail product through these advertisement.
Data analysis technique
The data analysis technique that will be used to conduct the study will be secondary data which
will be collected from the retail database such as Martec's database. Apart from that,
information will be used from different online services to understand the benefits and
drawbacks of Facebook sponsored advertisement and how much the Retail Industry invest in
them (Spiegler, 2016). The interviews and surveys will be conducted on various demographic
which include different geographical location, people of different ages and gender with
Investment by Retail Industry on Facebook Sponsored Ads and Conversion Ratio
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different income range. Annual reports of leading retail companies will be analysed to identify
the expenditure on Facebook advertisements and the return on investment from it (Sungwook,
2016).
Investment by Retail Industry on Facebook Sponsored Ads and Conversion Ratio
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References
Lin, C. A., & Kim, T. (2016). Predicting user response to sponsored advertising on social media
via the technology acceptance model. Computers in Human Behavior, 64, 710-718.
Nguyen, H. (2018). Facebook Marketing for Fashion Industry.
Thongmak, M. (2015, June). Engaging Facebook users in brand pages: Different posts of
marketing-mix information. In International Conference on Business Information
Systems(pp. 299-308). Springer, Cham.
Bairakimova, K., & Quiroga Arkvik, I. (2017). Marketing and Facebook: How fashion
companies promote themselves on Facebook.
Weintraub, M. (2015). Killer facebook ads: master cutting-edge facebook advertising
techniques. John Wiley & Sons.
Zhu, Y. Q., & Chen, H. G. (2015). Social media and human need satisfaction: Implications for
social media marketing. Business horizons, 58(3), 335-345.
Kim, D., Kim, J. H., & Nam, Y. (2014). How does industry use social networking sites? An
analysis of corporate dialogic uses of Facebook, Twitter, YouTube, and LinkedIn
by industry type. Quality & Quantity, 48(5), 2605-2614.
Spiegler, E. D., Hildebrand, C., & Michahelles, F. (2016). Social networks in pervasive
advertising and shopping. In Pervasive advertising (pp. 207-225). Springer,
London.
Sungwook Shim. (2016). The Study on the Effect on Social Native ads : Facebook Sponsored
Advertising. Journal Of Practical Research In Advertising And Public
Relations, 9(3), 26-48. doi: 10.21331/jprapr.2016.9.3.002
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Tran, T. (2017). Personalized ads on Facebook: An effective marketing tool for online
marketers. Journal Of Retailing And Consumer Services, 39, 230-242. doi:
10.1016/j.jretconser.2017.06.010