Running Head: Investment by Retail Industry on Facebook Sponsored Ads and Conversion Ratio 1 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 2 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 3 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 4 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. 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 5 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 6 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 Investment by Retail Industry on Facebook Sponsored Ads and Conversion Ratio 7 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