How Companies Can Exploit the Commercial Value of Social Media Through Advertising

Social media advertising is becoming a winning strategy for firms, brands, and retailers (He & Shao, Telematics and Informatics, 35(2), 504–516, 2018). Statistics demonstrated the staggering growth of the global social media advertising market: Marketers’ spend on social media advertising had grown to over $89 billion in 2019; it was estimated that this ad spend would produce a yearly growth rate of over 8% and likely reach over $100 billion in 2020 (Zote, 55 critical social media statistics to fuel your 2020 strategy. Retrieved from https://sproutsocial.com/insights/social-media-statistics/, 2020). In contrast to traditional media’s limited reach capability, promotional messages on social media can connect and reach over one billion customers (Shareef et al., 2019; Schulze et al., 2014). Social media also outperforms traditional print media because it incorporates more social, informative, and interactive elements in firm–customer communication (Alalwan, International Journal of Information Management, 42, 65–77, 2018; Barreda et al., Tourism Management, 57, 180–192, 2016; Lee & Hong, International Journal of Information Management, 36(3), 360––373, 2016; Mangold & Faulds, Business Horizons, 52(4), 357–365, 2009; Swani et al., Industrial Marketing Management, 62, 77–87, 2017; Wu, Journal of Business Research, 69(11), 5310–5316, 2016). Although social media ads cannot be directly converted into sales, the promotion of such ads can be a facilitator in building customers’ awareness toward brand or product, spread brand and product-related knowledge to customers influencing customers’ brand or product perceptions, and eventually nudging customers to make purchases (Alalwan et al., Telematics and Informatics, 34(7), 1177–1190, 2017; Duffett, Internet Research, 25(4), 498–526, 2015; Kapoor et al., Information Systems Frontiers, 20(3), 531–558, 2018; Shareef et al., Journal of Retailing and Consumer Services, 43, 258–268, 2018).