The impact of user-generated content on Facebook advertising performance

Abstract

Social media have strengthened the role of each consumer who have now multiple ways to create content, through product reviews, and rates, for instance. These contents, also known as user-generated content (UGC) have become one of the most important communication channels about brands, since, through it, peers can greatly influence other consumers in their purchase decisions. Particularly on social networks, namely on Facebook, UGC, which may take the form of post likes, post comments, shares and page mentions, is rapidly diffused among Facebook friends, making users that were not initially targeted by companies being exposed to their advertising campaigns. This dissertation analyzes the individual impact that Facebook UGC has on advertising performance. The findings from our research complement the academic literature and support the importance of social WOM for companies’ advertising performance. Also, firms can use our results in order to optimize their Facebook advertising campaigns and thus achieve better results. In particular, firms should engage Facebook followers to interact through post likes and post shares. However, we conclude that post comments are not a driver of Facebook advertising performance. On the other hand, several content design decisions should be undertaken by companies. Our analysis suggests that using a sense of urgency on the post image has a positive impact on advertising performance, whereas the same content written on the post description is expected to negatively impact advertising performance. Additionally, our research shows that writing a discount price or a discount percentage on post images also contributes to advertising performance.

Date of Award	12 May 2016
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Ana Isabel de Almeida Costa (Supervisor)