Social Networks: Usage Intensity and Effects on Personalized Advertising

The increasing popularity of social media has significantly changed user behavior and companies’ possibilities to engage in personalized advertising (targeted advertising based on user’s personal characteristics and preferences). Accordingly, there is a growing interest in the subject for business and scientific research. While the body of literature about social media grows in general, it surprisingly lacks studies about personalized advertising in social media and the associated social networks. Based on uses and gratifications theory, the current study therefore investigates factors which influence Facebook members’ usage intensity, as well as the relationship between this intensity and members’ approval of personalized Facebook ads. Furthermore, it also examines members’ word-of-mouth intention with regard to the advertised products or services, and examines how usage intensity and members’ approval of personalized advertising impact this intention. Based on a survey of 201 Facebook members, the study finds that Internal Core Functions, Need for Data Privacy, Need for New Friends and Need for Social Self-Portrayal show significant positive effects on Usage Intensity. In addition, the structural equation modeling approach confirms the impact of Usage Intensity on Approval of Personalized Facebook Ads and Word-of-Mouth Intention, which mediates the relationship between Usage Intensity and Word-of-Mouth Intention.