Segmenting consumers based on social media advertising perceptions: How does purchase intention differ across segments?

Abstract

Digitalization, personalization and globalization shape how companies contact and communicate with their consumers who have different needs and wants. In these highly competitive heterogeneous markets, it becomes crucial to reach consumers in an easy, low-cost and more targeted manner. Social media advertising is one of the effective ways of attracting potential customers, retaining attention of current customers and influencing them through persuasive content. Despite its plentiful and obvious advantages, the variation among consumers’ responses to social media advertising remains as a major challenge. Hence, this study aims to identify different consumer segments based on the social media advertising features, discover differences in their individual traits, and examine variation among those segments in terms of the factors that predict their purchase intentions. By utilizing cluster analysis, consumers are segmented according to their perceptions regarding social media advertising features: perceived relevance, performance expectancy, hedonic motivation, informativeness, and interactiveness. It is revealed that consumers are grouped under three segments, namely: “susceptible”, “dispassionate”, and “impervious”. It is found that there are statistically significant differences among these segments in terms of being easily persuaded, impulse buying tendency, self-confidence, and social network proneness in which consumers in “susceptible” segment are more easily persuaded, have high level of self-confidence, have more impulse buying tendency, and are more prone to social networks when compared to other groups. It is also discovered that there are differences among these segments in terms of the factors that determine their purchase intentions for the products presented in social media advertising. The purchase intention of consumers in “susceptible” segment for products exhibited in social media advertising, is determined by perceived relevance, ease of being persuaded, self-confidence and social network proneness. On the other hand, the purchase intention of consumers in the “dispassionate” segment is shaped by informativeness, ease of being persuaded, and social network proneness. Finally, the purchase intention of consumers in “impervious” segment is influenced by hedonic motivation, perceived relevance, impulse buying tendency, and ease of being persuaded. Nevertheless, when the whole sample is considered, it is observed that consumers’ purchase intentions for the products and services presented in social media advertising are influenced by the following factors: perceived relevance, performance expectancy, informativeness, impulse buying tendency, ease of being persuaded, and social network proneness. Understanding differences across segments can help companies design, manage and convey their social media advertising campaigns to their target audience in a convincing, timely, effective, and efficient way, which in turn, let them gain competitive advantage in highly volatile and dynamic markets.