Understanding Factors That Affect Social Media Advertisement Adoption for Small Medium Enterprises in Indonesia the Case of Facebook Advertisement

Abstract

Advancement of technology in the field of marketing has been one significant factor in assisting Small Medium Enterprises (SMEs) to increase their competitiveness. Meta, as a technological company, provide Facebook advertisement as a mean of digital social media advertising. One of the challenges that Meta faced is to attract more Facebook ads adoption especially in the Small Medium Enterprise sector. This research objective is to understand the factors that affect social media advertisement adoption, in this case Facebook advertisement, for small medium enterprises in Indonesia. There are eight variables that are believed to influence customer intention to adopt Facebook advertisement which are performance expectancy, effort expectancy, social influence, facilitating condition, hedonic motivation, price value, perceived technology security and self-efficacy. The main data was collected by an online survey and 350 SMEs participated in it. The respondents are SMEs that operate in Indonesia and either have not use Facebook advertisement service or do not use the service anymore. The sample was gathered using non-probability convenience sampling and the data was analysed using structural equation model technique. The research found that Self-efficacy is the highest influencing variable that are statistically significant to influence SMEs intention to adopt Facebook advertisement. Effort expectancy and social influence are found to be statistically significant to influence SMEs intention to adopt Facebook advertisement. Hedonic motivation and price value factor are found to be statistically significant to influence intention to adopt Facebook ads for SMEs that have use the service but choose not to use it anymore. In the contrary, the factor of performance expectancy, facilitating condition and perceived technology security are found to be not statistically significant to influence intention to adopt Facebook ads among Indonesia SMEs. The research suggests Meta to prioritize an effort to increase SMEs self-efficacy in using Facebook advertisement by giving free training and certification. Other suggestions are to partner with relevant key opinion leaders (KOL)/communities, creating engagement with SMEs through events and giving monetary incentives such as discount coupons. For future research, researcher suggest different/smaller respondent demography and/or different social media advertising platform. Research with respondent that are actively using Facebook advertising service could also give additional insight to the study.