The Use of Location Specific Advertisements on Facebook: Can they Help Entrepreneurs Solve Problems Associated with Banner Advertisements

This study is set up to assess the relationship between advertising based on location and effectiveness of banner ads on social networking sites. The main research question is: Is location-specific advertising more likely to overcome the problems associated with banner advertisements than non-location specific advertising on the social networking site Facebook? The research took an explanatory approach establishing causal links between the selected variables. An on-line attitudinal survey was issued to Facebook users and their responses were analyzed through quantitative statistical techniques to test the hypotheses and observe significant correlations. The conclusions drawn from the results show that Facebook is a highly used medium mostly for social purposes. However, the site users generally do not find advertisements placed on the site effective. The results also suggest that location-specific advertisements could improve consumer perceptions of effectiveness through increased relevancy and could also help increase responsiveness but only at a basic level, which includes awareness and brand recall.