Masaryk University

Faculty of Economics and Administration

Field of study: Business Management (Eng.)

Social Media Marketing

Master’s Thesis

Supervisor: Author:

Ing. Dusan Mladenovic Ishtiaq Ahmad DANISH

Brno, 2019

Name and surname of the author: Ishtiaq Ahmad Danish

Master‟s thesis title: Social Media Marketing

Department: Department of Corporate Economy

Master‟s thesis supervisor: Ing. Dusan Mladenovic

Master‟s thesis date: 2019

Abstract

The goal of the submitted thesis: “Social Media Marketing” is to analyse how the

social media marketing strategies focused specifically on the Pinterest platform

works for a real e-commerce website. The first part is concentrated on reviewing the

existing literature of social media for marketing strategies. The second part of the

thesis focuses on the practical part of the social media marketing, analysing the

metrics and results of real social media campaigns on Pinterest and their impact on a

real e-commerce business.

Keywords

Influencer Marketing, Social Media, Drop shipping, E-commerce,

Declaration

I certify that I have written the master‟s Thesis Social Media Marketing by myself under the supervision of Ing. Dusan Mladenovic and I have listed all the literary and other specialist sources in accordance with legal regulations, Masaryk University internal regulations, and the internal procedural deeds of Masaryk University and the Faculty of Economics and Administration.“

Brno,

Author’s s ignature

Acknowledgement

I hereby would like to offer sincere thanks to my supervisor , Ing. Dusan Mladenovic, for his supervision and suggestions on how to make the thesis better. I want to thank my family for their support. I would also like to thank my classmates for agreeing to read drafts of the document and offering comments and suggestions.

Table of Contents

Table of Contents ............................................................................................................ 10

INTRODUCTION ................................................................................................................ 8

The objective of the Thesis ........................................................................................................ 8

Methodology ............................................................................................................................ 9

1. SOCIAL MEDIA: ......................................................................................................... 11

1.1 Web 2.0 and social media: ................................................................................................. 11

1.2 Social-networking sites: ..................................................................................................... 14

1.3 Pinterest: .......................................................................................................................... 18

1.4 Pinterest for business ........................................................................................................ 20

1.5 Buyable Pins ..................................................................................................................... 21

1.6 Promoted Pins: ................................................................................................................. 21

1.7 Pinterest Analytics for business accounts ........................................................................... 22

2. MARKETING: ............................................................................................................ 25

2.1 Marketing Definition: ........................................................................................................ 25

2.2 Marketing Process: ............................................................................................................ 26

2.3 Digital Marketing: ............................................................................................................. 28

2.4 Social Media Marketing ..................................................................................................... 32

2.5 Advantages of social media marketing ............................................................................... 38

3. E-COMMERCE: ............................................................................................................. 39

3.1 Categories of e-commerce ................................................................................................. 42

3.2 Business-to-Business (B2B) ................................................................................................ 42

3.3 Business-to-Consumer (B2C) .............................................................................................. 42

3.4 Consumer-to-Consumer (C2C) ............................................................................................ 42

3.5 Benefits of e-commerce..................................................................................................... 43

3.6 Limitations of e-commerce ................................................................................................ 43

3.7 Drop shipping.................................................................................................................... 43

3.8 Advantages of drop shipping ............................................................................................. 45

3.9 Disadvantages of drop shipping ......................................................................................... 46

4. INTRODUCTION OF THE COMPANY ........................................................................... 47

4.1 GonChas.com .................................................................................................................... 47

4.2 Situation analysis .............................................................................................................. 47

4.3 Business ............................................................................................................................ 47

4.4 Competitors ...................................................................................................................... 49

4.5 Customers ......................................................................................................................... 50

4.6 Goals ................................................................................................................................ 53

4.7 Key Performance Indicators ............................................................................................... 53

4.8 Working of the website ..................................................................................................... 54

4.9 Using google image search ................................................................................................. 55

4.10 Using AliExpress image search option .............................................................................. 57

4.11 Contacting the Seller ....................................................................................................... 59

4.12 Deciding the Price ............................................................................................................ 60

4.13 Putting the item for sale: ................................................................................................. 61

5. FINDINGS AND DISCUSSIONS: .................................................................................. 62

5.1 Planning Marketing Strategy: ............................................................................................. 62

5.2 Performance Measurement ............................................................................................... 63

5.3 Google Analytics Metrics ................................................................................................... 63

5.4 Pinterest Ad Metrics .......................................................................................................... 65

5.5 Pinterest Advertising strategy: ........................................................................................... 66

5.6 Pinterest Business account: ............................................................................................... 66

5.7 Pinterest ad account .......................................................................................................... 68

5.8 Pinterest Tag ..................................................................................................................... 69

5.9 Pinterest Advertising Plan: ................................................................................................ 73

5.10 Campaign objectives ........................................................................................................ 74

5.11 Audiences ....................................................................................................................... 74

5.12 Optimization and delivery................................................................................................ 75

5.13 Ad Formats and Placements ............................................................................................. 76

5.14 Promoted Pins ................................................................................................................. 76

5.15 Promoted Carousels ........................................................................................................ 76

5.16 Promoted video Pins ....................................................................................................... 77

5.17 Campaign Launch and Evaluation ..................................................................................... 77

5.18 Traffic Campaign ............................................................................................................. 78

5.19 Overall evaluation of the Traffic campaign ....................................................................... 80

5.20 Influencer Marketing Campaign ....................................................................................... 81

5.21 Campaign launch and Evaluation ..................................................................................... 81

5.22 Overall Evaluation of Influencer marketing ...................................................................... 83

5.23 Comparison of Pinterest ads and Influencer Marketing ..................................................... 83

CONCLUSIONS, LIMITATIONS AND FUTURE PERSPECTIVES ............................................... 84

REFERENCES .................................................................................................................... 87

LIST OF FIGURES AND TABLES ........................................................................................ 101

LIST OF ABBREVIATIONS ................................................................................................ 103

8

INTRODUCTION

In the old days, advertising was done by conventional, non-targeted, and

traditional ways through magazines, television, radio, and direct email. These

methods were not very effective as it was hard to target specific buyers (Scott, 2010).

The advent of the internet and social media has changed the conventional marketing

for good. Social media has changed the strategies and tools for communicating with

customers. It has become one of the essential factors in influencing consumer

behavior. Companies have always fought for seeking consumer attention, and the

advent of social media has provided a new ground for it. The high competition has

forced both companies and marketers to explore new ways to reach their customers

leading to the development of social media marketing. Social media has become an

integral part of our lives, and it has a significant factor in influencing different aspects

of our behaviors regarding purchases, opinions, evaluation, etc. Also, the ease and

low cost of internet marketing, as compared to the conventional ones, has enabled

businesses of all kinds to reach their target audiences more efficiently.

Social media sites like Facebook, Twitter, Pinterest, Instagram, etc. have

changed the course of internet marketing. The number of active monthly users on

just Pinterest is over 250 million (Pinterest, 2018). This number tells us how useful

Pinterest and other social media platforms can be for companies to promote their

brand, products, and services. Social media also gives its users the freedom and

ability to review products and services that they use. This thing helps in influencing

other potential customers and also helps the company in getting useful feedback

about their product or service. It ultimately leads to improvement of products/services

and better customer experience.

The objective of the Thesis

The main objective of the thesis is to obtain knowledge and find best practices

for doing social media marketing focusing mainly on Pinterest. The issues concerning

the targeted audience, how to use the right tools, keyword selection, ad strategies

and tactics, etc. are also discussed. The theoretical part consists of literature review

and detailed information about Social media marketing. The second part will mostly

deal with the practical application of the knowledge and the experience of the author.

Pinterest has been selected as the social media marketing platform for the thesis.

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One of the major reasons for selecting Pinterest is its interesting and novice concept

(Kohler, 2019). While there is a large amount of writing about Pinterest in the popular

trade and marketing press, there has been little scholarly work so far. So, there is a

need for more scholarly work and research on Pinterest, as it is one of the fastest

growing social media with a lot of potential (Pew Research Center, 2012). This work

will help marketers in planning and implementing Pinterest marketing campaigns

successfully. We will discuss Pinterest in more detail in the first section of our thesis.

The marketing plan consists of Pinterest advertising campaigns for an e-

commerce website. The idea is to use the knowledge and best practices for Pinterest

marketing and Pinterest ads and find out how they can be profitable for an e-

commerce website. Another important part of the study is the niche of the website.

The niche of the e-commerce website used for the study is women clothing and

accessories. With this niche website we got a more precise understanding of the

Pinterest audience as 81 percent of the users on Pinterest are women (Pinterest,

2018). The responses of customers were monitored closely depending upon the type

of ads, keywords used, demography and the audience selected. This information

collected was then used to find the best practices for making maximum profit and get

a higher return on investment, that was the main goal of the website.

Methodology

Both primary and secondary data has been used in this thesis. The main

difference between a primary and secondary data is how, where and when it was

collected. Secondary data is the data that already exists and can be used in the

investigation process to get more knowledge about the study. The primary data is

collected by the person doing the investigation. This data is used for answering any

research questions and to resolve any problems related to the study.

The first part of our thesis is comprised of data collected through secondary

sources including scientific articles, research papers, books, journals and the

Pinterest website.

The second part of the thesis comprises of both primary and secondary data.

Primary data is collected from the ad campaigns, performance of the website,

customer base, etc. The primary data includes number of saves, clicks, account

follows, page views, conversion rate, etc. These data will be collected directly from

the e-commerce website used for this study. These data are acquired by using

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different target audience that were separated according the demographics, interests,

etc.

The website gonchas.com is an e-commerce website build on WordPress and

uses the “WooCommerce” plugin that allows to sell merchandise online. The main

idea of the website is to outsource less-expensive, good quality and viral items from

Chinese site Aliexpress.com and sell it on gonchas.com for a profit. The supply chain

management method used is known as Drop shipping. In this method the distributor

ships individual orders directly to the customer on the behalf of the online shop (Tarn

et al., 2003). Detailed information about drop shipping will be provided in the last part

of the Literature review.

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1. SOCIAL MEDIA:

The aim of this chapter is to define social media and the role of different social

media platforms. The first part deals with defining the Web 2.0, social media and a

brief overview of how consumers adopt to new technologies and how different social

media platforms emerge. In the second part different types of social media, also

referred as social networking sites – SNS (Alloway & Alloway, 2012) will be

introduced.

1.1 Web 2.0 and social media:

There are multiple ways to define media because of their complex nature and

structure (Grossberg L., 1998). Media has been described as broadcasting, cinema,

encompassing press and technology (Scannell P., 2002). Media can provide the

target audiences with required information, different views, monitor and critique those

wielding power in a society, which creates the opportunity for publicity (Grossberg L.,

1998). It also makes profit for its owners and meet the demands of its stakeholders

such as marketers (Scannell P., 2002).

The origin of the term “Web 2.0” goes to „O‟Reilly Media Web 2.0‟ conference

of 2004, during this conference Tim O‟Reilly described the Web 2.0 phenomenon as

business embracing the Web as a platform and using its strengths for global

audience (John R. Graham, 2005). Tim O„Reilly (2007), states that a website need to

fulfill 3 conditions in order to be seen as a part of web 2.0.

- The user shall be able contribute to the sites content by her/himself.

- The user shall have control over her/his information.

- The websites design shall be interactive and useful.

Constantinides and Fountain (2008) took a different point of view and defined

Web 2.0 as: “a collection of open-source, interactive and user-controlled online

applications expanding the experiences, knowledge and market power of the users

as participants in business and social processes. Web 2.0 applications support the

creation of informal users’ networks, facilitating the ow of ideas and knowledge by

allowing efficient generation, dissemination, sharing and editing of the informational

content.”

Web 2.0 gives businesses new opportunities to reach and stay in touch with

their consumers, learning their needs and opinions and also interacting with them

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directly in a personalized way. According to another definition Web 2.0 is a platform

whereby content and application are no longer created by individual users, rather

continuously modified by all the users in a participatory and collaborative fashion

(Kaplan & Haenlein, 2010). Some of the most important technical functionalities like

Adobe Flash, RSS and AJAX allowed this change to happen. So, it can easily be

said that Web 2.0 is all about cooperation. Also, to some extent, Web 2.0

technologies are the platforms on which the social media and user-generated content

have developed into a mass- market phenomenon (Kaplan & Haenlein, 2010).

The form of media that involves interactive participation is known as Social

media (Manning J. 2014). According to another definition, “websites and applications

used for social networking are known as social media” (Oxford Dictionaries 2012).

Social media comprises of social networks, as well as content-oriented networks

(Euromonitor International 2010). Kaplan and Haenlein (2010) define social media

as, ‟a group of Internet-based applications that are built on the ideological and

technological foundations of Web 2.0 and that allow the creation and exchange of

user-generated content‟. The development of media has been divided into two

separate ages, the broadcast age, and the interactive age. Media was almost

exclusively centralized in the broadcast age. During this age, a single entity, e.g., a

newspaper or television station, or a movie production studio would distribute a

message to the masses. The feedback process was often indirect, slow, and

impersonal. Mediated interaction between people usually took place on a much

smaller level, often through personal letters, telephone calls, etc. These definitions

explore two central concepts in the present study: the possibility to participate and

the ability to share user-generated content, UGC, and these are considered the

essential characteristics of social media (Miel and Faris, 2008).

„Web 2.0‟ and „social media‟ are closely related and interdependent. As a

consequence, they are often used imprecisely and interchangeably however they are

still different because of their different meanings and different strategic implications

(Berthon, 2012). An overview of Web 2.0, social media and consumers can be seen

in the following figure. It uses two delineating dimensions of focus. The figure shows

that Web 2.0 can be thought of as a technical infrastructure that enables the social

phenomenon of collective media and facilitates user-generated content.

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Figure 1: Web 2.0, Social media and Creative consumers

Source: (Berthon, 2012)

The advent of digital and mobile technologies has revolutionized the way

people interact. The interaction among individuals has become a lot easier than

before. This revolution in the media led to the birth of a new media age, where

interactivity was placed at the center of all media functions. Now a single individual

could speak to many and get instant feedback. Before the advent of interactive

media, citizens and consumers did not had a voice, and now they could share their

opinions with many. All types of social media involve some digital platform that can

either be mobile or stationary. They all have two common characteristics that define

them. Firstly, every kind of social media allows some form of participation for its

users. Although some social media sites like Facebook allow passive viewing of

posts from other users but the person must have a profile created to be able to view

posts from other people. The second important characteristic of social media is its

participatory nature; it involves interaction. The interaction can vary depending on the

person you interact with. It can be established friends, family, acquaintances, or new

people who share common interests or common social circle (Manning, J. 2014).

Social media is comparatively inexpensive and accessible to make any individual

publish or access information compared to traditional industrial media, which

generally require a lot of effort both in time and cost. This has made it possible for a

global audience to be able to share and publish information and share opinions.

Information can be published directly without the need for printing it, which makes it a

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swift communication tool. Social media and social networks were actively used under

the Arab revolts in 2011 to communicate fast and spread updates efficiently to a

large mass of people (Kirkpatrick, 2011).

1.2 Social-networking sites:

The rise of social media gave birth to social networking sites (Tuten &

Solomon, 2014). The online communities that allow people to socialize and interact

with each other are known as social-networking sites (Dennis, 2010). These sites

allow users to connect with other users by creating personal-information profiles,

inviting friends and family to gain access to those profiles, sending messages and

comments, etc. (Kaplan & Haenlein, 2010). The personal profiles can include various

type of information about the users. It includes their names, date of birth, photos,

videos, audio files and blogs. In short, social networks emerge from the ability of

users to represent themselves and their interests and to network with other like-

minded users. Facebook, Pinterest, Twitter, LinkedIn, Instagram, VK, and Myspace

are few of the best-known social networking sites. Usage of social media networks

produces outcomes such as community building, content sharing and collaboration

enhancement (Spencer S., 2014).

Due to their popularity, the social-networking sites have made a significant

impact on modes of social communication (Hollenbeck, 2012). The number of people

using social networking sites is increasing very rapidly and at the time of writing this

research more than 2.62 billion people use social-networking sites (Statistica, 2019).

Several researchers e.g. Kaplan suggests that these social-networking sites have

changed the social lives of many individuals, especially the younger generation of

internet users (Kaplan & Haenlein, 2010). Accepting this huge potential, many

companies are using these networking sites to support their brands and increase

their customer base (Muniz, 2007).

Facebook – Facebook is the largest social-networking site. It has over 2.32 billion

monthly active users worldwide (Statista, 2019). It was initially created by Mark

Zuckerberg in 2004 for the purpose of staying in touch with his fellow students at

Harvard University. Facebook is a free social-networking site that allows registered

users to create profiles, upload photos and videos, send messages and keep in

touch with friends, family and colleagues (Spencer S., 2014). The average Facebook

user spends almost one hour per day and the potential of having successful

15

marketing campaign is immense. Facebook has developed an advertising platform

that enables very accurate targeting. Depending on the personal information of the

user, marketers can choose which users that will see the ad on Facebook. It can be

divided by gender, geographic area, age, interests, education, birthday, workplace,

relationship status, language and connections (i.e. to specific pages and groups).

From a marketing perspective, Facebook offers a wide range of benefits for

marketers. Few of the most prominent benefits includes; Massive exposure on global

scale, Low marketing costs, sophisticated targeting tools, etc. (Spencer S., 2014).

Twitter – Twitter is a microblogging social networking site (short messages) which

encourages communication between users and their followers (Spencer S., 2014).

Twitter only allows users to “tweet” messages of 140 characters or less to their

contacts. The contact is known as followers. It is a unique way of communication that

allows users to share ideas, news, and hyperlinks to reach a wider audience. It also

helps professionals to broadcast a link to their blogs and send their tweets

automatically to their other social media applications (Fischer, 2011). In terms of

marketing and business, Twitter is one of the biggest marketing phenomena of the

online business world. As a marketing platform, it offers many benefits to a business

Few of the core benefits of marketing on twitter are: increased customer satisfaction

with better customer service, more effective communication with customers,

increased traffic to the company website, ability to follow trends and watch

competitors closely, etc. (Fischer, 2011).

LinkedIn – LinkedIn is an employment and professional networking site that allows

its users to build their business and professional contacts into an online network. At

the time of writing this research, over 485 million registered users are on LinkedIn to

exchange information, maintain contacts and to share ideas (LinkedIn.com). LinkedIn

is often used for different purposes than a social networking site, if we see it from a

consumer‟s perspective (Wagner, 2014). People use it to build their professional

networks, search for jobs and other information related to their career. For brands

and marketers, it‟s a place to advertise jobs, events and white papers. In terms of

marketing, LinkedIn is a powerful platform to help any business in making quality

connections. Some of the benefits of LinkedIn as a marketing tool are: Lead

generation, Networking with high notch professionals, Increased exposure, Filtered

results of professionals, etc. (Wagner, 2014).

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Pinterest – Pinterest is one of the most popular social-networking sites, especially

among women. It has been described as “digital crack for women” (Dvorak, 2012);

(Phillips, 2014). It is one of the fastest growing websites in history (Pew Research

Center, 2012). Within a few years of its launch it was able to get over 11 million

users. Also, the average visits to Pinterest lasts approximately 97.8 minutes, that

allowed Pinterest to be ranked higher than most of the other social networking sites

in terms of user engagement (Statistica, 2014). Due to this high engagement rate

and rapid growth, it attracted many users and brands. Pinterest is a marketing force

to be reckoned with, evolving on a steady basis to help brands deliver more engaging

content and reach the right customers (Weinroth, 2015). Few of the most important

benefits, Pinterest marketing offers, are: Increased awareness, high website traffic,

high user engagement, lead generation, etc.

Instagram – Instagram is a social networking site used for photo sharing from mobile

devices (Scott, 2013). There were approximately more than 77.6 million active

Instagram users in the United States in 2015. This number is projected to cross 111

million in 2019. It is most popular among teens and young millennials. Globally

speaking, 41 percent of the users are 24 years or younger. Because of the visual

nature of Instagram, it is a very valuable social media marketing tool. 98 percent of

fashion brands had an Instagram profile as of March 2016 (Statista, 2019). All these

numbers show that Instagram is a great tool for marketing, and it offers a wide range

of benefits to companies, in terms of marketing. Some of these benefits include:

better targeting of audience, as Instagram also uses the data from Facebook,

Instagram ads are non-intrusive and less likely to annoy the targeted audience,

Instagram has a higher engagement rate than most of the other social media

platform, etc. (Safko, 2012)

The number of social media users has shown a rapid growth in the last few

years and is projected to increase steadily. There are 3.175 billion active internet

users in the world, out of which, 2.206 billion are active social media users (Statista,

2019). In 2017, 71% of the total internet users were social network users and this

percentage is projected to increase. The most popular activity among internet users

is social networking and it has a high user engagement rate. With social media

penetration of over 66%, North America ranks first among regions where social

media is most popular (Statista, 2019). More than 81% of US population had a social

media profile in 2016.

17

Figure 2: Number of social media users from 2010 to 2021

Source: (Statista, 2019)

Another important thing to consider, while discussing social networking sites,

are the platforms on which these social networking sites are used. Mobile and

smartphones have become the most popular devices for using social networking

sites. The most popular purpose of smartphone app usage other than gaming is

using social media to connect with other people (Jeff, 2014). A report from comScore

shows that both Facebook and Twitter users spend more time using those networks

on mobile devices than they do on traditional computers or laptops, also, it was noted

that the apps drive the majority of engagement on mobile devices- 4 out of every 5

minutes consuming media on mobile devices are via apps (Comscore, Inc. , 2012).

An average Facebook mobile user spends more than 7 hours per month while the

25.6 million twitter mobile users had an average engagement of nearly 2 hours per

month, in comparison the people visiting twitter on their computers spent just 20.4

minutes (Forbes, 2019). As seen in the below figure, the number of mobile phone

users worldwide is steadily increasing and is projected to reach 4.78 billion by 2020.

18

Figure 3: Number of mobile phone users worldwide from 2015 to 2020 (in billions)

Source: (Statista, 2019)

1.3 Pinterest:

The rise of visual content sharing sites has brought many changes in the

social-media landscape (Pew Research Center, 2012). The importance of visual

content sharing in social media can be realized from the explosive growth of the

latest visual-content sharing sites such as Instagram, Pinterest and Snapchat –

especially in an industry like fashion where the main focus in on aesthetics and visual

representations (Workman, 2007). In the current landscape of social-media, many

fashion brands are experimenting with the power of visual content, using images and

videos to build brand awareness and engaging consumers (Wasserman T, 2012).

Pinterest has some unique terms that needs to be defined for a full

understanding of the platform and its working. The most common and important

terms used are: Pin, Re-pin, and Board. The Pin is the basic unit of Pinterest. It

consists of an image or video with some information about the source (either

uploaded or taken from a website) and an indication who saved it. The act of saving

a „Pin‟ is called Pinning. Pinning can be done by clicking the “+” button on the top

right menu bar of Pinterest account. Clicking the “+” button will give you options for

adding a pin from a website, uploading a pin or creating a new board. Pinning can

also be done directly from a website by using the “Pin it” (or bookmarklet) button. The

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“Pin it" button can be installed on a browser‟s bookmarks or favorites bar. The term

“Re-pin” is very easy to understand once you grasp what a pin is. Repining is done

by clicking the save button that appears when hovering over a pin. For organizing

pins, a user can make “Boards” in their account. Boards are defined by a title and a

category. A user can have either a public or a secret board. A public board allows

any user on Pinterest to access the pins inside it while a secret board is visible only

to the creator. Boards are by default public to all users on Pinterest. Secret boards

can be made public at any time; however, public boards cannot be changed to secret

boards once they have been made visible. There is also the option to make

collaborative boards. This can be done by inviting other users to contribute to a board

from the edit board menu (Wishpond, 2019).

As a part of this visual content sharing trend, Pinterest is growing faster than

any other website reaching 100 million users in September 2015 (Pew Research

Center, 2012). Pinterest is basically a bookmarking site that was launched in 2009,

allowing users to „pin‟ sites and content and „repin‟ it to their boards (Pinterest.com,

2019). or Users can either upload content from their personal computer or other

devices or save something directly from a website. Women make the majority of the

site with more than 81 percent registered female users (Omnicoreagency, 2019). For

marketers, Pinterest can be a destination for users to discover and evaluate different

brands.

Pinterest can be defined as “a social networking site where any web image or

personal digital image can be posted („pinned‟) to a digital scrapbook, where it can

then be viewed by the public” (Phillips, 2014). During the initial phase of its launch,

Pinterest was invitation-only, and it became the fastest site in history to reach high

user engagement with 10 million unique monthly visitors (Pinterest - Statistics &

Facts, 2019). It has since become the third most visited social network after

Facebook and Twitter. Within a few years of its launch, it became the third most

visited social network with approximately 53 million users. Pinterest is ranked higher

than most of other social network sites in terms of user engagement (Pinterest -

Statistics & Facts, 2019). The average time a visitor spends per month on Pinterest is

approximately 97.8 minutes (Pinterest - Statistics & Facts, 2019). Pinterest is most

popular among women who make 81 percent of the total users (Omnicoreagency,

2019). These figures highlight the intense engagement likely to be experienced by

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female users. Also, the highest share of Pinterest users was observed to be between

18 to 34 years (Pinterest - Statistics & Facts, 2019).

Pinterest is primarily a visual content sharing platform unlike most of the other

social media networks where people typically share text-based content. Pinterest

views itself as a virtual pin board where people can share visual things of interest like

photos, bookmark images, comment on photos and generate conversations around a

visual centerpiece (Jacques A, 2012). “Repining” is the action taken to repost some

image you like on Pinterest, it is compared to the action of someone re-tweeting on

Twitter or sharing a post on Facebook. A lot of brand advertisers, online retailers,

bloggers and website owners have embraced Pinterest because the images or

content posted on Pinterest tend to have a longer shelf-life. This means that the

products or the posts shared on Pinterest steer consumers to the product or website

for a longer time than any other social media. Pictures pinned on Pinterest stays

there driving traffic to the website until it is removed by the owner (Phillips, 2014).

Pinterest can be called the leader in the area of social and E-commerce due to

its high user engagement and high conversion rates (Phillips, 2014). Some of the

famous topics on Pinterest are Fashion, Home, Garden and do-it-yourself segment

(DIY).

1.4 Pinterest for business

Pinterest offers a special type of account for businesses and companies.

These accounts are known as Pinterest business account. They enable a company

or business to get access to a wide range of tools for promoting their brand and

getting insights about their performances. Pinterest for business is a free service that

aims to help companies and businesses expand their customer base and to keep

existing ones. The business accounts come with analytics tools that give valuable

information about the audience they interact with. This information includes the

interest, demographics, devices used, etc.

Another important feature of „Pinterest for business‟ is the ability of account

holder to do paid promotion. This feature is known as “Promoted Pin”. Promoted pin

involves paying Pinterest for reaching a target audience. It has been discussed in the

coming section. Pinterest proves to be a very helpful platform for businesses even

without using the paid services. According to an American research, Pinterest is one

of the best channels to increase the number of visitors to a website and the users of

21

Pinterest buy more than the users of any other social media platforms (Niñofranco,

2018). These options will be used the practical part of the study, so it is important to

explain them in more detail. Some of the most notable promotional options Pinterest

offers are: Buyable Pins and Promoted Pins. The have been discussed below.

1.5 Buyable Pins

Pinterest has introduced „Buyable Pins‟ for its users in USA. „Buyable pins‟ are

basically products that you can purchase directly from Pinterest without getting

redirected to the merchant‟s website. The „Buyable Pins‟ have a „Buy it‟ button next to

the image. This service is only available in USA and Pinterest only works with a few

big brands (Pinterest, 2019). However, there are more than 2 million products on

Pinterest that you can buy by going on the vendors website (Mangalindan. JP, 2015).

One of the biggest benefits of „Buyable Pins‟ is the fact that people feel more safe

shopping from Pinterest than from some website they don‟t know. Registering and

setting up “Buyable Pins‟ is completely free for companies. Only the payment goes

through Pinterest, the rest of the things, like shipping, customer service and other

things related to the delivery of the item are the responsibility of the vendor.

Customers can use their Apple Pay or credit cards for doing the purchase securely

(Pinterest, 2019).

1.6 Promoted Pins:

If a company wants to reach a wider audience, they can do it by paying

Pinterest to promote their pins. These promoted images are known as Promoted

pins. They look exactly the same as normal pins. For promoting, Pinterest gives the

option of creating advertising campaigns for the business accounts. The company or

the business needs to start by defining the campaign goals, set daily budget and the

total budget. Once these are decided, an image or pin needs to be selected for

promotion. Next step involves selecting the targeted audience. There are many

options available to target the audience e.g. keywords, demography, device, gender,

language, etc. Once all these steps are followed the pin is ready for promotion. The

campaign runs until the daily budget is reached. Promoted Pins are available in 7

countries for now. They include United States, Unite Kingdom, France, Australia,

Canada, Ireland and New Zealand.

According to a study made by Ahalogy about consumer attitudes towards

Promoted pins, the awareness of the advertisements has increased by 12 percent

22

compared to last year, but most of the users have not seen any advertisements.

Those who have seen the advertisements have been neutral towards them. Pinterest

users do not consider the ads as annoying as the ads perfectly mix with the normal

pins and hence does not harm the user experience, rather users called it more

relevant content (Ahalogy, 2015). Half of the active users have clicked on the

Promoted pins to retrieve more information about the product and about 40 percent

of them have made a purchase (Ahalogy, 2015). The most popular categories for

shopping are fashion and clothing, arts and crafts. Also, the study found that man is

more likely to click on promoted pins and make a purchase (Ahalogy, 2015).

1.7 Pinterest Analytics for business accounts

All the business accounts get access to Pinterest analytics. Pinterest analytics

is a tool that enables the account holder to analyze the reach of their account and

gives valuable insights about the users the account interacts with. The information

includes the location, interests, devices used, age and gender. It also allows the user

to track the number of visitors to the account and to the websites. This information

can be utilized to find out the type of content visitors are more interested in. It also

gives information about other interests of the visitors, that the company might not

know. This can help the company in increasing the overall engagement by

diversifying the content according to the interest of its users.

Figure 4: Average monthly engaged Average monthly users

Source: (Pinterest.com, 2019)

The above figure gives insights about the audience interacting with the

author‟s account. The average monthly viewers mean the number of viewers who

have seen any of the content share on author‟s account (Shivar, 2018). The average

monthly engaged means the number of viewers who got engaged with any of the

23

shared content on author‟s account. The engagement can vary from mere liking,

sharing to click the image and going to the target website (Shivar, 2018).

The below figure shows the audience insights. It is a new feature added by

Pinterest recently. The first part of the figure shows the location of the audience. It is

showing the percentage of users residing in a specific country, for instance, 49% of

the users interacting with the author‟s account resides in the USA. This information

can be used for deciding what products should be promoted depending on the user‟s

location. The second part of this figure shows the devices used by this audience. For

the given audience mobile devices are being used more than desktops. This is also

very useful information for the marketer as it helps in deciding what type of website or

content should be promoted to suit this audience, for instance, if a website has to be

promoted on this account it should be responsive, to make it more mobile friendly.

Figure 5: Location and Devices used by GonChas‟s audience

Source: (Pinterest.com, 2019)

The below figure shows the age and gender distribution of the audience. The

chart shows that more than 80 percent of the audience is female. So, this information

can also be used by the account holder to focus more on content related to women,

women products and services.

24

Figure 6: Age and Gender of GonChas‟s audience

Source: (Pinterest.com, 2019)

The below figure gives information about the most popular categories and

related interests of the audience. This is one of the most important information as it

tells what your audience is interested in or what content do, they like or share.

Figure 7: Categories and Interests of GonChas‟s audience

Source: (Pinterest.com, 2019)

25

2. MARKETING:

What is marketing? Most of us think that marketing is only about selling and

advertising, but it is more than that. We see a lot of television commercials,

promotional messages, advertisements, sales calls and online advertisements on the

websites we browse. These are all part of marketing, but they are just the marketing

iceberg (Philip Kotler, 2015). In this chapter the author will define marketing and

highlight its importance for a business.

Figure 8: The Marketing Iceberg

Source: (Hart, 2016)

2.1 Marketing Definition:

Marketing has several definitions but the one widely accepted and approved

by the American Marketing Association in 2013 defines marketing as: “The activity

set of institutions, and processes for creating communication, delivery, and

exchanging offerings that have value for customers, clients, partners, and society at

large.” (American Marketing Association, 2013). The function of a business that deals

with customers is Marketing. It aims at creating value and satisfaction. Hence

marketing can also be defined as managing profitable customer relationship (Philip

Kotler, 2015). The two basic goals of marketing are to attract new customers and to

keep and grow the current customers by delivering value and satisfaction. It is very

critical for the success of any business. Successful companies know that if they take

a good care of their customers, profits and market share will follow. Management

guru Peter Drucker (1954) emphasized on the importance of marketing by saying:

26

“Marketing is not only much broader than selling, it is not a specialized activity at all.

It encompasses the entire business. It is the whole business seen from the point of

view of its final result, that is, from the customer’s point of view. Concern and

responsibility for marketing must therefore permeate all areas of the enterprise . . .

Marketing is the distinguishing, the unique function of the business.”

Another definition proposed by two major professional marketing bodies,

focused more on the process of marketing, is: “Marketing is the activity, set of

institutions, and processes for creating, communicating, delivering, and exchanging

offerings that have value for customers, clients, partners, and society at large

(Approved October 2007 AMA Board of Directors).

On contrary, Chartered institute of Marketing, sees Marketing as a

management process, they define Marketing as: “Marketing is the management

process responsible for identifying, anticipating and satisfying customer requirements

profitably” (Chartered Institute of Marketing).

We can see marketing in the advertisements that plays on our televisions,

radios, magazines, letterbox, online websites, etc. (Philip Kotler, 2015). Simply put,

we can say marketing is managing profitable customer relationship and its aim to

create value for customer and capture value from customer (Gary Armstrong, 2015).

In the recent years, businesses have adopted a host of new marketing approaches,

from imaginative websites to social networks to smartphone apps. These methods

have been very successful as they approach each customer directly and personally.

The businesses today want to be a part of your life and want to make their brand a

part of your life (Gary Armstrong, 2015).

In 1960, Jerome McCarthy introduced the world his unique idea of marketing

mix – widely known as the 4 Ps; Product, Price, Place and Promotion. This idea is

still valid and plays an important role in formulating and implementing marketing

strategies. The idea of 4 Ps was later extended and developed into 7 Ps with the

addition of People, Process and Physical evidence (Booms and Bitner, 1981).

2.2 Marketing Process:

According to Philip Kotler marketing comprises of five steps (Philip Kotler,

2015). The first four steps comprise of the process of understanding customer needs

and wants, designing a marketing strategy, constructing marketing programs for

communicating and delivering value, and building strong customer relationship. The

27

last step comprises of taking value from customers and making profit. So, in short,

the business creates value for the customer and in return takes value from the

customer in the form of sales, profits and long-term customer equity (Philip Kotler,

2015).

Figure 9: Marketing process

Source: (Philip Kotler, 2015)

Human need is the most basic concept underlying Marketing. These needs

include physical needs for food, clothing, warmth and safety; individual need for

knowledge and expression; social need for belonging and affection (Gary Armstrong,

2015). When any of these needs is not satisfied a person will either try to reduce the

desire or look for something that will fulfil it. The way people behave in such situation

depends on their society. In a less developed society people might try to reduce their

desire while in an industrial society people might try to develop or find objects that

can satisfy their needs (Philip Kotler, 2015).

The needs and demands of people are satisfied by products or services. The

products or services comes as a combination of goods, experiences and services

that can be offered to satisfy the need or want of a market. The word product usually

suggests a physical object such as a house, car, iPhone, soap or a chocolate bar.

But the concept of product is not limited to only physical goods; anything that can

satisfy any need of a person can be called a product. So, the ultimate goal of buying

a product does not lie in just owning them rather it lies in the benefit and value they

provide. People buy food to satisfy their hunger. We buy a car not to admire its utility,

but because it transports us from one place to another (Gary Armstrong, 2015).

Marketing is a collective process where individuals or groups can exchange

goods and services based on their needs and wants (Philip Kotler, 2015). The act of

obtaining a desired object from someone by offering something in return is called

Exchange (Gary Armstrong, 2015). It is the core concept of marketing, whereas

Understand the

marketplace and

customers needs and

wants

Design a customer-

driven marketing strategy

Construct and

integrated marketing

program that delivers

supperior value

Build profitable

relationship

Capture value from

customer to create profits

and customer

quality

28

transaction is the marketing unit of measurement. Transaction basically involved the

exchange of values between two parties. There have to be two or more parties where

one party gives X to another party and gets Y in return (Gary Armstrong, 2015).

Marketing involves bringing about profitable customer relationship by managing

markets. Creating these relationships takes time and hard work. Business have to

find their target customers, identify their needs, make good market offerings, decide

reasonable prices, advertise them and deliver them. The core marketing activities

can be summed up as consumer research, product development, communication,

distribution, pricing and service (Philip Kotler, 2015).

2.3 Digital Marketing:

The concept of Digital marketing has expanded and brought more

opportunities for companies to reach their current and potential customers. Digital

marketing shouldn‟t be mixed up with internet marketing. Digital marketing is a

broader term as it is beyond internet marketing. In addition to channels like social

media, search engines, display, etc. it also includes other digital media like mobile

phones, television and radio (Lexicon, 2017). Digital marketing has been defined as

marketing that is done through platforms such as websites, email, apps, and social

networks, that are accessible with electronic devices such as computers,

smartphones, tablets, etc. (Singh O, 2017). (Smith K, 2012) defines digital marketing

as a way of promoting products and services through digital channels by computers,

smartphones, mobiles and digital devices. The aim of these platforms is to reach e-

commerce transactions and to build a strong customer relationship while retaining

current customers and acquiring new ones (Smith K, 2012). Digital marketing is very

essential for any company these days as it‟s the fastest way to spread any message

to any corner of the world with internet access. It‟s a two-way communication

between a company and its customers, as you not only convey a message or product

to your customer, you also can get a direct feedback from them (Leeflang P., 2014).

Moreover, the digital channels used frequently by companies are their website, email

and social media account (Leeflang P., 2014).

Based on the understanding of marketing, Internet marketing can be defined

as the marketing of products and services via internet. Ward defines internet

marketing from an application perspective: “Internet marketing refers to the strategies

that are used to market a product or service online, marketing strategies that include

search engine optimization and search engine submission, copywriting that

29

encourages site visitors to take action, web design strategies, online promotions,

reciprocal linking, and email marketing” (Ward, 2000). It is used as a communication

channel for doing direct marketing. Since its invention, it has proved to be a very

useful and effective marketing tool. In the beginning it was used just a channel to

communicate with customers through emailing and getting response from them, but it

has evolved from those days. It has helped businesses target their potential

customers on a more personal level (Kotler, 2003). Another definition says, „The

online marketing is a way of leveraging the internet by conveying a message in order

to move people to take some action‟ (Shama & Brogan, 2012). It is also a means for

determining potential product and price structures and this process is understood as

internet marketing research. According to (Fishkin, 2017) the most widely used online

communication channels are as below:

Online websites

Social Media platforms

E-mails

Search Engine Marketing – including pay-per-click (PPC) and search engine

optimization (SEO)

Display Advertising

Online Public Relations

Affiliate Marketing

Inside the field of Internet Marketing there are several other terms that are used

as synonyms to describe related concepts. For instance, E-commerce involves the

concept of sales and purchase taking place using the internet or through electronic

means (Abhijit Chaudhury, 2002). It means the term E-commerce describes more the

transactional technical aspect of the business while internet marketing focuses on all

managerial and technical activities that leads to the transaction. Internet marketing

mostly focuses on the paid, public and non-personal representation or

announcement of a message by a firm or sponsor to the existing or potential future

customers (Dreze X. & Hussherr, 2003). Internet has provided a lot of possibilities for

the marketers, before the arrival of internet, companies had to spend a lot on

advertising to attract potential customers (Scott, 2009). Internet has a very high

influence on the lives of people, it has shaped the way people make decisions, the

way they interact with each other and the way they do business (Sharma, 2011). The

30

traditional rules of marketing do not comply anymore. Customers have moved online,

so the marketers have to do the same in order to reach them (Scott, 2009). This shift

from traditional marketing to internet marketing can be understood in the perspective

of old media and new media because the traditional marketing in done mostly

through old media and internet marketing uses the new media. Old media are the

form of ways people tried to communicate, advertise, and influence each other,

mostly during the 19th and 20th century e.g. newspapers, radio and television

(Saltzman, 1999). While the new media includes internet websites, videogames,

virtual reality and other (Manovich, 2003). (Shama & Brogan, 2012) has mentioned

three main difference that separates old media from the new media:

The old media channels were one-way: The advertisements in the old media were

one way. It was not possible to react or share opinion about them.

Simple targeting: The target audience selected use to be more homogenous, it

included a wide audience with various interests, purchasing habits and opinions.

Dominance of main stream media: It was not easy to access information for

general public, so the main source of information was the mainstream media and

people trusted mainstream media outlets.

The shift to digital marketing from traditional marketing is very significant and it

changes the focus of entire advertising industry. In the graphs below, a visible

downwards trend can be seen in consumer media consumption share of old media

(Television, Radio and Print).

Figure 10: US consumer media consumption share

Source: (DOLLIVER, 2014)

As seen in the above figure, there is a clear shift in the trend from old media to

digital media. The old media, television and radio, consumption is showing a decline

31

from the year 2009 onwards while the digital media consumption is showing a steady

increase. Also, the print media consumption has shown a steep decline. The shift in

the consumption of media has opened new gateways for digital marketers. Because

of these changes the world has transitioned into a digital environment and for every

business, it is imperative to have a website and use web as a means to interact with

their customers. There are some successful traditional marketing strategies,

especially if you are reaching a largely local audience, but it is very important to take

advantage of digital marketing so as to keep up in today‟s world. This information is

very useful for any marketers to decide which media platform to focus depending

upon the targeted audience and evolution of the media consumption trends.

Figure 11: Media consumption for US consumer

Source: (DOLLIVER, 2014)

Other important thing to consider, while discussing the media consumption, is

the way people access media. As seen in the graph above, the digital segment of

media has been divided into Desktop and Mobile. This division clearly shows that

there is downward trend for desktop consumption and a sharp increase in the mobile

consumption. This gives valuable information for the marketers to plan and optimize

their marketing campaigns and advertisements according to the type of devices

used. Also, it helps companies to keep up with the rapidly changing trends and media

consumption preferences of their consumers.

These rapid changes in terms of the media usage and the new technology in

the industry, puts pressure on the marketing professionals. 76% of the marketers

believe that the industry has changed more in the past two years as compared to the

past 50 years. The traditional marketing methods does not work as it used to before,

therefore the marketers need to adapt and broaden their portfolio of skills by

32

including digital marketing (JURAN, 2017). In short, digital marketing is the 21st

century tool of marketing. It has many benefits over the traditional marketing, for

instance, it is more interactive for reaching both local and global audience, the data is

available immediately and results are much easier to measure, social media enable

companies to communicate directly with consumers and build a good relationship

with them, it allows 24/7 marketing and captures the most energetic crowd, etc.

(Santanu & Dr. Gouri, 2016). So, all these benefits make digital marketing a very

attractive and important part of marketing for any company.

2.4 Social Media Marketing

There has been a shift in the way people use social media (Schaffer, 2013).

Nowadays, social media is being used by people and businesses to communicate

and seek information for their professional and private uses (Schaffer, 2013). This

shift in the usage of social media is a big opportunity for business to learn about the

needs of users and influence them to make “purchase decisions” (Rad, 2011).

Businesses can actually analyze the growing amount of data that is available to

everyone publicly in different social media platforms, the “big data” and learn from it

(Schaffer, 2013). This data can give the business very useful information about their

customers, markets, partners, costs, competition and operation (Russom, 2011).

Social media networking has emerged and expanded over the years and it has

provoked marketers and managers to use this networking as a part of their marketing

communication (Kim & Wang , 2017). Some researchers have described social

media as way to connect or interact with current and potential customers with the

main aim of maintaining or building a relationship (Felix R., 2017). There are many

benefits of using social media as a marketing tool as opposed to using traditional

marketing tools. One of the benefits is the ability to find your target potential

customers and reach them in a personalized way. This is done by targeting buyer‟s

niche directly with specific information that meets their needs (Scott, 2013). So, in

short, the term “social media marketing” is defined as the marketing technique that

involves usage of the social media network and social media website to market some

products or services. Social media marketing can also be defined as the use of the

platform that makes connection between the brand and the consumers while at the

same time providing channel for user-centered networking and interaction (Chi,

2011). Social media marketing provides the companies multiple ways to reach out to

a large audience where they are capable of attracting new potential customers and

33

interact with the existing ones (Harrysson, 2012). For reaching their target audience

and potential customers, businesses use a wide range of marketing strategies and

tactics. These strategies and tactics allow them to reach their potential customers in

a more personalized way (Hays, 2013). Through social media marketing companies

are able to interact with their audience by choosing the demographics, geography

and other personal information that allows them to reach the audience with specific

characteristics. Also, by practicing segmentation of the obtained data, the company

can make sure they have reached their target audience (Hays, 2013).

Social media marketing is one of the most powerful type of marketing on the

internet at the moment (Gruber, 2014). One of the many reasons for a business to be

marketing through social media is that your customers are spending time on these

channels. According to Statista, 77% of US population has at least one social media

profile (Statista, 2019). With so many consumers using social media every day, this

presents a great opportunity for small businesses who want to reach their online

audience. Another reason why consumers may be more receptive to your brand

message on social media is because social media allows a two-way communication

and show a different side of your brand. On social media, you are able to make

authentic connections with your leads and customers, rather than just delivering

direct marketing messages. (Gruber, 2014). Social media is a great tool to influence,

attract and engage customers efficiently. Engagement is the most important part of

social media marketing as it turns strangers into friends (Eid and El-Gohary, 2013).

The term “engagement” is very beneficial for marketing as the customers do not just

click to read a message, rather they react by commenting, sharing and liking those

messages (Agresta, 2010). Marketers should understand that it is very important to

make a virtual community where the consumers have freedom to give feedback,

spread our information, marketing messages and promotional advertisements rather

than just reading and listening passively without the ability to give some input

(Agresta, 2010). Social media is based on the modern concept of “social

interactions”, that means the community is built on multiway conversations; between

brand and customers and significantly between customers and customers. This

“social interaction” concept has proved to be more productive than the traditional

concept of “word of mouth” (Bock, 2016). Mass communication has also been

replaced by “person-to-person” communication as people tend to hear and believe

whom they know well (Agresta, 2010). Some of most important components of social

34

media marketing as mentioned above are the use of social media platforms for

encouraging users to spread social media marketing content via social media

marketing activities such as interaction, personalization, sharing, etc. (Rahman,

2017). Social media marketing is an effective process by which companies build a

strong relationship with customers, communicate with them and deliver online

marketing offering via social media platforms (Rahman, 2017). Another unique thing

about social media marketing is that it focuses on people, not product (Diamond,

2008). Products or services can be presented with many qualitative features and

promotional tools but what really matters are the comments and appreciations left by

the customers about the product or service, and this is the reason social media

marketing is so different and challenging for marketers. It is not the marketers or the

company that controls the marketing, it‟s the customers and users who do it through

social media. Both negative and positive word of mouth can be spread across the

globe in just a matter of minutes through social media. That is why marketers needs

to recognize the power of the critical nature of the conversations being hold by

consumers using social media. As a consequence, the ability of influencing the crowd

effectively is what is required from the marketers in the current era (Evans, 2008).

A company can benefit from social media marketing in a lot of ways. By

arranging marketing campaigns, a company can reach a bulk audience. The bulk

audience is not limited to customers only, rather it can include stakeholders,

employees, bloggers and potential customers (Shaik, 2012). Another benefit of social

media marketing is the wider reach. The resources on social media channels are

larger and wider as compared to offline sources. Social media also brings

transparency in the company. The company associated with social media marketing

is forced to be transparent as the social media attracts a huge audience that is

directly or indirectly linked or associated with the company (Sanchez Abril , 2012).

Also, the people associated with the company wants to know each and everything

about the company (Lacoste, 2016). Another important thing about social media

marketing is the marketers can listen, track and measure what is being shared on

social media sites and use this data for improving the product or services and tuning

everything according to customer‟s needs. Using the social media analytics and

metrics, the impact of social media on a company‟s marketing strategy, can be

measured relatively easily.

35

Another important type of social media marketing is Influencer marketing.

Influencer is not a new phenomenon, people are being influenced by other people

since the beginning of humanity. Whether it has been for religious, political or way of

life, there have always been leaders that directed and affected the decisions, way of

thinking and opinions of others. Katz and Lazarsfeld stated within their two-step flow

communication theory, that these are the people who have the ability to spread

information to others and thus gives more meaning and value to the information

(Katz. E., 2005). Therefore, influencers are „people who possess greater than

average potential to influence others due to attributes as frequency of

communication, personal persuasiveness or size of a social network (Non Business

Advisor, 2015). Keller and Berry define influencers according to the number of

followers and their reach. For them „influencers are well connected (and) have a

significantly larger number of groups than the average‟ (Jonathan & Edward, 2003).

De Veirman defines social media influencers as „content creators‟, which involves

them sharing personal information, opinions, experiences and inviting others into

their everyday life through online communities (De Veirman, et al., 2017).

Many studies show that the purchase decisions of people are more affected

by their closest surroundings and their living environment than by any classic

marketing approach (Kempe, et al., 2003). People trust their friends and their

recommendations for making a purchase. The Word-of-Mouth marketing association

revealed that „13 percent of all consumer sales are the result of word-of-mouth

sharing‟. Influencers have got the same power of persuasion as they are followed by

a huge audience and trusted by them. In terms of the social media, Social media

influencers are known as individuals that others view as a valid source to what to

purchase (Tuten & Solomon, 2015). Influencer marketing has become essential

within brands marketing strategies as customers are relying more on the opinion of

others when it comes to purchase something (Veirman, et al., 2017). Also, influencer

marketing, enables brands to reach a wider and targeted audience in a faster and

less expensive way as compared to other forms of advertising (Evans, et al., 2017).

85 percent of the U.S. companies are implementing influencer marketing in their

marketing strategy (Roy. A, 2016). According to eMarketer the most effective

marketing strategy is sponsored social messages transmitted through a person with

a great online audience: an influencer (Inc. C.em. and Reserved, 2015).

36

With the rise in the number of influencers, it is very crucial for brands to find

the right influencer. De Veriman (2017) mentions how identifying influencers is a

matter of reachability through the number of followers, while Araujo (2017) believes

it‟s the impact and diffusion of the communicated message that matters. In De

Veriman‟s views opinion leaders as the de facto influencer. Araujo (2017) considered

celebrities and public figures as the high reach influencers. Khamis (2016) refers to

influencers as micro-celebrities.

In the view of the earlier theories and concepts, two different types of

influencers can be determined, depending on their characteristics. The below table

gives an overview of how two types of influencers have been separated.

Table 1: Media consumption for US consumer

Source: (Goldenberg, et al., 2009)

The major difference between the two is not only their characteristics but also

the way through which their fame is created (De Veirman, et al., 2017). A micro-

celebrity is actively seeking fame by promoting their own personal brand to create a

following (Kapitan & Silvera, 2016). While, an opinion leader gets famous as a result

of their actions rather due to the need of being famous (De Veirman, et al., 2017).

The difference can also be seen in the type of content they choose to share. A micro

celebrity will post a lot of content focused on themselves, their lifestyle, their hobbies

(Khamis, et al., 2017). On the other hand, the majority of the content share by an

opinion leader is not focused on themselves rather on their specific interest and

knowledge (De Veirman, et al., 2017). In short, opinion leader is detached from the

content, whereas for micro-celebrity, their personality is their content. So, these

characters are helpful for brands in selecting the appropriate influencer.

37

The brands searching for influencers on Pinterest will need to remember that

Pinterest has a different nature as compared to other social media platforms. It is not

a place where you simply search for people who have many followers or short-term

engagement. Pinterest is different in terms of the engagement and the user

response. When a content is posted on Pinterest, it continues to be visited, looked at,

repined well into the future and the traffic keep on coming for a long time unlike any

other social media platform. On Pinterest, content lives forever. According to

wisemetrics, the half-life of a tweet – that is, the time in which you get 50 percent of

all the clicks and views – is approximately 24 minutes. While on Facebook, a post

has only 90 minutes of half-life at best (wisemetrics, 2019). The half-life of Pinterest

is 3.5 months. This means a single pin lasts approximately 1,680 times longer than a

Facebook post (Kohler, 2019). As a result, for doing successful influencer marketing

on Pinterest, brands should focus on somebody who is skillful in amplifying pins

through their Pinterest and should not focus on short term engagement.

Like any other social media platform, Pinterest relies heavily on its micro-

influencers. For Pinterest, micro-influencers are those users who have established a

solid reputation for pinning relevant, eye-catching, interesting content to a board

about a particular niche. They usually have small number of followers (500 – 5000)

but have a strong loyalty with these followers. Other important part of Pinterest is its

macro-influencer. Macro-influencers are those who have as many as 10,000 to

1,00,000 followers. They are often content producers, who have larger followings

brought over from where they originate their content.

Influencer marketing on other social media, like Facebook, Instagram, Twitter,

etc. focuses on people following those whom they recognize as a key influencer in a

niche. The focus is mainly on the outreach of the individual influencer and their ability

to engage their followers. The general thought about these influencers is the sense of

trust that the followers put in them. So, if they promote a product then their fans will

feel that the product must be good. So, in short, the content is less relevant for these

social media platforms. With Pinterest, it is the content that is important. If an

influencer creates a high-quality image, it could well be found six months later by

somebody searching on Pinterest. In this situation, the person who posted this

content is not important anymore, it is the content that has to stand up by itself. So,

the focus of brands, engaging in influencer marketing on Pinterest, should be more

on the content (influencermarketinghub, 2018). There are a number of websites that

38

brings the brands and influencers together. Hellosociety.com and

Openininfluence.com are two of the famous influencer marketing platforms for getting

in contact with Pinterest influencers.

After collaborating with an influencer, it is important to focus on measurable

data to evaluate the results and the outcomes on the collaboration. The most

common way to measure the results is through return-on-investment (ROI)

calculations (Hoffman & Fodor, 2010). Hoffman and Fodor view ROI for social media

as something different than the traditional ROI. They are of the view that social media

is about long-term investment in building your brand and creating awareness. To

measure the results of your influencer marketing campaigns, (Barker, 2016),

recommends analyzing the reach, engagement, impressions, and conversions of the

influencers‟ marketing message.

2.5 Advantages of social media marketing

Social media marketing offers a wide range of benefits for businesses. These

advantages enable companies to get great insights of their customers that can help

them in expanding and improving their businesses. Social media marketing allows

the businesses to fill the voids left in traditional marketing practices (Okazaki S. and

Taylor, 2013). This enable companies to reach a broader audience. On social media

platforms, people share the things they like, and companies get huge benefits from

these shares. These shares can be a company‟s products, services, etc. (Caruth,

2016).

The basic strategies of traditional marketing as marketing mix, social

responsibility and strategic planning are also part of the social media marketing. The

major difference exists in the way consumer and marketers communicate. The

traditional marketing focuses on one-way communication between the consumer and

the company. Companies have been trying to reach their target audience, mainly,

through advertising using the traditional media like television, newspapers and radio.

For example, using newspaper advertisements, a company has been able to reach a

large number of audiences within an expected geographical location. This type of

marketing is one-way communication as the marketer in creating a message for the

potential consumer. Now with social media marketing, marketers are able to use the

two-way communication. In all the social media networks, it‟s the user that creates

the content whereas in the traditional media marketing, publishers create the content

39

in a certain timetable, for example in a certain newspaper for certain days while

social media content is available round the clock. On social media each user creates

a small network in which they share and repost content that they created or from

other users. When some other user finds this content, they can choose to share it

further. This way the content shared on social media can spread widely (Juslen. J,

2011). In the traditional marketing, businesses try to reach certain goals and visions

by using marketing mix strategy. The marketing mix strategy includes product, price,

promotion and place. These are known as 4 P‟s. For a company the 4 P‟s means that

they need to sell the right product, at the right price, with the most effective promotion

tools at the right place (Tuten & Solomon, 2014). In social media marketing, a fifth

element can also be added in the 4 P‟s, which is participation. Participation mean

that the existing customers will create/bring new customers by participating in the

sharing of the marketing process (Tuten & Solomon, 2014).

3. E-COMMERCE:

The history of E-commerce is closely related with the history of internet.

Online shopping became possible when the internet was opened to public. The first

web page in the world was published in August 1991 (Brugger, 2009). It was a

simple, text-based web page. It had a few links and the main goal of the page was to

introduce World Wide Web to the people. Three years later, in 1994, the World Wide

Web Consortium was established, and HTML was defined as the standard language

for web pages. Since then the internet has been developing. The latest websites are

more colorful, sophisticated and more interactive unlike the older ones. The World

Wide Web has transformed the way business is conducted. It has opened new way

of communication for individuals and business, enabling global reach and easy

access. According to (Hoffman, et al., 1995), the web has become popular than other

internet services because of its ability to facilitate sharing of resources and

information globally. Prior to web, Electronic Data Interchange (EDI) was used in the

electronic marketplace by owners and buyers to interact electronically. EDI allowed

companies to perform varies business functions electronically. Since its arrival, the

Web has gradually replaced those (linked with EDI) proprietary networks making it

possible for all business, regardless of their size, to access the global market and

reach their customers and other businesses. The web is becoming more important as

an infrastructure and a tool that has enabled business to conduct commercial

functions (Wen, et al., 2000). In short, Web is providing a medium that facilitates two-

40

way communication between different actors. It has the technology that allows

businesses to use it for various purposes: as a sales tool, as a distribution channel,

as a customer support portal and as an informational retrieval source. It has

established a global commercial marketplace for both suppliers and consumers that

can operate internationally without time restrictions. It has revolutionized the whole

commerce and business industry.

For fully understanding the concept of „electronic commerce‟ or e-commerce,

one has to understand the broader concept of e-business. E-business is about

creating connections and information sharing through electronic means, both

internally in the organization and externally (Chaffey, 2011). So, e-business is all

about activities that involves connecting employees through an internet platform to

improve information sharing, facilitating distribution of knowledge, supporting after-

sale services, etc. E-business is a broad term that includes both e-commerce and m-

commerce (mobile commerce) (Tawfik & Albrecht, 2008). There are nearly as many

definitions of e-commerce as there are contributions to the literature. According to

one definition, „E-commerce is the process by which people use electronic means to

do business or do other economic activities. It is the process whereby traditional

trade is carried out by electronic methods‟ (Qin, et al., 2014). Turban shares a similar

view and defines e-commerce as, “Electronic Commerce (EC) is the process of

buying, selling, transferring, or exchanging products, services and/or information via

computer networks, including the Internet” (Turban, et al., 2006). Unlike the others,

Schneider has defined e-commerce in terms of data transmission, “Business

activities conducted using electronic data transmission over the internet and the

World Wide Web” (Schneider, 2006). Laudon and Trever focused more on the

relationship between actors conducting business and defined e-commerce as, “E-

commerce is the use of the internet and the Web to transact business. More formally,

digitally enabled commercial transactions between and among organizations and

individuals” (Laudon & Traver, 2003)

All these definitions are based on the same concept, yet they employ different

definitional approaches. Laudon & Traver (2003) limit e-commerce to transactional

business online whereas Schneider‟s (2006) defines it in a broader term and includes

business activities. The present study will take the view that e-commerce is a means

of selling goods/services through a website.

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Figure 12: E-Business versus e-commerce

Source: (Biccler & Saelens, 2015)

As seen in the above picture, e-business in an organization covers all

operating activities conducted over a data network, for example the internet. E-

commerce is limited to the online retailing implying financial transactions, so we can

say e-commerce is a sub-part of e-business (Biccler & Saelens, 2015).

There are various types of e-commerce website that focuses on different

areas of business activities. One of the most common e-commerce websites is a

business web portal. The main idea of these websites is to provide business

information to its internal staff, prospective customers and business partners.

Another common type of e-commerce website is a transactional website. This type of

website can operate a range of business activities, for instance online payments

(Carney, 2005). Transactional websites provide online auctions services and enables

interactions between sellers and buyers as well as between buyer. E-commerce has

truly revolutionized the way business is being done all around the world. The

continuous development of how the internet is used has made e-commerce one of

the most important platforms for sharing business information both within an

organization, business to business, and business to customer (Chong & Bauer,

2000). Due to the advancement in internet technologies and e-business, an

increasing number of traditional organizations are deciding to enter the internet

market by adopting e-commerce, resulting in effects such as increased profits, high

business volume and more competitive pressure (Chen, et al., 2013). Other benefits

of adopting e-commerce are lower cost of trading, faster and better-informed

business decisions, and less importance of geography (Smith, 1998).

42

3.1 Categories of e-commerce

E-commerce is generally classified according to the nature of the relationship

between the participants (Laudon & Traver, 2003); (Schneider, 2006) (Turban, et al.,

2006). Three most famous ways to categories e-commerce are given as: Business-

to-Business (B2B), Business-to-Consumer (B2C), and Consumer-to-Consumer

(C2C). These categories are valid for offline businesses as well.

3.2 Business-to-Business (B2B)

When a business sells goods or services to another business, it is known as

B2B. It mostly refers to supply chain (Gibson & Edwards, 2004). Before the advent of

Web, B2B existed in the form of EDI over proprietary networks. With the arrival of

Web, it became possible for businesses to link regardless of their size and location at

affordable prices. B2B generally includes wholesale transactions and is characterized

by large volumes, fast delivery times and possibly late payments. It generally leads to

higher profits through cost savings, reduced transaction costs, lower advertising cost,

lesser delivery costs, better supply chain management, and better information

exchange (Barnes-Vieyra & Claycomb, 2001).

3.3 Business-to-Consumer (B2C)

The practice of selling goods or services from businesses to individual

consumers is known as B2C. It is also known as e-tailing (Turban, et al., 2006). The

practice of B2C emerged only after the arrival of web and is appealing to both

retailers and consumers (Ariguzo, et al., 2006). The basic aim of B2C e-commerce is

to acquire new customers, to gain international exposure, to advertise, to overcome

location disadvantage, to provide online support, to gain cost savings, and to gather

customer information (Golden, et al., 2003)

3.4 Consumer-to-Consumer (C2C)

Customers selling goods or services to other customer is known as C2C. Well

known examples of C2C are the online auctions and online communities where

people can find customers for their goods and services. It can also be called

Consumer-to-Business (C2B) when the end user is a business. Both C2C and C2B

can be viewed as a kind of B2C (Chaffey, 2011); (Turban, et al., 2006).

In conclusion, the rapid growth of the internet and the advent of Web have led

to many changes in the way business is done, resulting in the e-commerce

phenomenon.

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3.5 Benefits of e-commerce

Doing business online has tremendous advantages. Companies can broaden

the scope of sales from local to global, increase sale opportunities, decrease

transaction costs, operate 24/7, access narrow market segments, exchange

information swiftly and accurately, enhance brand image, and improve the ability to

keep a strong customer relationship (Chaffey, 2011); (Turban, et al., 2006). Online

businesses will also have better information management, improved understanding

of the market, increase integration of the suppliers and vendors, and extended global

reach. Information regarding the behavior and preferences of individual and potential

customer can also be accessed and used through e-commerce. Consumers can also

have access to a larger market with more choices to select from. This helps in finding

more affordable goods and services, more choices, time saving and ability to shop

24/7 (Chaffey, 2011).

3.6 Limitations of e-commerce

There are also some limitations to doing business online for both the

businesses and the consumers. For businesses, the technology is still in the process

of evolution and lack universal standards for security, law and quality (Schneider,

2006); (Turban, et al., 2006). (Napier, et al., 2003) pointed out some general market

issues including language, political environment, and currency conversion as few of

the major limitation for a business running e-commerce. Traditional business also

faces problems in integrating with e-commerce (Turban, et al., 2006); (Schneider,

2006). Also, the benefits accrued to a company due to use of e-commerce is not

clear. This ambiguity may cause many companies to fail or not to invest in e-

commerce (Turban, et al., 2006). The consumers are also concerned about the

security and privacy of their personal data and many consumers wants to feel and

touch the product before purchasing (Napier, et al., 2003) (Turban, et al., 2006).

3.7 Drop shipping

E-commerce and global trade have resulted in increased market competition.

As a consequence of this high competition, demands for fast deliveries of low-cost

and high-quality products, and services have augmented (Fawcett, et al., 2000).

Accordingly, companies must continuously strive towards improving and enhancing

the efficiency in the supply chain in order to achieve competitiveness (Chaffey,

2011). This has caused a high competition amongst the supply chains, rather than

the end-products (Chaffey, 2011). Consequently, an efficient order fulfilment

44

becomes of great importance, which is considered as one of the most complex tasks

for electronic retailers (Ayanso, et al., 2006). Order fulfillment includes all the process

that concerns the customers‟ order; receiving the customer order, managing the

order, picking and packing, delivering the order, and additional after sale customer

services (Pyke, et al., 2001). The process of order fulfilment for e-tailers is different

from a traditional brick-and-mortar retailer (hereafter retailer), due to the larger

amount of small orders (Pyke, et al., 2001). Both e-tailers and retailers are pressured

by the shrinking product (Santamaria, 2004).

So, in an effort towards improving the efficiency of order fulfilment and

stabilizing the financial position, e-tailers commonly transfer the order fulfilment to

other actors. This can be accomplished by outsourcing the warehouse to a third-party

logistics provider. Alternatively, by drop shipping, where the distributor ships

individual orders directly to customers on behalf of the e-tailers, while exploiting the

e-tailers information and features (Tarn, et al., 2003). The practice of drop shipping

was mainly used by mail-order firms and companies selling bulky and large products

(Netessine & Rudi, 2001). It requires an extensive amount of real-time

communication within the supply chain, therefore it was not very successful

previously (Netessine & Rudi, 2001). However, with the advancement of e-commerce

and the improved communication, drop shipping has become a common means to

fulfil online orders (Ayanso, et al., 2006).

Ricker and Kalakota (1999) have defined drop shipping as consumer direct

fulfilment (Ricker & Kalakota, 1999). According to another definition it is outsourcing

inventory to another party (Chen, et al., 2011). A more thorough definition of drop

shipping is; “...an arrangement whereby the retailer forwards customers’ orders to the

wholesaler, distributor, or manufacturer, that fills customer orders directly from its

own inventory”. (Randall, et al., 2006). (Ayanso, et al., 2006) further refers to drop

shipping as a virtually joined supply chain of multiple actors, that has become a

method to achieve efficient e-fulfillment. One of the many benefits of drop shipping, is

the removal of large investments in warehousing and inventory. This enables the e-

tailer to focus more on actual sales and not worry about the operational tasks

(Ayanso, et al., 2006). All the operational tasks related to drop shipping are

performed by the drop shipper (Ayanso, et al., 2006).

45

Figure 13: Traditional order fulfilment versus Drop shipping

Source: (Randall, et al., 2002)

The above figure shows the difference between a traditional setting and a drop

shipping setting. In drop shipping, the products are forwarded directly from the

distributor to the customer. In this way, the e-tailer disclaims their responsibility of the

inventory. But all the information passes through the e-tailer (Netessine & Rudi,

2001). An integrated information system is required between the e-tailer and the

distributor to manage the e-fulfilment efficiently (Khouja, 2001).

3.8 Advantages of drop shipping

Many e-tailers failed to succeed in their businesses because of the high

warehouse investments, so by utilizing drop shipping these e-tailers could diminish

warehouse and handling related costs and could have a higher chance to succeed

(Randall, et al., 2002). By drop shipping the e-tailers can avoid costs related to

inventory, warehouse and logistics (Randall, et al., 2002). Drop shipping is easy to

start. Anyone with a laptop and an internet connection can start a drop shipping site

with minimal funds (Oberlo, 2019). Drop shipping also enables the e-tailer to just

focus on marketing and design, rest of the work can be outsourced. Moreover, the e-

tailer can decrease its costs due to the distributor gaining economies of scale in

transportation (Randall, et al., 2002). Also, the economies of scale in transportation

could be attained through serving different e-tailers (Netessine & Rudi, 2001). The

distributor also benefits from the drop shipping as they can increase sales (Randall,

et al., 2006). This increase in sales counters the decrease or fluctuation in demand

for the distributor (Chen, et al., 2011). The fluctuation in demand is also stabilized by

46

the distributor stocking inventory for several e-tailers at its own premises thus pooling

the demands (Randall, et al., 2006). Likewise, the e-tailer can also take benefit from

the distributors‟ improved planning, as it increases the product availability (Randall, et

al., 2002).

3.9 Disadvantages of drop shipping

Despite the many advantages, e-tailers have to be aware of the trade-offs

when engaging in drop shipping (Randall, et al., 2002). Another potential risk

involved in drop shipping is fragmented orders. It is a result of customers ordering

from several distributors, it can lead to either increased shipping costs or longer

delivery times due to order consolidation (Khouja & Stylianou, 2009). By engaging in

drop shipping, e-tailers are divesting part of their control to distributors which

increases the associated risks subsequently (Randall, et al., 2002). E-tailers also risk

losing the product margin, as the distributor generally increases the order fulfilment

price with ten to fifteen percent (Randall, et al., 2002).

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4. INTRODUCTION OF THE COMPANY

4.1 GonChas.com

The website selected for the thesis is called GonChas.com. The word

“GonChas” is basically a Balti word that means clothing. Balti is a language spoken in

the Northern part of Pakistan. The company was launched in 2016 as a drop-

shipping website. GonChas has generated over $270,000 in revenue since its

launch. It also has over 10,000 customers from all over the world with the majority of

them from the United States of America. It mainly deals with cheap women clothing

and accessories but there are also clothing for men and children. The items for

women include bags, dresses, jewelry, shoes, swimwear, tops and bottoms. While

for men the e-shop has bags, shoes, tops and bottoms. It also has a small collection

of clothing and outwears for children. There are no employees of the company, the

author is the sole worker and owner. The website is built on WordPress and uses a

plugin called “woo-commerce” that enables online purchases on the site. In addition

to that, there are many other plugins that help in the smooth running of the website.

The theme used for designing the website is called Flatsome. It has been

personalized by the author. The aim of the website is to outsource cheap clothing

items from Chinese ecommerce site aliexpress.com and to sell them on

gonchas.com for a profit. The working of the website is discussed in the following

sections.

4.2 Situation analysis

Situation analysis is a collection of methods used to analyze an organization‟s

internal and external environment to understand its capabilities, customers, and

business environment (Ryan & Jones, 2009). It consists of several methods of

analysis. This section will only discuss the five parts of the analysis that includes:

company, competitors, customers, goals and key performance indicators (KPIs).

4.3 Business

The first part of situation analysis deals with the business itself. In this part the

business needs to evaluate its objectives, strategy, capabilities and target audience.

Also, the business needs to decide what products to promote and whether or not

those products are suitable for online promotion. In the case of GonChas, the target

48

audience is present online and also the products are suitable for online promotion.

Hence the most suitable way to reach the target audience is through online

promotion. Also, the site has been running for a few years and has presence on most

of the major social networking platforms. This thing is helpful in reaching new

potential customers and staying in touch with the current ones. The shop has been

running and is generating some revenue since its launch. An overview of the sales

and orders for a selected period has been shown in the figure below.

Figure 14: Sales of GonChas last year (01.05.2018 up until 31.01.2019)

Source: (gonchas.com)

The figure shows the gross sale made during the period of nine months. The

left column shows the number of orders placed, while the right column shows the

total amount of cash collected for the orders. Other things worth mentioning are the

shipping costs, refunds and average monthly sales. All this information has been

displayed with different colors on the graph. The marketing done during this period

was mostly influencer marketing. The details of the strategy are discussed in the

influencer marketing strategy section.

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4.4 Competitors

There are so many similar websites to GonChas, on Pinterest, that have very

similar products and method of business. For the sake of this thesis, a few of those

competitors have been selected based on similar products and marketing strategy.

The author has done marketing for some of these websites and has knowledge about

the strategies used and the method of business. Most of these competitors have a

large budget so they are doing marketing on most of the major social media sites

and, they are using AdWords. This information has been acquired using Chrome

extensions called Facebook Pixel Helper and BuiltWith. Facebook Pixel helper

detects whether Facebook Pixel (JavaScript code for tracking website activity) is

implemented or not while BuiltWith provides information about tracking codes of

other similar websites like Google Analytics, AdWords, etc. The traffic data has been

acquired from third-party website worthofaweb.com. They use Alexa rank to estimate

traffic figures.

Table 2: Major GonChas competitors

Company Pricing Traffic/Month Items sold Year in Business

Cichic.com higher 220,000 Clothing and

Accessories

Since 2012

Fulchic.com higher 210,000 Clothing and

Accessories

Since 2015

Sammydress.com lower 200,000 Fashion, beauty and

household items

Since 2011

Source: (worthofaweb.com)

The analysis done by the author has shown that most probably these websites

are using paid advertising (AdWords, Media.net) and all of them have website

analytics in place. By doing a general google search it can be found that most of

these websites have a bad customer review and most of the customers have

complains about the quality of the items received and delivery times. Regardless of

all negative reviews, these sites are maintaining a good traffic and social media

presence.

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4.5 Customers

For doing the customer analysis demographics (age, education, gender) and

psychographics (interests, lifestyle and habits) are used. The data is acquired from

google analytics and Pinterest analytics. Pinterest analytics gives very valuable

information about the users that interact with the business. This information is of both

the people who have done a purchase through Pinterest and other people who have

followed, liked, shared or commented on the products from the domain gonchas.com.

As can be seen in the graph below, above 80 percent of the people that interact with

GonChas are female. The age group also is diverse as GonChas is popular among

both young and middle age women.

Figure 15: Total audience for the month of April 2019

Source: (Pinterest.com)

GonChas has its biggest audience in the USA. As can be seen in the figure

below USA makes more than 57 percent of the total audience GonChas get. The rest

of the audience is split in different countries with all having less than 5 percent of the

audience per country. This information is very useful while making the marketing

strategy. The countries where GonChas is not famous can be targeted for new

customers while in the country where it already has a good audience can boosted

more and the number of customers from that country can be increased by targeting

people having similar interests.

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Figure 16: Top location of the audience of GonChas

Source: (Pinterest.com)

The psychographic data has been acquired from google analytics. According

to the data acquired there are three major categories of people who interact with

GonChas. The first one is “Affinity Category (reach)”. Affinity Categories are interest

of people that can be used to reach potential customers to make them aware of the

brand. The second category is “In-Market Segment”. The users in these segments

are more likely to buy products and services in the respective category. The final one

is “other category”. This category contains the interest of users who are outside the

main categories and can be used as a source of additional information for targeting

new potential customers (Hines, 2014). The figure below shows the interest of users

in the three main categories.

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Figure 17: Interest overview of the audience of GonChas

Source: Google analytics

These categories of interests match most of the interest data from Pinterest

analytics. These data will be used in the Pinterest ads section for targeting the

audience. The data from Pinterest analytics for interest of audience is shown below.

Figure 18: Categories and interest of GonChas‟s audience

Source: (Pinterest analytics)

According to all the data the first buying persona is a female in her 20s, 30s,

and 40s, living in the USA. She is a student or a job holder having interest in fashion

and shopping online. She is a user of Pinterest and uses it for getting inspiration. The

53

second persona is in the same age group that includes women that are interested in

DIY and crafts, home decor, fashion, beauty and wellness living in the USA. DIY

stands for “Do it yourself” and means activities for which there is a choice between

doing it oneself of hiring someone else (Hill, 1979).

4.6 Goals

Having a well-defined and well formulated goal is important for every

business. The method of goal setting used for GonChas is called SMART. Smart is

an acronym for Specific, Measurable, Attainable, Relevant, and Time-bound

(Macleod, 2013). The first part of this goal setting method is “Specific”. GonChas is

aiming to double its sales by the end of this year. The measurable part aims at

increasing the monthly traffic to 50,000. Keeping in mind the past performance of the

site, the attainable part of the goal is to achieve $30,000 in revenue per month.

Relevant part of the goal aims at reaching more customers through Pinterest, as it‟s

the main source of traffic for GonChas. Time-bound part of SMART method is very

important as all these goals have to be within a timescale. So, by using the current

marketing strategy and improving it further GonChas‟s main goal is to achieve all

these goals within 1 year. All these goals will help in achieving the final goal, that is to

get maximum customer satisfaction and making good profit. The marketing strategy

is discussed in detail in the Findings and Discussion section.

4.7 Key Performance Indicators

Key performance indicators are the fundamental navigation instruments that

are used by managers to understand whether their business is going on the path

they planned or its going off grid (Bernard, 2012). The first set of metrics used as

KPIs, that will show how the ad is delivering are CTR, CPC, Clicks, Reach and

Impressions. They are discussed in the marketing section in detail.

The second set of metrics will show the return on investment. It will tell how

much of the resources were invested and how much is the acquired benefit. This

metrics includes Spending, Revenue, Conversions Rate, etc.

The final set of metrics will use the data acquired from the second set

(Spending, Revenue) and evaluate the overall financial viability of the marketing

campaign. The metrics that include in this set are Gross margin, Profit, Return on Ad

Spend, and return on investment (ROI). All these terms will be explained in the

marketing section.

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4.8 Working of the website

Figure 19: Working of the website

Source: (Author)

As mentioned earlier, the business model used by GonChas is drop shipping.

The author outsources viral items from Pinterest and other online sources and sell

them on GonChas for a profit. The most important part of this business model is

finding the right items. Without the right items, this method of business can be very

costly and low in profit. Therefore, the items put for sale on the website must be viral

and sell good. This can be done by various ways depending on the target audience.

As the focus of the website for marketing is Pinterest so most of the items are taken

from the trending and viral items on Pinterest. That is one of the main sources of the

most items on GonChas. The second method is finding out the best-selling items on

a similar website like GonChas. It can be done by searching for similar items on

Pinterest and then going to the respective website and finding the best sellers. The

bestselling items from a competitors‟ website can then be outsourced and offered for

a cheaper price. Once a viral item has been selected, it is then outsourced on a

Chinese website, in case of GonChas, AliExpress has been used. AliExpress

(www.aliexpress.com) is a leading global e-marketplace that is made up of small

business sellers that offer a huge variety of consumer products that have good value

for money. It is dedicated to bringing products in more than 20 categories to its

millions of registered users in more than 220 countries and regions (Y.Zhang &

Y.Zhou, 2015). The next crucial part is finding the items on AliExpress. There are

several ways to find and outsource the products on AliExpress. The ones used by

author have been explained below:

Finding the right

products

Outsourcing the

products

Finding reliable sellers

Putting item for sale on GonChas

Bringing sales by

marketing

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4.9 Using google image search

One of the most common methods, used by the author, for finding any visual

item on internet is by using google image search (Google, 2019). This option helps in

finding most of the websites where an image or item is present. The first step in using

this method is to have the image address. Image address is an internet address that

points directly to a specific image (Tineye, 2019). The image address can be found

by right clicking on the image. Once the image address has been found, it should be

copied and searched using the search box on google.com. The below figure shows

how to get the image address. One important thing to note here is that the image

address should end with .jpg, .png, or some other image format extensions. Some of

the image addresses can have extra characters or numbers at the end that must be

removed for getting accurate results.

Figure 20: How to copy an image address

Source: (Pinterest.com)

Once the image URL is searched on google, the option “search by image”

should be clicked as shown in the figure below. Once it has been done, google will

show all the websites that have this item. These websites don‟t necessarily have to

have the item on sale. Some of the website are blogs where people use the image

for informational purposes but most of the results will have the item for sale.

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Figure 21: How to search an image on google.com

Source: (google.com)

In our case the first page gave two results and their links to sellers on

AliExpress.com, as can be seen in the below figure. Although it is not the case every

time. Sometimes it does not give any results related to AliExpress and in some other

cases tens of pages have to be gone through for finding the desired results. In such a

case, different images of the same item are used in the search box until the desired

results have been achieved. The search results can also give you valuable

information about your competitors, as it also lists other websites that are selling the

item and most of the time, they are also drop shipping website. So, it can give some

idea about the price of the item and also these websites can be used as a source for

finding new best-selling items. In general, this is an easy method and most of the

time the items are easily outsourced.

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Figure 22: Image search results on google

Source: (google.com)

4.10 Using AliExpress image search option

The other method for finding items on AliExpress is using the image search

option. This is a newer and easier method and is only available on AliExpress App.

For using this method, the user needs to take a picture of the item, they want to

search. The picture can either be taken directly by the phone‟s camera or

downloaded on the phone from its source and then uploaded to the AliExpress App

image search. The below figure shows the home screen of AliExpress mobile App.

The small camera sign on the top right is the one used for image search. Once it is

clicked, the camera of the phone opens and gives the user option to either take an

image or upload one from the phone gallery. Once an image is selected, the App

searches for similar items on the shops and displays a list of the closest items to the

uploaded image.

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Figure 23: Home screen of AliExpress mobile App

Source: (AliExpress Mobile App)

The below figure shows the results for the viral item selected earlier for

research. This list shows all the sellers that have the item for sale. One of the most

crucial part is selecting the right seller from this list. One of the methods employed by

the author for making a selection is to check the ratings and reviews of the sellers

and the listed item. The price of the item and shipping cost are also important factors

in deciding the seller as the main aim of GonChas is to make a profit. One of the

major issues, the author faced, with deciding the seller according to the price of items

was that the items listed for lower prices were mostly of very low quality. This thing

impacts the whole customer experience and gets a negative feedback to the

company. So, for making the right choice of the seller, all the mentioned factors,

sellers rating, years the seller is on AliExpress, ratings the item has got, total number

of sales the item has got, delivery time, sizes/stocks available, price, etc. should be

kept in mind. Other important factors for making the right choice of the seller are

shipping time, buyer protection and positive feedback percentage.

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Figure 24: Image search results on AliExpress mobile App

Source: (AliExpress Mobile App)

Shipping time is the time duration taken by an item from its point of origin to

the point of delivery. This time varies depending on the country a customer resides. It

is also very crucial as all the customers are International. So, it has to be made sure

that the seller can deliver the items within a reasonable time frame. On GonChas, the

average delivery time for USA and EU is 15-35 business days. This is just an

average time period decided by the author from his personal experience. Another

important thing to remember is the buyer protection. Buyer protection ensures that

the customer will receive their order on time and as described. In case, the shipping

is delayed, or the item is not as described, the customer gets a compensation

(Aliexpress, 2019). Most of the sellers on AliExpress offer buyer protection.

4.11 Contacting the Seller

Once the right seller has been chosen, next step is to send the seller a

personal message asking them for some discount for drop shipping their products.

Based on the author‟s personal experience, in most of the cases, the seller agrees to

offer 5-10 percent sale on the selected items if the order will exceed 5 items. The

other important thing to ask the seller is the stock of the item and the sizes available.

The seller must have enough stock of the item and all the sizes. From the authors

personal experience once, an item gets viral on Pinterest, the amount of sales can be

very high so in case the seller does not have enough stock, it is wiser to find another

seller with enough stock. Also, the sizes of items are important as a lot of people

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from different age groups buy online. Another thing worth doing is asking the seller

for real images of the items because most of the time the product is displayed on

some model, so it is wise to get the real images of the product just to be sure it is the

same product as displayed on the model. As mentioned earlier during the image

search section, a lot of sellers use the same image of an item, so it is very tricky to

find whether the real item looks the same or not. In most of the cases, the real

product looks very different than the one displayed. So, either the seller has to send

real images of the item or some products need to be ordered from the seller, just to

make sure the quality of the product is good. After getting all this information and

making sure the seller has enough stock and the item is same as being displayed, it

is time to decide the pricing.

4.12 Deciding the Price

One of the most important part of the whole process is deciding the price.

Business with the most success and experience in e-commerce are beginning to

realize that the key determinants of success or failure are not merely a good website

design and low prices but good service quality (Yang & Jun, 2002). So, the main aim

is to charge a reasonable price but provide the best possible customer experience.

From the authors personal experience, the pricing of the item can vary depending

upon the price the seller is offering it for. The pricing model used for GonChas is

markup pricing. In this method all the costs of purchasing or producing are calculated

and then a desired markup is added as the profit (Sammut‐Bonnici, et al., 2015). For

the items under $10, the price is doubled. For items between $10 and $20, an

additional $5 to $8 are added over the original price. In case the prices are over $20,

an average margin of 30 percent profit is added.

Some of items are special, in high demand and of very good quality. These

items can be sold for a profit margin. They can bring good profit and can help in

improving the overall sale targets. But in general, the final price should be covering

all the expenses related to the running of the website, its marketing, etc. and leave a

margin of profit according to the markup pricing mentioned in the last paragraph.

After the pricing is decided, the item can now be added to the drop shipping website.

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4.13 Putting the item for sale:

After finding the right seller and deciding the price of the item, the item is now put

on the website for sale. There are two methods for importing the items from

AliExpress to the target website. Firstly, it can be done manually by copying the

images and other information from AliExpress and pasting it on the target website.

Second method is by using some plugin to do it automatically. There are few free and

paid plugins in market that can help in importing the desired products from

AliExpress with ease. In both the cases, it should be made sure that the images used

do not have any watermarks, the images are high quality, the size of images is not

very big or small, etc. All these things can have an impact on the overall user

experience, so it has to be made sure that the user gets the best experience

possible, whether it is about the display of the item, navigation on the website or

product details like the sizing and material details.

Once the item is published on the website, it can now be promoted on Pinterest.

Two major marketing methods will be discussed in the following section. The first one

is Pinterest ads and the second one is influencer marketing. The author has used

both the methods for promoting items from GonChas.com on Pinterest. All the results

and findings will be discussed, along with recommendations for the best practices to

get the desired results.

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5. FINDINGS AND DISCUSSIONS:

5.1 Planning Marketing Strategy:

Everything related to marketing should start with a careful planning of a

campaign. A campaign has to have a well-defined objective. Especially, if social

media is going to be used for the campaigns, the marketers need to further plan who

they want to reach out to and what kind of social media strategy they are going to

execute. During the execution process marketers needs to be ready to adjust the

strategy according to the responses (Tuten, 2008). Kaplan (2010) advises marketers

to choose social media platforms based on the target group and the message that

they want to convey. He also points out that, choosing an existing social media

application has many benefits because of the existing user base. The reason why

this can be a hard task is the fact that the landscape of social media is constantly

changing. The social media networks that were popular a few years ago are not

popular anymore and similarly many new social media networks have emerged in the

past few years. All these rapid changes in the industry puts a high pressure on

marketers to keep their marketing strategies up to date and bring on changes with

the changing landscape.

In order to create the right campaign and stay up to date on social media,

Tuten (2008) has formed a list of questions for social media marketers that will help

them in understanding what they really need, in order to find the right tools for their

campaigns. Few important questions are: “Does the culture of social media fit your

brand‟s positioning or fit with how your brand wishes to be percevied? Do you know

where your customers and prospects are? Are the relevant communities open and

welcoming to brand participation? What opportunities exisit within each community

for brand promotion? Do you have resources of time and money to commit to the

campaign? Do you have a hook, a conversation starter, a point of engagement –

something that will inspire interaction with your brand? Are you willing to take risks?”

(Tuten, 2008).

Once you have answered these questions and selected the right social media

platform, it is time to carefully make the communication plan. Kaplan and Haenlein

(2010) provide some good principles about being social. First principle is to be active,

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taking part in discussions and sharing with the community something of value or

interest. Secondly you should also understand the nature of the channel and by

being interesting with your content, humble with your position and behaving

“informally” you should aim to blend in. However, in social media network like

LinkedIn, it may still be wise to keep the communication professional. Last principle is

to be honest (Kaplan & Haenlein, 2010).

5.2 Performance Measurement

As mentioned in the situation analysis section, performance measurement is

one of the most crucial parts of the marketing strategy. It provides valuable

information about the goals and the performances of the ad campaigns. This

information can then be used to find out whether the set goals are being achieved or

not. In the following section, the metrics available in Google analytics and the

Pinterest analytics metrics is discussed.

5.3 Google Analytics Metrics

Google analytics is a free analytics service offered by google that gives useful

insights into how users find and use a website (Kaushik, 2009). It gets all the data

from a unique code that has to be implemented on the website whose data is

required. The code is a small JavaScript code that runs when a user opens the

website. Precisely, it can be said that Google analytics helps marketers make

important decisions based on the data collected from the users. Few of the most

used metrics available in Google analytics are as below:

Users

Sessions

Session duration

Bounce Rate

Conversion Rate

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Figure 25: Google analytics homepage showing common metrics

Source: (Google analytics)

The above figure shows the Google analytics home page for GonChas. The

first two metrics; Users and Sessions are the crucial ones, as they are closely

related, and their difference has to be understood good. A Session is defined as the

time range between a user‟s first request on the website to the last one. It is basically

a single visit, consisting of one or more pageviews, along with other events, for

example, ecommerce transactions, etc. While the metric Users gives figure of unique

visitors who have visited the website during the selected time range (Kaushik, 2009).

Bounce Rate can be simply defined as the percentage of sessions with a

single pageview. This metric shows the percentage of people who visited just one

page of a given website and left without browsing through the website (Kaushik,

2009). This is very useful information as it can give useful information about the

performance of the page and helps in the improvement of the overall website. The

average bounce rate can vary depending on the type of website. It a site has a high

bounce rate with good conversion it should be fine. The average bounce rate for e-

commerce industry is around 30 percent (Corell, 2015). Session Duration gives the

average time a user has spent during their visit. Google Analytics does not count the

time for the last page viewed during a session and that means the average session

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duration tend to be lower than the actual amount of time people is spending (Brian,

2012). Another important metric, especially for e-commerce websites, is the

Conversion Rate. It is defined as the number of conversions divided by the number

of unique visitors (Kaushik, 2009). Another metrics worth mentioning is the Cost per

conversion. It is calculated by dividing the total money spend on advertising by the

number of conversions (Kaushik, 2009).

5.4 Pinterest Ad Metrics

A part of the marketing will be done through Pinterest Ads, so it is important to

familiarize with the Pinterest Ad Metrics. They can be accessed easily on the

Pinterest ads manager page. Pinterest also has the most common metrics like other

similar websites. The ones that will be used in our study are as below:

Click through rate (CTR)

Cost per click (CPC)

Cost per mille (CPM)

Impressions

Engagements

Spend

These metrics give valuable information for evaluating the ad campaign. Although

these metrics are very useful, it should not be used as a final resource for deciding

the performance of a campaign rather more weightage should be given to the

conversion and return on investment.

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Figure 26: Pinterest ad manager and metrics overview

Source: (Pinterest ad manager page)

Click through rate (CTR) gives the percentage of people who click on an ad

after seeing it. It is generally calculated by dividing the number of people who clicked,

after seeing an ad by the total number of impressions the ad received. Cost per

click (CPC) means the amount of money an advertiser pays, every time when their

ad gets clicked. Cost per mille (CPM) tells the amount of money spent for getting

one thousand impressions of the ad (Louisa, 2008). Impressions means the number

of times the ad appeared. Engagement is the total number of engagements on the

ad. It includes saves, closeups and clicks. Spend means the total amount of money

that has been spent for any given ad or campaign (Pinterest, 2019).

5.5 Pinterest Advertising strategy:

After carefully going through every step of the marketing strategy, it is time to

make the Pinterest advertising strategy. For effectively launching a marketing

campaign, it is necessary to have a strategy. The strategy varies depending upon the

type of business, as every business is unique. This chapter will deal with the findings

and discussions about Pinterest marketing and advertising.

5.6 Pinterest Business account:

The first prerequisite for advertising on Pinterest is a Pinterest business

account. It is free to sign up for a business account and gives access to tools like

analytics and a special business profile. It also gives access to use the Pinterest

advertising. Any business can, either, sign up for a new account or if they already

have an account upgrade it to a business one. The sign-up process is very easy and

straightforward.

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Steps to create a Pinterest business account are as below:

1. Go to the Pinterest business homepage and click Join as business

2. On the sign-up page, put your email and password and click create account.

3. On the next page you will be asked to choose a language and country.

4. Next step is writing the business name and select the type of business.

5. There are nine options to select from namely professional, public figure,

media, brand, retailer, online marketplace, local business, institution/non-profit

and other.

6. Next step is putting down the website address. This step is not mandatory so if

the business does not own a website, it can be skipped.

7. The next step gives the option to connect other social media account with the

Pinterest business account. Currently only three other social media accounts

can be connected, namely, Instagram, Etsy and YouTube. This step is also

not mandatory and can skipped for later.

8. Next step asks about that topics that best describes the business. At least one

topic has to be selected in this step.

9. The setup process ends here.

Figure 27: The sign-up page for Pinterest business account

Source: (Pinterest.com)

Once the business account has been created it is advisable to take the

following steps to optimize it.

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The next step is adding a profile picture. It can be done by hovering over to

the profile icon on the top right and clicking settings. The optimal size of is 165 x 165

pixels. Choose an image that best represents the business. It can be the business

logo. Complete the about section with some information about the business. If the

business has a physical location, fill it in the location option. Claiming website helps

in getting access to analytics and information about the users that interact with the

business.(Newberry, 2018)

Figure 28: The account settings page of Pinterest business account

Source: (Pinterest.com)

5.7 Pinterest ad account

Pinterest ad account is an optional pay-for-placement service that offers

marketers the chance to reach their targeted audience. It has got all the tools needed

for making ad campaigns. In addition to driving awareness, brands using Pinterest

ads see results in terms of sales. More than half of Pinterest‟s users have made a

purchase after seeing some business content of their interest (Pinterest, 2018).

The process of creating an ad account is very easy. From the top right of the

home page of normal business account the ad account can be accessed. Once the

option Ads is selected, the screen below will pop-up. The name of the account and

the country is selected depending on the location of business and the billing address.

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Figure 29: Pinterest ad account page

Source: (Pinterest.com)

The next step is setting up the billing. The billing page looks like the screen

below. Here the name of the business, address, city, postal code, phone number,

etc. are filled. Once the information is filled, the next step is filling the payment

method. Pinterest accepts Visa, MasterCard and American Express for payments

(Pinterest, 2019). After filling the payment method, the ad account is ready to get

started.

Figure 30: Setting up billing information screen

Source: (Pinterest.com)

5.8 Pinterest Tag

Another important point to mention here is the Pinterest tag. It is a piece of

code that advertisers can add to their websites to help track the actions of visitors

(Pinterest, 2019). The process of implementing Pinterest tag is very similar to

Facebook and Twitter‟s version of conversion tracking. The process of

implementation can be found in the Conversions tab of the Ads menu, that can be

accessed from the top left of the home feed. It is important for two main reasons:

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1. It allows advertisers to understand the overall impact of their campaigns and

promoted pins. It also allows Pinterest to monitor the conversions and give the

advertiser a more refined and more accurate data.

2. It allows the advertisers to retarget the audience coming to their websites

using Pinterest.

As can be seen in the figure below, the Pinterest tag, consists of two parts: the

base code and the event code. The base code is needed to track measurable events.

This code has to be implemented in the domain. The event code tracks specific

actions that occurs on the advertiser‟s website. This code should be placed on the

pages where specific events can occur, for example, the product pages where a

visitor can add something to cart, checkout, etc. (Pinterest, 2019).

Figure 31: Pinterest Tag installation screen

Source: (Pinterest.com)

The Pinterest ads are also called Promoted Pins. Once the ad account is

ready, ad campaigns can be made from the top left corner of home feed. Setting up

and ad campaign has three steps. The first step has been shown in the figure below.

The important thing to consider here is selecting the right type of campaign. Pinterest

has categorized the campaign into three depending on the objective. The first one is

Build awareness campaign. Under this category is the Brand awareness. This

option helps new brands in reaching targeted audience for promoting their brand,

products or a service. Another option under the Build awareness campaign is Video

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views. This one is straight forward as this campaign brings view on a video that is on

Pinterest. The second category is Drive consideration. Under this category the first

option is Traffic. As the name suggests, this campaign is specifically designed for

marketers who want to drive traffic to their websites. The next one under Drive

consideration is App install. This is for advertisers who want to promote their Apps.

The last category of campaigns is Get conversions. This option is suitable for e-

commerce website as all the conversions can be tracked using the Pinterest tag.

After selecting the desired campaign a few more details are required in the

campaign details section, as can be seen in the below figure. These details include:

Campaign name, Daily spend limit and Lifetime spend limit. As the name suggests,

the Daily spend limit is the maximum amount the campaign can spend in one day

while the Lifetime spend limit is the amount the campaign is approved to spend in

total (Pinterest, 2019). Once these details are filled, the use can go on to next page

by clicking the continue button.

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Figure 32: Setting up ad campaign step number 1

Source: (Pinterest.com)

This step is very important as the target audience is selected on this page. As

can be seen in the figure below, the available targeting options include Genders,

Ages, Locations, Languages, Devices, Interests and Keywords. All these features are

selected according to the metrics data from both Google and Pinterest analytics. It

also gives information about the potential audience for the selected targeting options.

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Figure 33: Setting up ad campaign step number 2

Source: (Pinterest.com)

Once the right audience has been selected, the user can move on to next

step. This is the final step and here the user needs to select the product for

promotion. After selecting the product and making sure the destination URL is

working, the campaign can be launched.

5.9 Pinterest Advertising Plan:

Out of the gathered data from the above chapters, the following advertising plan

has been formed. This part will deal with the preparation, launch, evaluation and

other details about Pinterest advertising. The advertising plan consists of the

following points:

1. The company GonChas allocates an investment of $100 for the advertising

campaign.

2. The length of the campaign is one week.

3. The two buying personas mentioned in chapter 4.5 are used.

4. The interests and professions for targeting are taken from Google and

Pinterest Analytics data.

5. The main goals are: acquire traffic, increase conversions and increase sales.

6. The final evaluation is based on total profit made and the return on

investment.

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5.10 Campaign objectives

The main objectives of the ad campaign are to drive traffic that can convert

and increase the sales of items. These objectives can be divided into two phases and

it is important to understand the objectives of each of them. The first phase is the

consideration phase. In this phase, the objectives are getting more traffic on the site

and engaging the audience. The second phase is the Conversion phase. As the

name suggests, the objectives of this phase are more product sales and more

conversions (Kim, et al., 2011). Conversions can be any activity that is done on the

site by the user, it can be signing up for the newsletter, following the brands‟ social

media accounts, watching a video, spending a specific amount of time, etc. (Kim, et

al., 2011).

The main idea of Traffic is to drive cheap click-through to the website. The

downside of these clicks is that most of the visitors will leave the site without

purchase. These visitors are ideal for retargeting. The best way to motivate these

potential customers to complete a purchase is by offering some benefits (Kim, et al.,

2011). GonChas is usually getting a CTR of around 1.2% that is considered low in

comparison to the average CTR of 2.69% for an e-commerce website (Irvine, 2019).

So, the CTR for GonChas can be improved by improving the targeting and interests

of the targeted audience. Also, the products selected for advertising play a vital role

in deciding the CTR that the site receives.

CTR is vital as it brings potential customers to the website, but the more

important part is the conversion. The primary benefit of Pinterest Tag is the tracking

of Conversions. It can track various actions like Checkout, AddToCart, Signup, etc.

Besides, it can also track if people do searches on the website for any products

(Pinterest, 2019). The main objectives of the campaign for GonChas are to increase

the CTR and get more conversions/sales.

5.11 Audiences

Four types of audiences can be selected for an ad campaign, namely:

Site visitors

Engaged audience

Actalike audience

Custom audience

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Site visitors are the group of users that visits a site. They can be the visitors going

to the site through the products shared on Pinterest or the ones visiting the site

through Pinterest ads. There is also an option of including or excluding traffic sources

for this audience (Pinterest, 2019). The site visitors on GonChas were 15000 per

month during the launch of the marketing campaigns and above 95% of the site

visitors were coming from Pinterest.

Engaged audience is the group of users that engaged with Pins from the domain of

the website. These users can be the ones that have saved, liked, commented or

shared any of the products or pins from the domain of the website (Pinterest, 2019).

According to the Pinterest analytics data GonChas has 40800 engaged audience per

month. This number keeps on changing and depends on the number of products

shared, clicked, liked, or saved every month.

Actalike audience is an audience that behaves similarly to the audience that a

website has (Pinterest, 2019). This audience can be a target for new potential

customers.

Custom audience is a special type of audience that can be uploaded to Pinterest

audience. This is basically a list of customers that is taken from the website or any

other targeted audience taken from a similar site (Pinterest, 2019). Site visitors and

engaged audience is targeted in the ad campaign. GonChas has a list of over 10,000

customers who have done purchasing from the site. The data of these customers can

be uploaded on Pinterest and used as a custom audience for improving the targeting.

5.12 Optimization and delivery

For the Traffic option, Pinterest ask the marketer to bid for the selected

audience. The minimum bid available on Pinterest of the CPC (Cost per click) bidding

model is $0.10, while the recommended can be anywhere from $1 and above

depending upon the selected audience. Similarly, the minimum bid for CPA (Cost per

action) model is $0.10 and for CPM (Cost per impression) model is $2.00 (Pinterest,

2019).

The advertiser can either put the bid manually or accept the recommended bid

from Pinterest. Manual bidding and CPC model are used for the advertising

campaign of GonChas. The main reason for selecting the manual bidding is the

expensive recommended bid. For the buying persona selected for GonChas the

recommended bid was $2.1 per click.

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5.13 Ad Formats and Placements

Currently Pinterest offers three ad formats, namely: Promoted Pins, Promoted

Carousels, and Promoted video pins. All of these formats have been discussed

below.

5.14 Promoted Pins

A Promoted pin ad is exactly the same as any other pin on Pinterest. It blends

good with the pins on Pinterest and does not affect the user experience. The only

difference between a Promoted pin and a normal pin lies in the fact that the promoted

pin has the term “Promoted by” under the pin followed by the company or brand

name. An example of a promoted pin is shown below.

Figure 34: Promoted Pin example

Source: (Pinterest.com)

5.15 Promoted Carousels

Promoted carousels feature two to five images that pinners can swipe through.

These multi-image ads can appear like a normal pin, except for the dots beneath that

shows the images can be swiped. Each image in a carousel ad be different with a

different title and description. This format is great if the advertiser wants to use

different images in the same ad (Pinterest, 2019). Below is an example of a

promoted carousel.

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Figure 35: Promoted carousel ad

Source: (Pinterest.com)

5.16 Promoted video Pins

Promoted video pins are the same as Promoted pins except the normal pin is

replaced with a video. Just like a Promoted pin, it also appears in the home feed and

search results. Promoted Pins has been used in the campaign for the study.

5.17 Campaign Launch and Evaluation

The campaign ran for seven days (May 4th, 2019 – May 11th, 2019) and used

all the allocated budget. A total of two products are selected for promotion. The

products are women summer dresses. The products are chosen according to the

current season and demand. The buying persons, already mentioned in chapter 4.5,

have been used. If the interests and demographics of these buying persons are as

below:

Women‟s Fashion

Dresses

Summer dresses

Women‟s apparel

Only USA

The ad format selected was Promoted Pins. These ads had one image per

product. The images selected were taken from the seller‟s page on AliExpress.com.

The reason for selection of Promoted pins instead of Carousel ad was because

Promoted Pins performed significantly better than Carousel ads in a test campaign.

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Carousel ads had 0.95% CTR with $0.18 CPC while Promoted Pins had an average

of 1.80% CTR with $0.18 CPC. The CPC is the same for both because it was

selected manually.

One campaign was selected with the goals of Traffic and Product sales. The

campaign targeted audience with the below interest:

o Home Decor (Interests)

o Women‟s Fashion (Interests)

o Beauty (Interests)

o Women Jewelry and accessories (Interests)

o Women‟s Top (Interests)

o Online shopping (Interests)

o Fashion Trends (Interests)

o Makeup and hair (Interests)

5.18 Traffic Campaign

The settings of ad sets for the traffic campaign was: daily budget $20, CPC of

$0.18 was selected manually, ad placement both newsfeed and search, the interest

was narrowed down to the interests from the Google and Pinterest analytics,

audience were only women between 18 to 44, location selected was only USA,

English was selected as the language of the targeted audience, devices selected

were Android, iPhone, and web, and normal pacing was selected for the ad. The

Pinterest Ad showed a potential monthly audience size of 42m-56.8m for the

targeting criteria selected. Every ad contained one viral image of the product, a title

and relevant hashtags were used in the description.

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Figure 36: Promoted Pin

Source: (Pinterest.com)

The traffic results for one-week campaign is shown in the figure below. All the

metrics are acquired from Pinterest Ads report. The ROI and conversion rate are

calculated separately as they needed data from both Pinterest ads and GonChas

site. The number of clicks has been taken from the Pinterest ads report while the

number of sales has been taken from the GonChas site. The total amount of sales is

taken from the GonChas site while the Pinterest ad gave the total amount spend on

the campaigns:

Figure 37: Traffic Campaign Results

Source: Pinterest business account

A total of 4 orders were placed during this time and the total gross sales

achieved by the two items was $160.85, as seen in the figure below. This amount

also includes the shipping charges. Both the items had free shipping on AliExpress,

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so the shipping costs is also included in the total amount of sale. The below data has

been taken from the GonChas website.

Figure 38: Sales overview for the traffic campaign 04.05.2019 up until 11.05.2019

Source: GonChas analytics data

5.19 Overall evaluation of the Traffic campaign

The ad campaign as a whole was not profitable. The promoted items received

a total of 744 clicks. The total impressions were 32,460. The CPC was $0.18. One of

the items got a CTR of 2% while the other got CTR of 1.19%. The total amount spent

on the ad campaign was $133.76 for the period of one week. The gross sale during

this period was $160, out of which $75 went into order fulfillment. The overall loss

was $48.76 with a ROI of negative 36%.

The campaign was not able to reach the set goals. The overall CTR was

around 1.66% which is lower than the industry standards of 2.69% (Irvine, 2019). The

conversion rate was also very less as only 4 people placed orders out of 744 people

who went on the site. It was calculated by dividing total purchases by the total link

clicks. The items promoted were two summer dresses for women. Both of them were

selected from the viral dresses on Pinterest so a higher conversion was expected

from them. The bounce rate was around 63% during the period of Pinterest ad

campaign. That‟s higher than the standard bounce rate for e-commerce sites. The

optimal bounce rate for e-commerce and retail websites is 20%-40% (Pawel, 2018).

There are various reasons for a high bounce rate. Few of them are:

81

Slow load time of the page

Poor site navigation

Not enough product information

Poor product photos/description

Not enough trust signals

In case of GonChas the page loading time is 3 seconds that is a lot faster than

the average loading time of a landing page found by google as 22 seconds

(Googleapis, 2017). The navigation and product information are also clear. The

possible reasons for the high bounce rate can be poor product photos/description

and not enough trust signals. In the future campaigns, these two issues will be

addressed, and the outcome will be compared.

5.20 Influencer Marketing Campaign

As mentioned in the previous sections, one of the methods used for promotion

of GonChas is influencer marketing. This chapter will deal with the details of

evaluations and findings of influencer marketing for GonChas.com.

5.21 Campaign launch and Evaluation

The influencer marketing campaign data has been collected for the first three

months of 2019 (January 1st – March 31st). The total budget allocated for influencer

marketing was $1000 per month. A total of two influencers were used for marketing

the products directly from GonChas‟s Pinterest account. One of the influencers has

2.6 million followers and the other one has 2.5 million followers. Both the influencers

work in the fashion niche, so it was a perfect match for the products of GonChas.

Most of the Items promoted during this period of time were from the following

categories.

Women‟s Dresses

Women‟s Jewelry

Women‟s bottoms

Women‟s tops

Every influencer posted 2 pictures of the same or different products every day for

three months. The total traffic received during this period was over 65,000 unique

visitors and pageviews of over 231,000. The following figure from Google analytics

show the stats of GonChas for the selected period of time.

82

Figure 39: Traffic received during first three months of 2019

Source: (Google analytics)

A total of 456 orders were placed and 648 items were purchased during these

three months. The gross sale amount was $16,423.

Figure 40: Sales on GonChas from 01.01.2019 up until 31.03.2019

Source: (GonChas.com)

83

5.22 Overall Evaluation of Influencer marketing

The overall influencer marketing campaign was a success. The total amount

paid to two influencers for three months was $3000. The total revenue acquired

during this period was $16,423. Out of this amount, $9000 was spent on fulfilling

orders, $3000 was paid to the influencers, and $500 was paid as the site running

expenses. The remaining amount was $3923. After deducting income tax, $3334.55

was left as profit. So, by using the influencer marketing on GonChas a total of

$3334.55 was made as profit with ROI of positive 111.13%.

5.23 Comparison of Pinterest ads and Influencer Marketing

After the careful examination of both the types of Marketing, the results

acquired through Influencer marketing were a lot better than the results acquired

through Pinterest promoted ads. One of the main reasons for this huge difference is

the greater reach of Influencer marketing as compared to Promoted pins, in terms of

the amount spent. In Promoted pins, every click the ad gets has to be paid, while in

influencer marketing, a fixed amount is paid upfront to the influencer and the

clicks/traffic keeps on coming for a long time without any extra payment. In the case

of Pinterest ads, the reach stops once the amount has been used. The second

reason for the difference in results was the limited budget and the short time

allocated to Pinterest ads. The results could have been different if a higher budget

and a long period of time was selected.

84

CONCLUSIONS, LIMITATIONS AND FUTURE PERSPECTIVES

Social media is becoming an integral part of our everyday life. People are

spending tens of hours every week on social media, either through their smartphones

or computers. This thing has led many companies to spend a significant amount of

money on doing social media marketing. But without a proper strategy and

understanding, these marketing campaigns do not bring any fruits.

The first step in making any marketing campaign is understanding the target

audience. All the visitors to a business are not necessarily the same. These visitors

fall in different categories. Some of them are there to buy, others are just considering

buying while few others are not sure if they want something. So, for targeting the

right customers a strong and targeted marketing plan is inevitable. The second step

involves creating the marketing strategy. It involves a careful analysis of the

business. This analysis includes finding the interest and demographics of the current

customers. Because without knowing these traits of current customers, the business

cannot find the potential customers. Setting goals is also an important part of the

strategy. These goals have to be specific, measurable, attainable, relevant and time-

bound. All these points are very important to remember while creating a marketing

campaign.

Promoted pins/ Pinterest ads are quite new as compared to advertising on

other social networking sites like Facebook and twitter. For setting up a successful

advertising plan on Pinterest a good marketing strategy has to be made. All the

essential parts of advertising like the interests, demographics, etc. of the target

audience has to be selected very carefully. Another important type of marketing that

works on Pinterest is influencer marketing. By finding the right type of influencers and

following the right strategy, brands can make more profit than other types of online

marketing. As in the case of GonChas, influencer marketing was able to bring in a

good amount of profit and brand awareness. Brand awareness can be measured by

a number of KPI‟s. The monthly engaged users are the users that have clicked, liked,

shared, commented, or followed the Pinterest account of GonChas. Before the

launch of the Influencer marketing campaigns, the number of people getting engaged

per month was around 14,400, but after launching the influencer marketing

campaigns, the monthly engagement rose to 30,021. Also, the monthly impressions

for GonChas on Pinterest increased from 300,000 to 938,000.

85

One of the most important results achieved through this study was the

optimization of influencer marketing. GonChas has been doing influencer marketing

since the starting days but those campaigns were not optimized. All the research

done during the course of this study, has helped in optimizing the marketing

campaigns. During the planning phase of these campaigns a research was done to

find the most suitable influencer for the type of products to be promoted. Proper

goals were set, and the metrics were analyzed every day to check the performance

of the campaign. The type of products used, and the timing of post share were also

noted. This optimization proved to be very helpful and the results achieved by these

optimized campaigns have improved the overall performance of GonChas, in terms

of number of sales, user engagement and brand awareness. The influencer

marketing campaigns has also helped GonChas in increasing the number of

followers on Pinterest that went from 11,300 to 12,086.

Although this paper provides satisfactory results to give interested people

guidance to successful Pinterest advertising and influencer marketing, but it has its

limitations. To start with, Pinterest is a new form of social media, and there has not

been much research work done on it. So, some of the data has been used from

online sources. Secondly, while identifying the characteristics of influencer marketing,

the focus has been on influencers working in the niche of fashion and lifestyle, which

naturally does not show the whole scope of influencer marketing on Pinterest.

Another limitation while running Pinterest ads was the limited budget and time

allocated for Promoted Pins. A more extensive and thorough campaign could have

been launched with a bigger budget, and more refined results could have been

achieved. Nevertheless, one week's campaign gave valuable information about

Pinterest ads, and the knowledge acquired can be used in planning future

campaigns. Also, Pinterest is rapidly changing from month to month, new features

are being added or modified, so readers in the future have to be cautious and need

to check whether the presented information is up to date or not. The information,

tactics, strategies, and frameworks discussed in this thesis regarding social media

marketing can serve as a good example, but the results are not guaranteed.

Further research in the future can include methods on how to integrate

influencer marketing with Pinterest ads. If Pinterest devices a method whereby

integrating the influencers and Pinterest ads, it can bring more value to Pinterest, the

advertisers and will encourage the influencers to make more quality content. Also,

86

integrating Pinterest ads with other advertising channels such as email, search, etc.

can be a part of future research.

Although limited by amount of resources and time, this work tried to grasp the

topic of Pinterest advertising and Pinterest Influencer marketing comprehensively.

The research contributed to furthering knowledge about Pinterest, as it is a fairly new

and does not have much research work done on it. This study also gathered valuable

knowledge on how to plan, launch and evaluate marketing campaigns on Pinterest.

87

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LIST OF FIGURES AND TABLES

Figure 1: Web 2.0, Social media and Creative consumers ....................................... 13

Figure 2: Number of social media users from 2010 to 2021 ...................................... 17

Figure 3: Number of mobile phone users worldwide from 2015 to 2020 (in billions) . 18

Figure 4: Average monthly engaged Average monthly users .................................... 22

Figure 5: Location and Devices used by GonChas‟s audience ................................. 23

Figure 6: Age and Gender of GonChas‟s audience ................................................... 24

Figure 7: Categories and Interests of GonChas‟s audience ...................................... 24

Figure 8: The Marketing Iceberg ............................................................................... 25

Figure 9: Marketing process ...................................................................................... 27

Figure 10: US consumer media consumption share ................................................. 30

Figure 11: Media consumption for US consumer ...................................................... 31

Figure 12: E-Business versus e-commerce .............................................................. 41

Figure 13: Traditional order fulfilment versus Drop shipping ..................................... 45

Figure 14: Sales of GonChas last year (01.05.2018 up until 31.01.2019) ................. 48

Figure 15: Total audience for the month of April 2019 .............................................. 50

Figure 16: Top location of the audience of GonChas ................................................ 51

Figure 17: Interest overview of the audience of GonChas ........................................ 52

Figure 18: Categories and interest of GonChas‟s audience ...................................... 52

Figure 19: Working of the website ............................................................................. 54

Figure 20: How to copy an image address ................................................................ 55

Figure 21: How to search an image on google.com .................................................. 56

Figure 22: Image search results on google ............................................................... 57

Figure 23: Home screen of AliExpress mobile App ................................................... 58

Figure 24: Image search results on AliExpress mobile App ...................................... 59

Figure 25: Google analytics homepage showing common metrics ........................... 64

102

Figure 26: Pinterest ad manager and metrics overview ............................................ 66

Figure 27: The sign up page for Pinterest business account .................................... 67

Figure 28: The account settings page of Pinterest business account ....................... 68

Figure 29: Pinterest ad account page ....................................................................... 69

Figure 30: Setting up billing information screen ........................................................ 69

Figure 31: Pinterest Tag installation screen .............................................................. 70

Figure 32: Setting up ad campaign step number 1 ................................................... 72

Figure 33: Setting up ad campaign step number 2 ................................................... 73

Figure 34: Promoted Pin example ............................................................................. 76

Figure 35: Promoted carousel ad .............................................................................. 77

Figure 36: Promoted Pin ........................................................................................... 79

Figure 37: Traffic Campaign Results ......................................................................... 79

Figure 38: Sales overview for the traffic campaign ................................................... 80

Figure 39: Traffic received during first three months of 2019 .................................... 82

Figure 40: Sales on GonChas during the first three months of 2019 ........................ 82

Table 1: Media consumption for US consumer ......................................................... 36

Table 2: Major GonChas competitors ....................................................................... 49

103

LIST OF ABBREVIATIONS

SNSS - Social networking service

RSS - Rich Site Summary

AJAX - Asynchronous JavaScript and XML

UGC – User Generated Content

VK - Vkontakte

DIY - Do it yourself

PPC - Pay Per Click

SEO - Search Engine Optimization

ROI - Return on investment

HTML - Hypertext Markup Language

EDI - Electronic Data Interchange

B2B - Business to Business

B2C - Business to Consumer

C2C - Consumer to Consumer

KPI - Key performance indicators

SMART - Specific, Measurable, Attainable, Relevant and Time-bound

CTR - Click through Rate

CPC - Cost per Click

URL - Uniform Resource Locator

CPM – Cost per Mile