Masaryk University

Faculty of Economics and Administration

Field of study: Business Management (Eng.)

Social Media Marketing

Master’s Thesis

Supervisor: Author:

Ing. Dušan Mladenović 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. Dušan Mladenović
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. Dušan Mladenović 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,
Aut hor’s si gn at ure
Acknowledgement
I hereby would like to offer sincere thanks to my supervisor , Ing. Dušan Mladenović,
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
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

9
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

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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.

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 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.

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 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

18
“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

19
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

20
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

21
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

22
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.

23
 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)

24
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:
25
“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

26
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

Construct
Understand Capture
and
the Design a value from
integrated
marketplace customer- Build customer to
marketing
and driven profitable create profits
program that
customers marketing relationship and
delivers
needs and strategy customer
supperior
wants quality
value

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

27
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

28
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

29
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

30
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
31
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

32
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

33
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 (Sánchez 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.

34
 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).

35
 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.

36
 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

37
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

38
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 (Juslén. 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 (Brügger, 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-
39
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.

40
 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).

41
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.

42
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
43
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).

44
 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

45
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).

46
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

47
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.

48
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 Since 2012

Accessories

Fulchic.com higher 210,000 Clothing and Since 2015

Accessories

Sammydress.com lower 200,000 Fashion, beauty and Since 2011

household items

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.

49
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.

50
 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.

51
 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

52
second persona is in the same age group that includes women that are interested in
DIY and crafts, home décor, 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.

53
4.8 Working of the website

Figure 19: Working of the website

Finding the Outsourcing Finding Putting item Bringing

right the reliable for sale on sales by
products products sellers GonChas marketing

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:

54
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.

55
 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:

80
  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.

81
 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)

82
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.

83
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.

84
 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,

85
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.

86
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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

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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

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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

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