APPLICATION OF FACEBOOK MARKETING in Hanoi Creative City La Casa Chill Spa

VNU- UNIVERSITY OF ECONOMICS AND BUSINESS
FACULTY OF BUSINESS ADMINISTRATION

APPLICATION OF FACEBOOK MARKETING
in Hanoi Creative City & La Casa Chill & Spa
BY
QUAN NGUYEN NGOC

A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR
THE DEGREE OF BACHELOR OF BUSINESS ADMINISTRATION
(INTERNATIONAL STANDARD PROGRAM)

Hanoi – May, 2016


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VNU- UNIVERSITY OF ECONOMICS AND BUSINESS
FACULTY OF BUSINESS AND ADMINISTRATION

APPLICATION OF FACEBOOK MARKETING
in Hanoi Creative City & La Casa Chill & Spa
BY
QUAN NGUYEN NGOC

Supervisor’s name: Lien, Nguyen Thi Huong
Student’s name: Nguyen Ngoc Quan
Student ID: 10050329
Intake: QH2010-E
Program: International standard

Hanoi – May, 2016


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ACKNOWLEDGEMENTS

First and foremost, I wish to express my sincere thanks to my advisor Dr.
Nguyen Thi Huong Lien - Lecturer in Faculty of Accounting & Auditing, who
was thoughtfully guiding me in writing this thesis. Not only provide me
essential and precious sources of knowledge and materials, Dr. Lien also gave
me many inspirations to complete my Thesis in a proper way.

Secondly, I would like to express my sincere Thanks to Hanoi Creative City
& La Casa Chills & Spa – The two organizations which I decided to take as
the specific cases for better understanding of my theories on Facebook
Marketing. Specifically, I want to thanks to Ms. Nguyen Thuc Linh, Director
of Hanoi Creative City, and Ms. Duong Thuy Nghiem, Owner of La Casa; as
two of my guidance and supervisors, who have supported me fully with data
and many other information used in this Thesis, as well as created most
efficient environment for me when I work in their organizations.

Last but not least, I want to send my warmest thanks to all of other people
who have involved and help me complete this Thesis: other people from many
departments of Hanoi Creative City, La Casa; my lecturers in 6 years of
University, my friends that support me through this time, and of course, all
supporting staffs of Faculty of Business & Administrations, UEB – VNU.

Student
Nguyen Ngoc Quan

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TABLE OF CONTENTS
ACKNOWLEDGEMENTS ...................................................................................... i
TABLE OF TABLES .............................................................................................. iv
TABLE OF FIGURES ..............................................................................................v
ABSTRACT ............................................................................................................ vii
INTRODUCTION .....................................................................................................1
1. Background & Significance of the Thesis ...........................................................1
2. Aim of the research ..............................................................................................1
3. Objectives of the Research. .................................................................................2
4. Research questions ...............................................................................................2
5. Research Scope ....................................................................................................3
6. Tasks/Processes ...................................................................................................3
CHAPTER 1: LITERATURE REVIEW ................................................................5
1.1. Over View Facebook Marketing ......................................................................5
1.1.1. Concepts of Marketing and Marketing channels........................................5
1.1.2. Understand the Nature & Characteristics of Facebook Marketing ............6
1.2. Facebook Advertising – The Overview and Key terms ...................................8
1.2.1. History of Facebook, Facebook Marketing, Facebook Advertising ..........8
1.2.2. Major Key Terms of Facebook Marketing ...............................................12
1.3. Key Performance Indexes of a Facebook channel – Fanpage: ...................16
1.4. Research model and scales .............................................................................19
1.4.1. Research model ........................................................................................19
1.4.2. Hypotheses ...............................................................................................21
CHAPTER 2: RESEARCH CONTEXT AND METHODOLOGY ...................22
2.1. Research context .............................................................................................22
2.1.1. Hanoi Creative City – The First Creative Hub in Vietnam ......................22

2.1.2. La Casa Chill & Spa .................................................................................24
2.2. Methodology ...................................................................................................26
2.2.1. Time Series Model ...................................................................................26


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2.2.2. Sampling and collecting data ...................................................................27
2.2.3. Analyzing data plan ..................................................................................29
CHAPTER 3: RESEARCH ANALYSIS AND RESULTS .................................32
3.1. Raw Data Computation and Descriptions: .....................................................32
3.2. Regression Analysis........................................................................................33
3.2.1. PAGE LIKE – Y1 - Regression analysis .................................................33
3.2.2. REACH – Y2 - Regression analysis ........................................................34
3.2.3. INTERACTIONS LEVEL – Y3 - Regression analysis ...........................35
3.2.4. CPM – Y4 - Regression analysis ..............................................................37
3.3. Summary of the models and hypotheses tested result: ...................................38
CHAPTER 4: FINDINGS AND DISCUSSION ...................................................41
4.1. Assessment of perceived Facebook Marketing Improvement at Hanoi
Creative City & La Casa. .......................................................................................41
4.2. Impact of Organic Reach, Paid Reach, Amount Spent and the optimization of
Facebook Channel..................................................................................................43
4.3. Limitations of the Grand Model: ....................................................................44
KPIs Selections limitations: ...............................................................................44
Time Limitations: ...............................................................................................44
Cases Limitations: ..............................................................................................45
Entry-Barrier Limitations ...................................................................................45
4.4. Findings and Further research approaches: ....................................................45
4.5. Suggestions to improve Facebook Marketing performance of other
organizations based on the Grand Model (entry level): ........................................47



Attractive Source of Information: ...............................................................47



Understand that Advertising is a crucial activity on Facebook: ..................47



Build continuous relationship with the Fan via Fanpage: ...........................48

CONCLUSION ........................................................................................................50
REFENRENCES .....................................................................................................51
APPENDIX ..............................................................................................................53


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TABLE OF TABLES
Table 1.1. The Nature of 3 Internet/Social Network (Source: Trung Duc, 2014) ......7
Table 1.2. The KPIs of Facebook Marketing Level (Summarized by the Author,
2016)..........................................................................................................................19
Table 2.3. Encoded data for KPIs (summarized by author) .....................................29
Table 2.4. R-square α values and internal consistency (Seber, George & Lee, 2012).
...................................................................................................................................31
Table 3.5. KPIs calculations from raw data – Hanoi Creative City – by the Author.
...................................................................................................................................32
Table 3.6. KPIs calculations from raw data – La Casa Spa – by the Author. ..........32
Table 3.7. Summary Relationship Matrix of 2 Cases: HNCC & La Casa ................38

Table 3.8. Hypotheses tested results .........................................................................39
Table 4.9. Perception on Facebook Marketing Performance at Hanoi Creative City
after Grand Model applied........................................................................................41
Table 4.10. Perception on Facebook Marketing Performance at La Casa Chill &
Spa after Grand Model applied.................................................................................41


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TABLE OF FIGURES
Figure 1.1. The “News Feed” of Facebook as personal information sources of
users. On the right is another display area for advertising named “right panel”. ....7
Figure 1.2 A visual history of Facebook Advertising (Adriel Vasquez, 2014) * ........9
Figure 1.3. Facebook Ad Revenue Worldwide (Statista, 2016) ................................12
Figure 1.4. A user served as a viral channel of any information to their friends .....13
Figure 1.5. Fanpage with advanced administrative tools 2016 Creative City Fanpage, 2016, Captured by the author) ...........................................14
Figure 2.6. Organizational structure of Hanoi Creative City (Hanoi Creative City,
Internal Structure, 2015) ...........................................................................................24
Figure 2.7. La Casa Chill & Spa Structures. ............................................................25
Figure 2.8. Exporting Advertising Campaigns in Facebook .....................................28
Figure 2.9. Facebook Insight Section gave the admin a powerful tool to observe,
manage and understand the Facebook indexes clearly. ...........................................28
Figure 3.10. Linear Regression result for Page Like (Hanoi Creative City) ............33
Figure 3.11. Linear Regression result for Page Like (La Casa) ...............................33
Figure 3.12. Linear Regression result for Total Reach (Hanoi Creative City) ........34
Figure 3.13. Linear Regression result for Total Reach (La Casa) ...........................35
Figure 3.14. Linear Regression result for Interactions (Hanoi Creative City) ........36
Figure 3.15. Linear Regression result for Interactions (La Casa) ...........................36
Figure 3.16. Linear Regression result for CPM (Hanoi Creative City) ...................37

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Figure 3.17. Linear Regression result for CPM (La Casa) ......................................37
Figure 3.18. Research Model Result .........................................................................39
Figure 4.19. Amount Spent (Budget) Tendency of Hanoi Creative City & La Casa 43
Figure 4.20. Hanoi Creative City Fanpage, Plan Tools (By the Author) .................49


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ABSTRACT
Facebook Marketing should be considered as the youngest one in term of
marketing channels, but have created enormous influences and become one of the
most-used marketing channels nowadays. Because of the late appearance in
marketing world, how to understand and use Facebook channel in any marketing
campaigns is still a big challenge for any organizations.
This Thesis and the author ambiguously aim to illustrate Facebook Channel and
the mechanism of it through a “easy-to-understand” model which will serve as a
base entry to Facebook marketing, specially Facebook Fanpage for any
organizations to apply it in their Marketing campaigns. The model was built on
many Facebook concepts from various of models and researches of other Facebook
experts such as Steve Holzner, J Levy, Trung Đức… as well as the author’s own
experience of 3-years working in this field.
The thesis also brings 2 case studies of Hanoi Creative city & La Casa Chills &
Spa as the examination targets of the model for real data analysis and better
understanding of all Facebook concepts which introduced in the writings.
Data used in making analysis was primarily collected/exported directly from
Facebook data on the two organizations’ historical Facebook activities

Facebook themselves>. The thesis focus on how performance index improved after
apply the model on those 2 organizations’ Facebook campaign and answer the
question: is this model VALID and can be APPLIED as the basic solutions for other
organizations who are not acquainted/starting their Facebook marketing channel.
In addition, based on these findings, the thesis also gives some suggestions for
both Hanoi Creative City & La Casa Chill & Spa to further utilize their resources on
Facebook channel.


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INTRODUCTION
1. Background & Significance of the Thesis
First introduced in 2004 as an internal network for students in Harvard University,
after more than a decade, Facebook has grown in the most dramatically ways to
become the most popular and the strongest platform not only in term of social
networks, but also expand to the whole internet as well. May Google still be the
symbol of Internet and cover large internet users, but Facebook had become the largest
internet community in the past 5 years, with the number of accounts (users) break
through 1.3 billion people in 2015 (Facebook, 2015).
In recent year, due to the blooming numbers of users, Facebook have already
played a crucial role as a Marketing Channel that no organizations should skip when
creating a comprehensive marketing strategies. Facebook Advertising initially
integrated in Facebook systems in 2007 (Andre Vasquez, 2014) and continue being
improved through years. The Demand for Facebook Ad was the inevitable result of
Facebook’s influences: The Quarter 1/2013, Facebook announced their advert revenue
hit 1.8 $ Billion (Douglas Karr, 2014). Now, Facebook is a platform where people
keep contacting each other and do everything; but Facebook is not merely a platform
anymore; it has become an essential part of life. People keep interactions on Facebook,
and all Business need to reach to that great potential customers through this channel.

Basically, now, many business entities need to understand and catch up to the
trend of using Facebook as one of the most efficient channel to reach to their target
customers. Therefore, forming a “model” that can generally be applied in many
business entities’ marketing campaign on Facebook should be considered as a realistic
and high-applicable solutions.

2. Aim of the research
The Title “Application of Facebook Marketing” reflect the purpose of the research is
understanding the key concepts of Facebook marketing and express it as a theoretical


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application by proposing an “easy-to-understand” model of Facebook mechanism of
Information flow that can be widely applied to marketing field.

3. Objectives of the Research.
The research Objectives in this Thesis will be:
1. Help the new Facebook Marketing starters understand Facebook mechanism of
information flow (to make the marketing information available to target customers),
especially in Fanpage (official channel of an Organization to contact with customers)
by providing a “easy-to-understand” model that can measure its performance through a
set of KPIs.
2. Testify the applicability and validity of the suggested Model from 2 cases of 2
organizations mentioned: “Hanoi Creative City” & “La Casa Chill & Spa”. The author
will support the model by examine the performance of the Facebook channel by
observing the development of KPIs of those 2 cases.
3. By using the proposed model, other organizations can increase their Facebook
Marketing performance of their business.

4. Research questions

Assessment of a model require a set of Key Performance Indexes to be use as a
benchmark of performance level of Facebook channel. Hence the research questions
will be:
-

What is the KPIs of to assess the performance of Marketing on Facebook

-

If a Model of Facebook mechanism of information flow is suggested, could it be
valid? Tested on 2 Facebook Channels of Hanoi Creative City and La Casa Chill
& Spa with the benchmark of KPIs mentioned above.

-

What’s the theoretical solutions suggested by the Model to Organizations?


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5. Research Scope
This research is a result of nine-month Full-time position at Hanoi Creative City
and eight-month Free-lancer relationship at La Casa Chill & Spa. In this period, the
author observed and directly involved in using Facebook channel to attract the
customers to using their services. The Author also can access the revenue data, but in
this Thesis, the scale will only be limited to the data provided to generate KPIs. This
research will focus solely on the mechanism of displaying info on Facebook and how
to make your marketing information reach the customers. A Model will be provided to
make it applicable to apply to other organizations.
Facebook Marketing has several available channels: Groups, Events, personal
accounts …, but this thesis will only focus on Fanpage, as Fanpage is the most crucial

and basically the best tool for any organizations which is initially approaching
Facebook Marketing.
This research used quantitative method. Figure, data will be illustrated in the most
logical ways to claim the validity of the suggested theories. The places where the data
be collected, exported and used are Hanoi Creative City at No.1 Lương Yên Street,
Hanoi and La Casa Chill & Spa (Short refer as La Casa) at No.10 Khúc Hạo Street, Ba
Đình, Hanoi city.
Due to the limitations of time worked at each organization, the author will focus
on the period of July, 2015 until this research was conducted of April, 2016. The
period last for 9 months, an acceptable range for validity of research on Facebook
marketing.

6. Tasks/Processes
Outline of the thesis
Besides this introduction part, the thesis is divided into 4 main chapters:
 Chapter 1: Literature Review/ Conceptual Framework


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This chapter will provide theoretical frameworks for the research. It includes
fundamental concepts about Marketing, Marketing channel, Facebook, History of
Advertising on Facebook, many key concepts such as: organic reach, paid reach, like,
comment, share, etc. The research model and its hypotheses used in this research also
be expressed and play the main role through all thesis.
 Chapter 2: Research Context/Methodology
This chapter will describe the context where the research is conducted. In addition, it
will also provide detail research method from preparing for collecting data to
analyzing data.
 Chapter 3: Research results and analysis
This chapter will give description of data collected, and then show analysis results

with time series model methodology.
 Chapter 4: Research Result & Discussion
This chapter will answer three research questions by providing assessment about
Facebook KPIs to measure performance, and then the validity of the Model suggested
through two (2) real cases of La Casa and Hanoi Creative City. Besides, it will also
give some suggestions to further improve Facebook Marketing activities as well as
better understanding of two channels of Hanoi Creative City and La Casa

After four chapters, a conclusion will be given as the final answers to all 3 questions of
the Thesis. References and Appendix will follow after.


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CHAPTER 1: LITERATURE REVIEW
* This chapter will provide theoretical frameworks for the research. It includes
fundamental concepts about Marketing, Marketing channel, Facebook, History of
Advertising on Facebook, many key concepts such as: organic reach, paid reach, like,
comment, share, etc. The research model and its hypotheses used in this research also
be expressed and play the main role through all thesis.

1.1. Over View Facebook Marketing
1.1.1. Concepts of Marketing and Marketing channels
Marketing has several definitions and has always been one of the most
controversial topics of business fields. According to Investopedia.com (2016) – one of
the most famous and well-known website for business terms, Marketing is defined as:
“Marketing are activities of a company associated with buying and selling a product
or service. It includes advertising, selling and delivering products to people. People
who work in marketing departments of companies try to get the attention of target
audiences by using slogans, packaging design, celebrity endorsements and general
media exposure. The four 'Ps' of marketing are product, place, price and promotion.”

Also involved in 4Ps, the businessdictionary.com (2016) argued that marketing is “the
management process through which goods and services move from concept to the
customer. It includes the coordination of four elements called the 4 P's of marketing”.
But simplifier, in the course “Marketing” the author took in the 3rd year of UEB,
Marketing is “the management of profitable customer relationships” – Textbook
(Armstrong & Kotler, Marketing an introduction, 2011).
And with own limitations of experience and 3 years working in marketing field,
the author suggests to refer Marketing as “The set activities to deliver the
characteristics of an object (organizations, products, channels, shows, etc.) to the
“right” customers at the appropriate period of time through marketing mix.”.
Therefore, a Marketing Channel can be defined as “a channel which can help
to get the products/services be aware and then consumed by the end-users” (Kotler,


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2011). Those channel can be direct, indirect (include intermediaries), physical
(Physical store with addresses, deliver & distribution systems) or non-physical (online
store, intellectual goods, TV, Media channel).
Nowadays, we are living in an informational world. And Information, now,
become a crucial part of human civilizations. Information become products itself and
with the blooming of the Internet and the Social Network trends in the late 40 years,
Marketing channels had changed with the born of many new “niche” marketing
channels. The listed channels can be considered is Google (with their search engine,
still the no.1 media coverage website of history.), YouTube (largest video community
in the internet), Facebook (main target of this research) and many other channels such
as Websites, display ad, televisions, media, newspapers, Instagram, etc.
Requirement to understand the nature of those channels as well as ability to
apply Marketing knowledge to comprehensively create a strategic marketing mix plan
is now challenging organizations day by day. Companies need to catch up with new
trend, or fall after and breaks. Facebook, the world largest social network, is the

primarily channel should be considered with priority.
1.1.2. Understand the Nature & Characteristics of Facebook Marketing
As suggested from the part 1.1.1, Facebook marketing term can be defined as the set of
activities on Facebook to deliver the valuable information to right potential Facebook
users in appropriate period through a set of Facebook advertising and brand tools.
The Nature of Facebook is a social network with uncountable flows of information
from several sources. The Table 1.1 will show the nature role of Facebook as well as
Google and a third new social network focus on Images that is also blooming –
Instagram. (Trung Duc, 2014).
As It displayed, all networks only run their business on a single product: information.
Business entities need to pay a fee through that network systems (Google Ad, Google
Adword, Facebook Ad..) as an advertising activities to display their needed
information on customers’ profile (On Google, that’s the result page of the searchers,
on Facebook, that’s the new feed of users)


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Table 1.1. The Nature of 3 Internet/Social Network (Source: Trung Duc, 2014)
Basically, in our technology millennium, all is a conflict of displaying information on
user-crowded platforms.
First introduced in 2006 (Adriel Vasquez, 2014); Facebook now provide each user a
display place of information that billions of user access days and nights. That’s called
the “News Feed” and can be accessed through the “Home” button. Figure 1.1 will
show the image of New Feed and how it affects our marketing behavior on Facebook:

Figure 1.1. The “News Feed” of Facebook as personal information sources of users.
On the right is another display area for advertising named “right panel”.

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As discussed above, because the News Feed of users are the main source of
information they care and receive from, all business entities need to get their
marketing information “into” their New Feed of target customers, through Advertising
(Facebook Ad) and through viral marketing.
Later, Facebook provided the advertiser a new displaying that Figure 1.1 also
illustrated: a piece of information on the right side of main New Feed. That’s called
“Right Panel” and also is a target displaying area for advertising on Facebook.
The third platform of displaying information on Facebook is the Mobile version, it’s
the same with computer, but Facebook designed it separately and named it “Mobile
Feed”.
In the close of this first sub-chapter, the nature of Facebook marketing should be
understood as: a continuous auction of displaying information on displaying area of
customers.
The next sub-chapter will provide the overview of Facebook Advertising and explain
major key concepts that will be required to fully approach this research.

1.2. Facebook Advertising – The Overview and Key terms
1.2.1. History of Facebook, Facebook Marketing, Facebook Advertising
Mark Zuckerberg has one of the most famous and influencing young businessman in
recent years. He is the founder and the biggest shareholders of Facebook (2016).
Millions of articles, news, shows… were used to illustrate the event Mark founded
Facebook, and many approaches to understand the history of development of
Facebook from an internal student network turned into the world largest virtual
society. But in the word of Douglas Karr (2014) & Vasquez (2014), as shown in
Figure 1.2, on their articles of history of Facebook, merged with data provided by
Wikipedia, the author suggested a “marketing-related” event Timeline of Facebook
below:

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Figure 1.2 A visual history of Facebook Advertising (Adriel Vasquez, 2014) *1
In 2004, theFacebook.com was coded initially as an internal social website for the
Harvard University students to communicate with other online via the platform. Three
founders, include Mark Zuckerberg, got in to a conflict in opinions. Mark dropped out,
founder the company after received an investment from a start-up fund in late
Summer, 2004. Immediately after 1 year in 2005, Facebook was founded. On October
1, Facebook expanded to twenty-one universities in the United Kingdom and others
around the world. At that time, high school networks required an invitation to join.
After only 1 month, all universities in Australia and New Zealand were added to the
Facebook network, bringing its size to 2,000+ colleges and 25,000 + high schools
throughout the United States, Canada, Mexico, the United Kingdom, Australia, New
Zealand, and Ireland. “Like” & “Comment”: 2 first of 3 Facebook Interactions was
added from the very beginning. It makes Facebook a social network, and differentiate
it from many other network and community. First Facebook type of Ad appeared as
“sponsored stories” – some of Facebook Partners can get their stories/brand
“sponsored” after investing/cooperating with Facebook
In 2006, Facebook was then opened on September 26, 2006 to everyone aged 13 and
older with a valid e-mail address. (Global Open). Facebook introduced the New Feed
1

High-resolution version of the Figure provided under Appendix Section


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(Home) of Facebook, was launched in November 2006. Facebook successfully unite
all contents on Facebook into a “one streaming timeline”. Now the new feed served as
the sources/display of all information related to a user. “Share” – the last interactions
beside Like & Comment, appeared due to the contents centerpiece of Facebook was

produced (The New Feed). This milestone feature become a powerful way of sharing
stories across personal network. Content Marketing starts it engine.
The following year 2007 saw Facebook Ad (the word “ad” will be referred as
Facebook Advertisement in this Thesis) first introduced with its own mechanism. A
milestone was created, mark a new level of Facebook Marketing. But at this time,
Facebook still only provide it as a limited feature for giant brand. Home-business still
can only do as a normal account. Then, Facebook go Mobile, with the appearance of
Mobile Feed and Right Panel, Facebook Advertisement now got its’ complete form of
displaying areas. In 2008, Facebook Page, later known as “Fanpage” (in this thesis,
the author will also use the word “Fanpage” for precision of Facebook term) was
introduced. Brands and other entities (not only business ones, but also “everything”
like celebs, books, films, etc... can be branded and make a Page). Fanpage change the
whole mechanism of Facebook Marketing, as now Page served as the representative of
any brands/entities. The next 2009, Advanced Targeting Features added to Facebook
systems. Facebook understand the need to clarify and control users’ New Feed by
themselves, and the need to segment the information into better-specific source. They
start with 2 most basic targeting: Language, and Geography (refer in 1.2.2 for more
details)
In 2010, Facebook published Mobile Apps on iOS & Android – an amazing
independent app run own Facebook own platform. Facebook App keep maintaining at
the top 1 position on any app chart for a long time. And next year 2011, Facebook
update their Advertising mechanism. Now all Advert created by Page will be marked
as “Sponsored” to differentiate it from non-advertising content. This feature has been
kept until the time this thesis is conducted. It’s a huge impact on Facebook Marketing
because now user can justify if a content was intentionally created to do business or
not.


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Year 2012 marked a great development of Facebook: Facebook users hit 1 billion!

And Mark conducted the “IPO” of Facebook globally, bring Facebook to a whole new
level of Business. Facebook further classified their advert capacity content by
introduced the system “Organic Reach” & “Paid Reach” for sponsored
stories/content. Facebook keep continuing developing Advertising systems by
customize deeper their advertising mechanism by provided more custom audiences
and more ad types with deeper advanced targeting features. At the end of 2012,
Facebook become a new enterprise in advertising market. In 2013, As New Feed
become prime new estate for ads, and user were flooded in advertise contents back
then, Facebook started reducing its number and ad units to make “a better experience
for normal users, and brands as well” as Mark Zuckerberg declared. This phenomenon
was expertise called “Streamlining” (Wikipedia, 2016). First effort of Facebook is to
reduce “Organic Reach” in advertising systems means normal content without ad will
be limited to display in end-users New Feed. That helped a lot so normal users should
avoid unwanted advertising content they don’t really care about.
The famous rule of Advertising by image “20% Text rule” also was applied in 2013
From 2014, the “Streamlining” progress continues aggressively. Fanpage could not
reach their fan in “organic” way anymore: The organic reach rate was reduced
approximately zero, and now content can only be delivered through 2 main methods:
Advertise (“Paid Reach”) or by community sharing itself (via user sharing &
Interactions). The year 2015 saw Facebook continuously improved advertising
features, make it easier and more accessible even for beginners. It leaded to a
blooming year of advertising on Facebook. Facebook Ad revenue in 2015 hit 17,079
billion dollars, increase dramatically 22,3 times from the first year Facebook
introduced Advertising in 2009. (Figure 1.3, next page)
In the last quarter of 2015, Facebook prioritize Video on Facebook, added “auto
play” feature to video systems, and make Video Organic Reach higher than any level
of content. Now the marketer used Facebook channel need to adapt to Video trend, or
got crowded out by new generations of video content.

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And newest update in 2016, at the moment this thesis was conducted, Facebook
already announced new change in their image text rule and 3 new changes in their
advertising feature. But in the context of this Thesis, the author will only mention this
new feature in minor impact to the whole context of understanding and building the
grand model.

Figure 1.3. Facebook Ad Revenue Worldwide (Statista, 2016)

1.2.2. Major Key Terms of Facebook Marketing
Understanding the major key terms of Facebook Marketing is required to thoroughly
understand the Model suggested in this Thesis. This sub-chapter will introduce those
concepts and explain why those terms affects the next sub-chapters of building KPIs to
estimate Facebook Marketing performance.
Source of Information: a post, a status, a video, a photo… anything happened on
Facebook will created a “source of information” that user can interact with. Because
the nature of Facebook is a continuous auction to displaying information, Marketing
on Facebook mean the way to manage brands own “sources of information”, interact


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with fan/users information and using Advertisement to deliver marketing messages by
displaying it better, more strategic than other “source of information”.
In the context of the Thesis, this term will be shortly referred as “SoI”.
Personal Accounts / Users: Same as other Social Network, Facebook provide each
person a Facebook Account we call a user. This exactly what we use every day on
Facebook: a personal virtual self to express our opinions, tell stories and share
information on Facebook.
The User is very important in Facebook Marketing. Why? Because they are the most
effective viral channel to their friends/network. Information from a “friend” is always

more trust-worthy than any source.

Figure 1.4. A user served as a viral channel of any information to their friends
As the newest effort of Facebook, Facebook required user to use real identities on
Facebook, to reduce the Fake user problems and provide a better context for everyone,
avoid fraud and other cybercriminals through Facebook. Basically, a user now


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represents a real people, and Facebook is trying to create better connections between
people.
Fanpage: Facebook first introduced Fanpage at the beginning of 2007. A Fanpage is
different from a normal Facebook user: It’s not a person, a Fanpage represent an
entity/brand/celebs. To make it easy to understand, Fanpage is the representative form
of a brand on Facebook. Brands varies from several types: A celeb Fanpage (like
Christian Ronald), a company (Apple, Sony, Samsung...), a song, a movie series ...
Facebook integrated into Fanpage many administrative tools to serve as advertising
platform, and make it better for admin to managing their Fanpage (Figure 1.5). Via
Fanpage, Brands can send messages, communicating with the people, gathering larger
fan (customers) community. That’s why Facebook named it Fan-Page, as “it’s really a
Page for Fan.”. (Mark Zuckerberg, 2007).

Figure 1.5. Fanpage with advanced administrative tools 2016 Creative City Fanpage, 2016, Captured by the author)
Displaying Areas: The term will refer to the three types of area Facebook allowed
advertisers to auction for displaying content on: 1. New Feed; 2. Right Panel, 3.
Mobile Feed.


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As explained in the last sub-sections 1.2.1; News Feed of users are the main source of
information they care and receive from, all business entities need to get their
marketing information “into” their New Feed of target customers, through Advertising
(Facebook Ad) and through viral marketing. The same pattern applied for Right Panel
& Mobile Feed as well as.
Advertising / Marketing: Through Fanpage, any business entities can deliver their
communication messages (marketing information) to their customer via many content:
video, post, link, etc. Facebook have provided advertising on its platform for a long
time.

But

recently,

Facebook

ad

mechanism

have

changed

thoroughly.

Advertising on Facebook can be understand as using Facebook Ad services to deliver
advertisement to end-users on their New Feed.
Marketing, in term, is way broader than Advertising. It involved strategic planning and
more knowledge of building brand in longer term. In this context of this Thesis, we

will focus more on Advertising but also provide a comprehensive perspective of
Marketing.
Reach: In Facebook advertisement, Reach is a very important index provide by
Facebook to assess the performance of a Fanpage.
Facebook “Reach” is a number of a source of information had already been displayed
in a user interface once. Whenever an information got into a displaying area, it counted
as 1 “Reach”. With the development of Facebook Advertising mechanism and policy,
Facebook have divided business reach into 2 type: Organic Reach (natural sharing
across user network) and Paid reach (Advertising actions to reach more user)
The higher this index, the better chance that information was delivered to more people.
But “Reach” stands alone is not sufficient to understand the basic performance of
Fanpage. The other key term, “interactions level” will be explained below.
Organic Reach: the organic reach is the reach when a source of information gets to a
user without paying any advertising fee for Facebook. The higher the organic reach,
the better relativity of information that users concern. Precisely, the information that
user feel interested and willing to share will have the high organic reach.


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Paid Reach: this index is the reach when admin pay Facebook “ad fee” so Facebook,
via its advertising mechanism, direct pushes that information into users displaying
areas. The higher the ad fee spent, the higher the paid reach. The more relativity of
information to the users, the higher the paid reach will be.
Interactions level: Facebook strongest mechanism to make it the biggest virtual
community now is their systems of human imitation: Facebook provided their user a
system of interactions with any source of information that we totally get used through
years: Like (Show that you like or care or sympathize with that information), Share
(user serve as a secondary source to spread any information), Comment (user can leave
a comment to show opinion about anything).
As exactly described, a source of information can get interactions from other users.

The more like, share, comment – interactions created, the higher level of interactions
that information get, and also mean higher relativity level of information to those gotin-touch users.
In conclusion of this sub-chapter, Key terms of Facebook Marketing was listed, and
served as core knowledgeable sources to form a system of assessment: the KPIs of
Page performance in the following sub-chapter 1.3.

1.3. Key Performance Indexes of a Facebook channel – Fanpage:
Following previous sub-chapters, the author desire to identify a set of Key
Performance Indexes (KPIs) that comprehensively reflect the performance level of
Fanpage (for business entities – Page is their Facebook official channel).
In the word of Fanpage Karma (2015)2 – a website grouped from many social media
experts, they have suggested in their previous articles and research book, there are
specific 5 criteria that a Fanpage need to be estimate when assess its performance:
a. The Growth Rate of the Fan Base: Measure by the increase of Fans of a
Fanpage. Figure 1.7 shows you the number of likes at the head of a Fanpage. In
2

References: Fanpage Karma – set of KPIs. Pg .. )