Nowadays, numerous people spend a lot of time using the Internet. Therefore, many companies invest substantial capital onInternet advertising to increase their revenue. YouTube is a useful method to advertise company produce, because 3 billion people watch YouTube every day (Henry. 2011). There are different typesof customer, so many companies focus on YouTube for this market. However, some people think YouTube is not a useful method for advertising; because many people may ignore the 15 seconds mandatory video advertisements or may not concentrate on the video advertisements (Fisher. 2011). This research considered whether YouTube is a good advertising method to encourage people to buy new products, to help company to increases revenue.
Find out how YouTube increases company revenue
Find out whether YouTube changes people’s shopping habits
Find out if YouTube is a useful advertising tool for a company
Give advice to companies as to how YouTube may be used to increase company revenue Offer advice as to ways in which YouTube may influence changes in shopping habits
Method of Research
The project is based on secondary research and primary research. Secondary research information was used to gain information about YouTube and Internet advertising from academic books, journals, newspapers and websites. A survey was conducted in order to discover the attitude and opinions of the general public. A questionnaire was used as, according to McFedries (2008) questionnaires are considered to be the most effective and efficient way of conducting this type of primary research because it allows primary data and information from the interviewees directly. The respondents consisted of 20 international students attending LSI school in Portsmouth. It was conducted on the 20th May 2013.
Findings from secondary research
YouTube is one of the most successful websites in the world. Many people may watch and listen to this website. As a result, YouTube can be an effective advertising medium in marketing. Therefore, many companies spend a lot of money on YouTube to increase their revenue. It is possible that this form of advertising can change people’s shopping habit as, while they are looking at YouTube information, they are exposed to the advertising clips, which accompany the information. However, it may be the case that people have the choice to ignore the advertising and just focus on the information they want to watch. In this case, there is debate about whether the advertising is wasted. Nevertheless, there appears to sufficient evidence to demonstrate that the money spent on such advertising is profitable. Firstly, YouTube net revenue was $2.6 billion in 2012 an increase of 35% compared to the second quarter of 2011 (Larry. 2012).
From this result it can be seen that many companies spend a lot of money on YouTube advertising, because in this generation, time spent on computers is increasing and many people find some entertainment from YouTube. 3 billion people watch YouTube every day (Henry. 2011). Many companies can see that YouTube has different types of customer. So it is a potentially useful tool to promote their company. For example, VEVO is the only company that has legitimate music channels on YouTube and it has many subscribers. So, when people watch a music video, it will include advertising about that music or other products. When people are interested in that music or products they can get more information and buy them. Secondly, YouTube will make an analysis of every user, such as what they often view. Then YouTube will handle the data and will propose some similar video to users.
Also, YouTube will give the data to some companies which are related to that video to do some research inform them about user habits. Then, some companies will add advertising in that video let users know their company has some products that are suitable for them and change customer’s shopping habits (YouTube. 2013). Finally, many people do not believe YouTube advertising feasibility, because many people may just watch the 15 seconds then ignore it. So, many people question YouTube advertising. With the increasing availability of advances in technology, the advertising strategies have improved and may encourage more visitors to watch the adverts rather than to ignore them. According to a recent research carried out by Fisher (2011), only 30% of YouTube advertisements are skipped.
Findings from Primary Research
This research used a sample of 20 people, those are LSI students and teacher,20 questionnaires were returned and the interviewees answered all questions. According to the results from the first question which asked people which website they usually use to find out new music videos, it can be seen from appendix (b) that 80%chose YouTube to find out new music videos, also 15% used Google and just 5% used QQ Music, but nobody used Yahoo and Facebook to find out the new music video. The second question researched how much time do people spend on average on YouTube everyday, it is shown by appendix (c), that near 35% of interviewees spend 3 to 4 hours on YouTube everyday.Likewise, there were 25% of interviewees who spend 1 to 2 hours per day and the number of interviewees who spend less than 1 hour and over 4 hours was the same, and it was 20%.
The third question asked people about their habits from before the changes in 2012, how often did they watch a full advertisement on YouTube, it is shown in appendix (d), that 60% on average, they justsaw it between 2 to 4 times, the number of people who saw it between 5 to 7 times and once every ten times was the same, it was 20%. The fourth question researched the changes that happened after 2012, and how oftenpeople watched full adverting on YouTube, it is shown in appendix (e), that 35% of interviewees saw the advertisement that appeared between 5 to 7 times. 30% of interviewees saw it between 8 to 9 times, the number of respondents who just saw it between 2 to 4 times and people who watched it every time is the same – 15%. The fifth question, participant agreed that mandatory video advertisements are useful for them, is shown in appendix (f), the number of participants who think are sometimes very useful and rarely very useful is the same – 35%.Likewise, there were 25 % of participant think are usually very useful and it just had 5% of participant think are very useful.
The sixth question, people agreed that mandatory video advertisements can increase your interest and as a result buy advertised products, it can be seen from appendix (G), 40% of the interviewees agree YouTube mandatory increase their interest and encourage them to buy the advertised products, whereas only 5% strongly disagree this point. However, nobody strongly agree that mandatory video advertisements can increase them interest and as a result buy advertised products. The seventh question, people agreed that YouTube could change their shopping habits, it can be seen from appendix (H), the agree rating score of 4 is 35% and the disagree rating score of 2 is 20%, representing that more interviewees YouTube can change their shopping habits. Since the percentage of people strongly agree and strongly disagree are the same of 5%, a conclusion cannot be drawn.
The eighth question, have they ever bought a product advertised on YouTube after watching the video, is shown in appendix (I), that 60% of interviewees have bought a product advertised on YouTube after watching the video and the remaining 40% said they did not purchase the product. The last question is what factors will make them interested in the online video advertisements, is shown in appendix (J), that 40% of participants said they are already interested in the product, also 20% of participantssaid because the pop stars advertisethe product. Thenumbers of people who think are sound effects and they need the products is the same – 15%, there are just 10% of participantsare interested in the online video advertisements due to gift vouchers.
Discussion of Findings
The survey was designed to find out how YouTube increase company revenue, whether YouTube change people’s shopping habits and find out if YouTube is a useful advertising tool for a company. Firstly, the findings demonstrate that 3 billion people watch YouTube every day (Henry. 2011), the VEVO music company channel has the most subscribers and has different types of customers. So it is a potentially useful tool to promote their company. From the questionnaire, it can be seen from appendix (B)that clearly there are 80% interviewees usually use YouTube to find out about new music. Therefore, YouTube is a succeedmethod to advertise company produce. Secondly, appendix (D) and appendix (E)investigate whether YouTube advertising strategy improvements increase the number of viewers.
Appendix (D) represents pre advertising strategy improvements, when interviewees just usually (60%) see on average, between 2 to 4 times the advertisement appeared. On the other hand, it can be seen from appendix (E) that after advertising strategies improved,the same group of them will seethe full advertising, on average, between 2 to 4 times the advertisement appeared decline to 15%. Likewise, the same group of interviewees will see on average, between 5 to 7 and 8 to 9 times the advertisement appeared increase to 35% and 30%. Also it can seen from appendix (G) thatonly 5 % of interviewees strongly disagree that mandatory video advertisements can increase interest and as a result buy advertised products. This result of this questionnaire is similar to the secondary research, which supports that advertising strategies improved in 2012 encouraged more people to watch the full adverting on YouTube and also increased people’s interest to buy advertised products.
Thirdly, it can be seen from appendix (F) that nobody thinks the mandatory video advertisements are never useful. As shown from appendix (H), only 5% of interviewees strongly disagree the YouTube advertisement cannot change their shopping habit. Likewise, YouTube can increase company revenue, because it can be seen from appendix (I, where 60% of interviews had bought a product advertised on YouTube after watching the video. So YouTube it can influence people’s shopping habits.
Limitations of the Research
This is the project allocated and the lack of experience is the biggest problem to be faced. Moreover, there were just 20 respondents of the questionnaireand the survey covers only the students in LSI. In addition, due to the time constraint,findings from secondary research contain limited academic resources. Finding more information on books and asking more respondents may improve further research.
Conclusions & Recommendations
To sum up, it is clear that there is 80% of interviewees used YouTube to find out new music, so YouTube had many different types of customers and so it is good for advertising companies’ products. Moreover, the improved YouTube advertising strategies in 2012 had raised the number of intervieweeswho watch more the mandatory video advertisements and it can change people’s shopping habits. These findings demonstrate that YouTube canincrease people’sinterest and as a result encourage them to buy advertised products. According to the questionnaires, it is suggested that companies can employ Pop Star to advertise the product and put more sound effect to make people interested in the online video advertisements. Also YouTube may conduct more research to find out customer’sshopping habit and to show the most suitable advertising for increase in viewers.
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