Implications

6.1.1 Theoretical implications

This study makes several theoretical contributions to the existing research, hereafter described from a broad to a more specific perspective. First, this study confirmed an additional construct, namely, social advertising. Hajli (2015) described in his research three social commerce constructs: recommendations and referrals, ratings and reviews, and forums and communities. Social advertising proves to be an indispensable part of social commerce. Next to that, this study offers valuable insights due to its experimental research method, as surveys dominate the social commerce literature.

Second, the current research extends the application scope of the social learning theory in two ways. The SLT explains that learning can occur through the observation of the actions of others (Chen et al., 2017). First, as explained earlier, the results show that the social

68 advertisements (external interaction process) lead to cognitive or affective appraisal (internal psychological process), which then leads to the purchase intention (decision-making) of the consumer. Second, this study confirmed that consumers learn through the observation of others.

The results demonstrated that user-generated social advertisements have a positive effect on affective appraisal, which in its turn positively influences the purchase intention of the consumer. In this process, the consumer learns through the observation of posts and pictures that other users have created. As shown in the literature overview in table 1, the social learning theory is not often used to explain online consumer behavior within social commerce. This study provides evidence that learning through the actions of others is a fundamental component of social commerce, and more specifically, of social advertising.

Third, the research extends the current understanding of the consumer’s purchase decision-making process within the social advertising context by showing that social advertising significantly influences online consumer behavior. It shows that the consumer’s decision-making is based on their internal psychological process. Social advertising has no direct effect on purchase intention; this effect is always mediated by cognitive and affective appraisal. This effect can be translated into a broader sense, namely that nowadays, consumers are using other, new types of media to receive information. They rely more on user-generated content because they perceive it as more trustworthy. It also shows that traditional ways of purchasing are making way for new purchasing options, of which social commerce shows significant potential.

Fourth, the study expands the available knowledge about social advertising, specifically for Instagram. Most research regarding social commerce has used Facebook as a social media platform.

Fifth, this research explains how the type of advertised product influences the internal psychological process of the consumer. A utilitarian advertised product within a user-generated

69 social advertisement leads to a higher affective appraisal than a hedonic advertised product.

This finding leads to interesting areas for future research, which will be discussed later.

6.1.2 Practical implications

This research also provides several practical implications. First of all, the most important implication for managers is to start allocating part of their budget towards social advertising because this study proved it is worthwhile. The research showed that social advertising is a crucial part of social commerce and that without social advertising, it is hard to expand the social commerce activities of a company. Social advertising shows managers where to allocate what part of their budget to in order to achieve the wanted results on their investments.

Next, within these social advertisements, it is important to enhance affective and cognitive appraisal, as this leads to an increased purchase intention. Since there is no direct effect of brand-generated and user-generated social advertising on purchase intention, the social advertisement must enhance either cognitive or affective appraisal. Without this enhancement, the social advertisement will not increase the purchase intention. In the first study, cognitive appraisal led to a higher purchase intention than affective appraisal; this held across the second experiment as well, but with a smaller effect. In conclusion, both types of social advertising can be used to improve the purchase intention of the consumer, although the effect is a bit stronger for cognitive appraisal.

Third, as supported by both studies, user-generated advertising leads to a higher affective appraisal. Contrarily, brand-generated social advertising leads to a higher cognitive appraisal.

However, only the first study supported this. The results show that companies can adjust what they want to communicate through their advertisement. For instance, they can describe the practical value of the product in the brand-generated social advertisement and enhance the feelings of the consumer in the user-generated social advertisement. Since both types of social

70 advertising fulfill different tasks, it is desirable to implement a mixture of user-generated as well as brand-generated social advertising.

Fourth, a deeper dive into the literature showed that it is not always necessary to use brand-generated social advertising to enhance cognitive appraisal but that user-brand-generated social advertising can also fulfill this task (Salma Irelli & Chaerudin, 2020). Thus, it is advised that companies start to incorporate user-generated social advertising within their marketing strategy, just as demonstrated by the lucrative example about Monsoon (Figure 2) discussed in chapter 2. By incorporating user-generated photos in their email campaign, their click-through rate increased by 14% (Greenbaum, 2020).

Fifth, as supported by the data, the type of advertised product does not influence the effect of social advertising on cognitive appraisal. User-generated social advertising with a hedonic or utilitarian product led to a higher affective appraisal, but this effect appeared even stronger for a utilitarian product. Consequently, the type of advertised product only matters for companies who want to increase their cognitive appraisal through user-generated social advertising.

Lastly, next to the positive effects of user-generated advertising, there is also a negative effect. Nowadays, it is becoming harder for consumers to identify this covert form of advertising (Mayrhofer et al., 2020). Policymakers can help consumers in identifying commercial content by letting brands include ad disclosures for user-generated content, such as including a hashtag or caption that marks the content as commercial content.