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The study aims to demonstrate the impact of social media users’ positive attitude towards the social networking sites (SNS) on the generation of a positive attitude towards social networking advertisements (SNA). A favourable attitude towards the SNA thus generated can positively influence brand attitude and purchase intention.

An online survey was conducted to collect relevant data using a structured questionnaire. Structural equation modelling was conducted using the statistical software AMOS 18.

Empirical analysis revealed the importance of brand advertisements on the social networks in inciting a positive attitude as well as a purchase intention for the brand in the SNS users’ minds.

The study has been conducted in the Indian context using Facebook as a model social networking site.

Social media being one of the most popular and user-friendly platforms for regular communications, marketers are suggested to allocate a sizeable share of the advertising budget for social media advertisements and customer engagement so as to help build a positive attitude towards the advertised brand in the SNS users’ minds.

To the best of the authors’ knowledge, the impact of users’ positive evaluation of SNS as an effective communication medium, on the generation of a positive attitude towards the SNA, has been dealt for the first time here.

The purpose this paper is to analyze the causal relationship between promotional mix (PROMOMIX) which includes advertising, sales promotion, personal selling, direct marketing and gross profit (GRPROFIT) in the cement industry in India, while also trying to study their long-term and short-term relationship so as to understand the impact of one variable on another.

Both the variables PROMOMIX and GRPROFIT were subjected to log transformations and then to stationarity testing and subsequently tested for the presence of cointegration after which the vector autoregressive (VAR) model was constructed to explain after how many time periods, the changes in one variable impact the other. The impulse response function (IRF) and forecast error variance decomposition (FEVD) were also studied to see the time path and proportion of variation in a variable, respectively, to shocks in the other.

The results reveal the absence of cointegration but presence of unidirectional Granger causality running from GRPROFIT to PROMOMIX and highlight that current marketing communications budget is influenced by one-and-a-half year back profits. The VAR results are also supported by the IRF and FEVD results which show the response of PROMOMIX variables over time to a change in GRPROFIT.

The results imply that cement firms in India follow a top-down approach to budget allocation and increase their promotional budget when profit falls.

This paper will help brand managers in the Indian Cement industry to be aware of the causal relation between marketing communication and profit when they take budget allocation decisions.