Research Issue: Who are the people interacting online and how engaged are they in online activities? Research Objective: • To study the factors which influence the impact of social media on consumer behavior • To analyze the impact of demographic variables on purchase behavior using social media • To classify the social media users based on their social media activities Research Tools: Factor analysis and One way Anova Findings: To identify the different types of users, a segmentation of these users and a linear model to examine how different predictors related to social networking sites have a positive impact on the respondents perception of online advertisements. Practical Implications: This study suggests different approaches for online marketers and managers looking to invest in advertising on social networking sites and hence improve their ads’ performance regarding clicking the advert and generating positive reactions towards it.