Advertising and Brand Building with Social Networks – Page 2

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Social-Networking Sites and Categories

Social-networking sites can be classified into four primary categories. General social-networking sites, like MySpace, have social networking among friends as the primary focus. There are also several social-network sites that are affiliated with major portals (like Yahoo! 360). Because of their portal affiliation, they are typically separated from general sites for classification purposes. Lastly, there are vertical social networks. Vertical social networks differentiate themselves by emphasizing some common hobby, interest, or characteristic that draws members to the site. These vertical networks do not attract the same traffic typical of general sites, but one might argue that the members are more involved because of the common interest that initially brought them to the site. Within this realm of vertical networks, sites exist for pet lovers (e.g., Catster), photography (e.g., Flickr), soccer fans (e.g., Joga), gays and lesbians (e.g., Glee), and more. Examples of each type of social-networking site are provided in Table 3.1.

Some social-networking sites are generating advertising revenue on a larger scale than others; eMarketer predicts that MySpace will capture a full 60% of the market for ad spending. Other major players for advertisers including smaller sites like sites like Facebook, Bebo, and Piczo, which expected to earn about 23% of ad spending on the social-networking realm. Portal-affiliated sites will garner about 11% of ad spending and vertical sites about 5%. It probably comes as no surprise that Myspace earns the lion’s share of ad spending, at more than $510 million for 2007 alone!

The landscape of social-networking sites changes daily as new entrants seek to enter a growing market. The number of sites with reasonably large name recognition is fairly small, but the Mashable lists entries for 350 social-networking sites! A few examples are highlighted below. A Place for Friends

Myspace is a general social-networking site with more than 100 million registered profiles and unique visitors exceeding 64 million per month. It is the mass market of social networking, akin to the Super Bowl for television advertising. In fact, the most recent Super Bowl broadcast partnered with MySpace to deliver additional advertising impressions for Super Bowl commercials by offering a MySpace community site dedicated to the ads. MySpace was initially intended for an audience of teens and young adults, but an analysis of MySpace user demographics from comScore corrects that perception. MySpace’s age demographic is distributed over a range of ages with its largest category being the 35-45 age group (making up 40% of MySpace’s user base). A strength of MySpace is its broad appeal, developing at least in part from its vast array of features, including individual profiles, music, video, instant messaging capabilities, blogs, groups and communities, and a host of others. Given that social-networking sites exist (at least from the user perspective) to create and maintain personal relationships, using the largest network increases the likelihood of an existing friend base. Niche networks, in contrast, must rely on invitations from users to build membership and expand network. MySpace is the most successful network in leveraging what is known as the network effect. The network effect explains that a network gains value as more people join the network.

MySpace recently announced one of the most advanced developments in social-network advertising. It now offers an advertising solution for businesses that claims to microtarget ads to members. Because the ads are highly targeted based on the data in user profiles, the ads should have more relevance to and meaning for the target audience, resulting in a higher rate of response. This system promises to improve online advertising, especially for local advertisers, but its accuracy depends upon the accuracy of the data in user profiles and the quality of the data-mining function used to extract the segments for targeting. In addition to targeted display ads, brands can create brand profiles and communities.


Facebook is the second largest social network. Though largely dwarfed by MySpace’s size and traffic, it boasts highly involved members, many of whom report spending hours each day on the site and constantly checking for new Facebook messages on their mobile phones. When Facebook launched in February of 2004, it focused on high school and college students, relying on existing tangible networks to build the virtual network base. It has been enormously successful with the college audience. According to the GenX27 Youth Research Initiative, a higher percentage of college students use and prefer Facebook over MySpace. According to Student Monitor’s Lifestyle & Media Study, Facebook is one of the top five “in” things to do on college campuses, second to iPods, named by 73% of students and tying with beer, which was named by 71% of students. Early estimates suggest that about 85% of all college students use Facebook, with 60% of them logging in daily, spending about a half hour per day on the site. Since that time, it has opened the site to non-students, expanded to several other countries, and earned more than 27 million members. An article featuring Facebook in Fast Company magazine reports that Facebook boasts 47,000 networks, 30 billion page views per month, and more photos than any other photo-sharing site, and is the sixth most trafficked Web site.

Facebook has offered advertisers more strategic value than perhaps any other social network. It has accomplished this with a mix of strategic vehicles, including targeted display ads and sponsored stories, known as Social Ads and Sponsored Stories, branded profiles known as Facebook Pages, a developer incentive program to encourage content development called Facebook Developers, and a social news feed of brand-related user behavior called Beacon.

Facebook Social Ads are targeted at specific users based on member profiles and behavior in the network. For instance, Facebook Social Ads can be delivered to users whose friends have recently engaged with the brand’s Facebook profile or visited the brand’s Web site. Even the location of delivery for social ads can be targeted with ads appearing next to news feeds of friends (a Facebook feature that allows friends to update others on their recent activities) who mention the brand. By delivering ad impressions that are related to news feeds, Facebook encourages discussion and word-of-mouth communication about a brand.

Facebook Pages are brand equivalents to user profiles. It is the location on the site where brands develop their brand personas. They can be enhanced with applications from the business itself and from developer widget applications.

The free developers feature enables programmers to create widgets, mash-ups, tools, and projects for Facebook users. These small applications are popular with consumers and are useful to brands that utilize them to maintain a presence on user profiles. For example, FaceBank is a widget that enables Facebook users to track expenses (and share information about expenses with friends). Another popular application is Lickuacious, which lets users rank friends according to the popularity of their wall posts. The Wall is Facebook’s comments feature.

Facebook Beacon offers brands a way to virally distribute information about user brand-related activity. News feeds notify friends of a user’s engagement with a brand’s profile and Web site along with specific product search history and purchases. The news feed stories act as a form of word-of-mouth promotion. Further, they are targeted in that the feeds are then seen by friends who are also likely to be interested in the brand. Beacon offers a potentially powerful way to utilize the influence tactic of social proof, the influence a group of others have over a consumer’s decision. This feature should provide more value for advertisers who will benefit from the additional exposure and the easy transference of opinion-leader information to others in the network. However, it has been criticized by privacy advocates and some brands publicly expressed a discomfort with the degree of user information it reveals.

The above is an excerpt from the book Advertising 2.0: Social Media Marketing in a Web 2.0 World
by Tracy L. Tuten
Published by Praeger; September 2008;$24.95US; 978-0-313-35296-6
Copyright © 2008 Tracy L. Tuten

Author Bio
Tracy L. Tuten Ph.D. is Associate Professor of Marketing at Longwood University. She has authored more than one hundred journal articles, book chapters, and conference presentations; her research interests include Web-based survey methods, branding and identify, and online advertising. She serves on the editorial review board for the journals Psychology & Marketing and Gender in Management and serves on the academic advisory board for the Commercial Closet.

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