Social Networking Sites: Evolution of Internet Ads

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The purpose of this work is to explore the history and increase in online advertising focusing on advertisements shown to consumers on social networking sites such as Facebook or MySpace. A benefit of the Internet with regards to advertising is the user’s ability to interact with advertisements in a way that can not be duplicated by traditional print advertisement Social networking sites provide advertisers a steady stream of individuals who revisit the sites sometimes several times a day. This research is focusing on the use of social networking sites to connect advertisers with consumers in an upbeat and highly interactive manner as they are exposed to highly targeted advertisements.

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Introduction

Advertising on the internet has expanded dramatically over the last ten years as the underlying technology of the internet has increased in functionality and capability. As companies spend more of their advertising budget on online advertising each year it is important to for them to understand which web sites to advertise their products on. This research will focus on exploring online advertising and which websites are most effective at reaching consumers. The research will be focusing especially on social networking sites such as Facebook and MySpace in order to answer the following question. Are advertisements on internet social networking sites more effective in engaging consumers and achieving sales then other forms of advertising?

While the internet was originally designed to assist researchers in communicating with their peers in the computer science field it has grown into a world wide phenomenon. The internet has become a staple of many consumers’ lives. Because of the increased amount of time that individuals spend on the internet has increased advertisers are willing to explore the new medium with their ads [AZMITIA, SYED and RADMACHER. 2008]. The number of ads that assail the consumer as they navigate the internet has increased to the point where many consumers have developed mental tools that allow them to ignore the ads.

With the evolution of internet, advertisers moved from depending on print and televised media to reach potential consumers. As the advertisers experimented with the new technology they have changed the style of online advertising from static banner ads to the dynamic functionality of Rich Advertising Media. This advertising format allows pages to dynamically add new advertising content without having to refresh the entire page [AZMITIA, SYED and RADMACHER, 2008].

This new method of advertising is both seen more by consumers which increases the effectiveness of the advertising campaign when done on social networking sites such as Facebook and MySpace. These sites have an increased the effectiveness for advertising due to the use of the Rich Advertising Media combined with the increase of time that users are willing to spend on these sites in order to explore the changing content and various games that are provided [AZMITIA, SYED and RADMACHER, 2008].

Advertisers on social networking sites such as Facebook and MySpace are experimenting with new advertising format that is designed to better address the diverse population of users [http://www.economist.com/business/displaystory.cfm?story_id=12684861&fsrc=rss]. Since the users of these sites do not go to them in order to shop or learn about new products it is important that the ads that are shown to these users are highly targerted to speficic populations. By doing this it is hoped that the users will be more inclined to view the entire ad content.

This writer believes that when ads are placed on social networking sites users are more likely to explore the advertisement then those ads placed on regular sites. Users of social networking sites visit the sites regularly to explore new content. Due to this consistent traffic advertisers can be assured of the ad being viewed by each user several times. This is why the researcher believes that the social networking sites are more effective then other websites that do not have the return traffic that is generated by the social networking sites.

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The paper is structured in such a way that the reader will be able to understand how the internet evolved so that the introduction of advertising to consumers through the internet was a successful proposition. The effectiveness of internet advertising is measured by how many users explore the advertised content when it is presented to them, the internet advertising budget and online presence of major corporations and the increase in number of consumers who purchase goods or services online rather then in the traditional store fronts [AZMITIA, SYED AND RADMACHER]. This research paper will explore advertisements on social networking sites and there impact on consumers. It is believed that the advertisements that are located on social networking sites such as Facebook and MySpace are more likely to be explored by internet users then advertisements located on sites that are not social networking.

Literature Review

While the Internet was not originally designed for commerce the advantages of online advertising and sales has quickly become a large portion of the economy. “The UK online advertising industry is valued at 1,334.3 m for the first half of 2007 which equals 14.7% of the UK advertising industry” [IAB/PwC October 2007]. As an indicator of how effective the online advertisement in the United Kingdoms in 2006 over 30 million pounds was spent by consumers purchasing goods online. “An average of 22 million individuals currently shop online spending an average of 647 pounds each in the last six months” [BMRB Aug 2007].

It is estimated that by 2011 over 32 million consumers in the UK will shop online with an estimated value of goods exceeding 50 billion pounds (Forrester, UK eCommerce Forecast 2006-2011, March 2007).

Online shopping is gaining popularity. Analysts predict that online shopping revenues will grow from $11 billion in 1999 to $41 billion in 2002 (national retailer federation 1999). The U.S. department of commerce (1999). Citing a study by Forrester research, suggest that online retail trade, which ranged from $7 billion to $15 billion in 1998, will reach anywhere from $40 billion to $80 billion by 2002. The growth of online shopping in recent year has given rise to interest among academic researcher in investigating the impact of online shopping on various aspects of consumer choice behavior [ZINKHAN, 2000].

Consumers are finding it easier to research and purchase their goods through the internet. This increase in consumer behavior has opened a new market to advertisers who see will be able to advertise on the internet increasing the sales of their products in a global environment. Companies who have the ability to advertise and sell their products on the internet see an increase in their sales as consumers are able to research and buy the product without having to travel to the store. This added connivance increases the likelihood that the consumer will buy the advertised product.

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As of 2003 advertising campaigns on the internet focused on the user of banner ads. Banner ads are long rectangular blocks of advertising space located at the top of internet web pages. For Internet advertisement success was measured by how often consumers clicked on a banner ad resulting in the consumer being navigated away from the current site to other location goods [GUILLEN, MAURO and SUAREZ, 2005]. As consumers became more used to banner ads they develop a conscious behavior pattern to ignore them. Therefore banner ads were developed that wee designed to catch the attention of the consumer.

According to Patrali [2003], the researchers have shown that the effects of banner ads on consumers are more effective at the beginning of their internet session resulting in the ads being clicked on by the user. Researchers believe that consumers have lower levels of uncertainty at the beginning of their internet session then at the end [PATRALI, 2003]. This lower threshold level makes it more likely that the consumer will click on the hyperlink and navigate away from the page that they are currently on [PATRALI, 2003]. Near the end of an internet session consumers have a higher uncertainty level making them less likely to want to navigate away from the page they are currently on [PATRALI, 2003].

An additional factor in consumers being affected by online advertisements is the length of time between visits to a website. “When a consumer has a greater length of time between visits to an internet site there is a greater probability that the user will have forgotten what ads are present on the site making them more likely to click on the ad” [PATRALI, 2003]. Consumers who have a short period of time between visiting the same sites are less likely to click on an ad since they have already viewed the ad and dismissed its importance to them [PATRALI, 2003].

It has also been shown that if in prior sessions the user experienced the advertisement but chose not to explore the link to receive additional information about the product when the consumer sees the ad again it increases the consumer’s curiosity about both the site and featured product [PATRALI, 2003]. Due to this marketers on a popular web site would see greater consumer traffic to their ad when compared to ads on less popular sites. “If there was a click in a prior session, the longer the time interval since the last click increases the chance that the user will click on the ad in the current session due to the user forgetting that they had viewed the ad during a previous session” [PATRALI, 2003]

After this study was concluded and companies begin to experience a lack of response from their banner ads and additional marketing tools were designed that worked with the capabilities of the internet and the end users [PATRALI, 2003]. The use of rich media and pop-up ads allowed companies to increase the effectiveness of their advertisements on social networking sites such as Facebook and MySpace [PATRALI, 2003].

In traditional advertising consumers are often poorly educated when confronted with all the available products that could be obtained through different companies and manufactures [ANDERSON, SIMPN and RENAULT, 2006]. The difference in quality, price and attributes of products that are bought infrequently. Before the wide spread introduction of the internet consumers were required to investigate the products they were interested in buying by visiting various stores that were known to have carried the product in question. This was due in part that before the consumers had access to the internet advertisers generally did not place the price of their goods in the printed advertisement thus creating part of the foot traffic in the brick and mortar stores [ANDERSON, SIMPN and RENAULT, 2006].

With the advent of the internet and internet advertising consumers were able to visit the electronic store fronts view the price of the article in question and compare that price to other stores selling the product without having to waste time driving to different stores [ANDERSON, SIMPN and RENAULT, 2006].

Traditional advertising focuses on several attributes of consumer products, the price, the attributes and other characteristics of the product. Advertisers using traditional media believe that the cost incurred during the search of a consumer good will compel the consumer to purchase that good as the end result. However as in any transaction between a consumer and organization the consumer may decide that the product is not useful to them if the expected benefit is less then the cost of searching for the product. “The visit decision is facilitated by the advertising messages that give the consumer prior information about the price and or product” [ANDERSON, SIMPN and RENAULT, 2006].

The printed or televised advertisement’s goal is to increase the amount of foot traffic in the store. Once the consumer has entered the store the odds that not only will they purchase the item that caught their interest and brought them to the store but other items known as impulse buys in the retail environment [LECKENBY and LI, 2000].

The ability that the internet provides buyers and sellers the ability to communicate with each other with almost instantaneous speed has become one of the most valued characteristic of the communication medium [LECKENBY and LI, 2000]. Due to the functionality of the internet there are various forms of interaction available to the buyer and seller including “human-machine”, “machine-machine”, and “human-message” [LECKENBY and LI, 2000].

The “Interactive Communication” refers to the “human-message” interaction in which the user relates to and on some web pages has the ability to modify the advertisement they are viewing which increases the level of interaction between the user and the internet content. The event when a user clicks on a traditional banner advertisement does not offer the user a high level of interaction however even the low level of interaction that is offered in these situations offers consumer some form of interaction and manipulation of the advertisement [LECKENBY and LI, 2000]. This level of interaction while low is more then can be obtained by the consumer who is watching a commercial on television or reading an ad printed in the local newspaper.

These tools can be used by any website that is willing to update the programming to track the usage by consumers. However the sites that are most effective at monitoring the effectiveness of internet advertising are the social networks. These networks require a unique identifier as the user logs into the system which allows the website to automatically track what they are viewing and where they go when they leave the site if they navigate away from the page through one of the many advertisements [CLEMONS, 2007]. The two main social networks are currently Facebook and MySpace both of which market advertising space at a higher premium then non social networking sites.

This is done due to the belief that their advertisements are effective at gaining the users attention and are able to keep their users through the interactive nature of the site. An advertising campaign lasting for three months usually costs advertisers 150,000 dollars. This money purchases space on the website in the form of pages that are devoted to the advertising content [VARA,]

Internet advertising

In 2008 large corporations spent large portions of their advertising budget on online advertisements. Below is a chart of large companies and the amount of money that was spent on online advertising in 2008 in comparison to the previous year. While these numbers have in the most part decreased from the previous year which could be related to the downturn of the economy. However the chart shows that companies believe that advertising online is a viable method of attracting new consumers to their products.

Parent Company Q1-Q3 2007 Q1-Q3 2008 Growth
Procter & Gamble Co. 2,526.0 2,342.3 -7%
General Motors Corp. 1,730.4 1,659.6 -4%
AT&T Inc. 1,351.1 1,317.6 -2%
Verizon Communications Inc. 1,018.8 1,125.6 10%
Toyota Motor Corp. 1,246.8 1,194.1 -4%
Ford Motor Co. 1,452.0 1,112.9 -23%
Johnson & Johnson 1,005.2 1,059.1 5%
Time Warner Inc. 983.9 878.2 -11%
General Electric Co. 680.3 807.9 19%
PepsiCo Inc. 749.5 730.5 -3%
Total Top 10 12,743.8 12,227.8 -4%
Source: Nielsen

This chart taken from http://www.itfacts.biz/internet-ad-spending-by-top-companies-for-q1-q3-2008/12328 shows that major corporations are investing large amounts of money advertising through various formats on the internet. According to the following website http://www.itfacts.biz/top-display-ad-sites-in-june-2008/11425 these websites received the majority of online advertising income in 2008 outlined in the below chart.

Publisher Site Ad impressions, mln. Share of Display Ads Visitors, 000
Total Internet 329,828 100.0 180,571
Fox Interactive Media 52,288 15.9 83,714
Yahoo! Sites 34,675 10.5 130,680
AOL LLC 19,004 5.8 96,512
Microsoft Sites 15,485 4.7 87,667
Google Sites 5,075 1.5 81,885
FACEBOOK.COM 3,650 1.1 30,723
eBay 3,512 1.1 52,238
Viacom Digital 3,114 0.9 36,382
COMCAST.NET 2,644 0.8 11,860
Glam Media 2,237 0.7 33,462<
Source: comScore

One of the things that these web sites have in common is that they receive the same users each week. This trend of returning users allows the websites to focus their customers advertising on these returning users in order to increase the level of response to the advertisements. A method currently being investigated by social networking sites is targeted advertising. In this method of advertising registered uses will be shown ad content that is specific to their preferences. As an example a 40 year old female living in Alexandria, Virginia would see ad content specific to the Washington DC metro area and working adults.

While the majority of the advertisements were on Fox Interactive Media, Facebook while in the sixth position shows that the potential of advertising on social networking sites has not yet been reached. If the targeted advertising system is able to provide their advertising customers with the ability to target their ads to specific groups of users then advertisements on social networking sites will continue to grow resulting in an increase in revenue for companies that advertise through those sites. While these statistics are from the first three quarters of 2008 they indicate the fruition of over ten years of growth in the field of internet advertising.

Awareness of internet advertising as a viable form of advertising was first thought of in October of 1994 when Roy Schwedelson delivered a speech at the Fall DMA conference in Toronto urging marketers to get involved with the new technology.

Online advertising first started on HotWired.com in 1994 when they placed the first banner ads on their web site [Zinkhan, 2000]. Since 1994 the methods of reaching consumers through the Internet have increased dramatically. The industry has been able to develop the technology so that there are more options for advertisers to use then only banner ads. They are able to use multiple pathways of communication in order to reach their target audience. “Some of these pathways include keyword-targeted search engine advertising, floating animated page takeovers, interactive on-page rich media ads, streaming audio and video, and consumer-fueled ‘viral marketing’” [Zinkhan, 2000].

These variations of advertising campaigns that are available to companies through the Internet are especially effective through social networking sites because of the diversity of pathways that reach individual consumers [Zinkhan, 2000].

Accountability Standards

In any advertising campaign executives require a way to measure the effectiveness of the campaign to justify the spending of their advertising dollar. During the beginning of online advertising there were few standards to measure its effectiveness. As the advertising campaigns became more involved and complex resulting in added advertising expenses for corporations the necessity for creating a measure of accountability which would then justify the expense of advertising online.

The internet is able to track how many users and how often those users view an online advertisement which is an advantage when compared to traditional advertising. Websites that gain the majority of their revenue from online advertising do not want to be labeled by the advertising industry due to the uniqueness of the capabilities of online advertising [Panzarasa, Opshl and Carley 2009]. As corporations increase their demand for more accountability large websites have been able to connivance more companies to advertise through them resulting in more mainstream advertising dollars to be spent on online advertising.

Consumers and Control

As consumers have grown savvier about the available options provided to them by the Internet they have in general become more focused on finding the products that are important to them. Innovations such as Napster, TiVo and pop-up blockers on their favorite websites consumers are able to control to a great extent what advertisement they pay attention to.

“No medium since black-and-white television has penetrated 50% of U.S. households as quickly as the Internet: both did so in eight years, counting from the 1993 birth of the Mosaic graphical web browser to 2001, when the U.S. Census found half of homes were wired. That compares to nine years for radio, 10 for the VCR, seventeen for personal computers, 39 for cable TV and 70 for the telephone” [ZINKHAN 2000].

What makes the Internet different from these other mediums is that the consumer can manipulate the media through the keyboard and mouse. The Internet is also more versatile then the previous forms of media. While a consumer can not directly interact with a television or a radio there possibilities of interaction with the internet are endless [AZMITIA, SYED AND RADMACHER 2008]. With the Internet a consumer has the ability to interact in multiple ways. They are not limited to the preferences set by company’s websites because many of them can be individually customized by the user with a few simple clicks of the mouse. Once the users preferences have been set through one device they can perform a multiple of functions including reading, watching TV or pod casts, listening to music, meeting new or old friends, post blogs or pictures and design, create new programs for the internet through various computer programming languages, and purchase over a network of millions of other users and destinations.

Interactive Advertising Bureau

As the number of companies interested in increasing the effectiveness of their online advertising campaigns a new organization was created in order to promote research and to share the best practices in online advertising. The Interactive Advertising Bureau (IAB) was founded in 1996 to assist in the growth of the new medium. The IAB has several main objectives which include the prevention of adverse legislation and regulation that would limit the functionality of the internet, the creation of measurement guidelines and creative standards for online advertisement, to share advertising practices that created a positive effect on advertising campaigns, and to generate and provide research on the industry leading to greater success in online advertising campaigns [IAB 2004].

One of its primary functions is to educate users about the value of online advertisements. In order to focus on the education of users the IAB funds research studies on interactive advertising, which allows advertisers and marketers to create advertisements that take advantage of the opportunities available by advertising through the internet while avoiding the common problems that occur when using an unfamiliar medium. A large problem with any advertising campaign but is especially relevant with regards to internet advertising is measuring the effectiveness of the campaign [IAB 2004]. In order to assist with creating a standardized measurement system for internet advertising campaigns the IAB in partnership with the American Association of Advertising Agencies (AAAA) created a consistent counting method to standardize the measurement of online advertising campaigns by monitoring user reactions when presented with internet advertising content.

There are three types of user reactions when faced with internet content or advertising. These three reactions are the click-through, visits and the unique visitor.

Variations of the click-through are the most common and easiest user interaction to measure [IAB 2004]. The variations of the click-through include the in-unit click through and the mouse over. These reactions by the user are generally referred to as clicks. A click through is the measurement of the user initiated action of clicking on an advertisement which then causes the user to be redirected to an external web site [IAB 2004].

These click-throughs are tracked by the ad server providing a concise measurement of the number of users that responded to the advertisement. Social networking sites are able to increase the click through rate for advertisements located on their sites due to the use of targeted marketing strategies. A targeted marketing strategy is able to take information from the user profile and use it to find ads that offer products that involve an item or activity that the user enjoys and is located in the same geographical area that the user is in. The social networking site then combines the user with the advertisements that are most suited with the user. When an advertisement is relevant to a user they are more likely to explore the content of the adadvertisement instead of ignoring it.

Visits are defined by at least one page or graphic download which qualifies as at least one page combined with at least 30 minutes without inactivity on the website [IAB 2004]. The webpage uses the unique registration or identifier that is obtained by users who have to log in to view the site or the use of a cookie or small piece of information that is stored on the user’s computer that identifies the browser [IAB 2004].

The amount of users that spend 30 or more minutes browsing a site would be more likely affected by the advertisements due to the longer exposure of the advertising content. The average user of a social networking site is known to spend at least 15 minutes at a time visiting the website several times a day. Because they keep returning to the site over the course of the day the number of visits is higher then for non-social networking sites. This return traffic increases the user’s value to companies that advertise on the social networking sites because they are exposed to the advertising content more frequently.

The unique visitors are users with one or more visits to a website. These can include users that have accessed the site through the websites main home page or are brought to the site through an ad in either an email or newsletter or by clicking on a pop-up ad [IAB 2004]. This method provides the most accurate method for counting the users who have viewed the content of the web site and which advertising method was most effective in promoting the web site [IAB 2004]. In order to enjoy the full benefits of social networking sites an individual must be both a registered user and logged into the website. Due to the nature of social networking sites they become more attractive to consumers to register for the site making it easier to track the true usage of the site.

An additional way of measuring the effectiveness of advertising on users is to measure the page impressions. Page Impressions are defined as being a measurement of response from a web server to a page request from the unit’s browser. Examples of page impressions include pop-ups, pop-unders, and surveys [IAB 2004]. While these are not as effective as using individual user login’s they provide an additional way to monitor what advertising generates an effect on users. The applications on social networking sites such as the various types of games and other forms of rich media require the individual’s computer to interact with the networks servers at an increased level which results in the generation of page requests [IAB 2004].

For social networking sites such as Facebook and MySpace the advertisement content involves large amounts of Rich Internet Applications. Rich Internet Applications include any type of webpage, application, or game that can dynamically load content or advertising without having to reload the entire page. In a webpage that has a large amount of user interaction such as social networking sites or travel sites there are two methods for measuring the effectiveness of the advertising content [IAB 2004]. The webpage’s are measuring the amount of use the mouse button receives and the amount of use the keyboard receives as the user browses the web site.

Social networking sites are able to charge a premium for the advertising content because they have the ability to reach large numbers of registered users who spend at the minimum of fifteen minutes per day on each site [Zinkhan, 2000]. These users are used to and expect the applications that use Rich Media Advertising is well established. As the user searches for new content provided by the social networking sites they run across new advertisement that specifically targets user’s profiles that are more likely to purchase the new product or service. These characteristics of the social networking sites increases their usefulness to advertisers who see a return on their advertising investment by using the social networking sites rather then other sites without the same traffic of returning users every day [LI And BUKPVAC 1999].

Social Networking Sites

Social networking sites have evolved over the life span of the Internet. The earliest examples included sites that offered limited interaction among the users and a smaller amount of users. In the early years of 2000 two social networking sites became to be more popular for users of all age groups and interests [Clemons, 2007]. These two sites were MySpace and Facebook. As these sites developed more options for interaction among the users and the providers were developed which increased the amount of time each user would spend on these sites.

As the social networking sites developed the interaction between the user and advertisers evolved from the presence of static banner ads to pop-up ads that involve rich media applications that provide a greater amount of interaction between the users. This level of interaction among the advertiser and the consumer creates an environment where the user is more likely to purchase the item being displayed [Clemons, 2007].

In order to understand the experience that users of the internet and especially social networking sites receive requires researchers to understand the state of flow on various websites [Novak, Thomas P., Hoffman, Donna L, Yung, Yiu-Fai, 2000]. Flow is defined as the state which occurs during network navigation which is

  1. characterized by a seamless sequence of responses facilitated by machine interactivity,
  2. intrinsically enjoyable,
  3. accompanied by a loss of self-consciousness, and
  4. self-reinforcing” [Novak, Thomas P., Hoffman, Donna L, Yung, Yiu-Fai, 2000].

Social networking sites are constructed in such a manner that these four categories in creating an online environment with the required flow have been achieved. A secondary consideration is the amount of interaction available between the user and the social networking site. “To experience flow while engaged in an online pursuit, consumers must perceive a balance between their skills and the challenges of the interaction, and both their skills and challenges must be above a critical threshold” [Novak, Thomas P., Hoffman, Donna L, Yung, Yiu-Fai, 2000]. The ability to experience new games and applications that are offered by the social networking sites combined with the ability to communicate with friends provide the critical balance between the skills of the user and the interaction provided by the website.

Advertising on MySpace

MySpace was designed to be an area of social expression among various individuals. The web site has grown in complexity and now includes chat room capabilities, movie theaters, and online music with both established and new artists due to these capabilities MySpace is a multifaceted social networking site allowing users to connect with new and old friends [Clemons, 2007]. The idea for MySpace grew out of one of the original social networking sites Friendster.com.

MySpace has over 100 million unique users which guarantees marketers a diverse audience due to their wide range of interests, hobbies and communities. Because of the wide range of users MySpace has developed sophisticated targeting tools that allow advertisers to reach their desired audience in the 15 – 24 age range [Clemons. 2007]. Advertisers can target specific characteristics singly or multiply. This means that advertisers can target any age, gender, marital status or culture preferences.

MySpace users have an increased ability to interact with their homepage on the social networking site. This increased level of interaction allows them to express their creativity and individualism. Users do not have to have the technical knowledge or receive input from third party sites to create a webpage that excites them [Li and Leckenby, 2004]. Users can choose their profile skin, add or remove profile modules which allows them to create a page lay out that meets there personal specifications [Clemons, 2007]. Due to this MySpace users remain engaged with the website and continue to participate in the social networking site. In order to capitalize on the audience MySpace has worked with advertisers and marketers to create advertising opportunities that appeal to the users and are profitable for the advertisers.

MySpace users have the ability to become friends with individuals, groups or corporations. This means that they can become friends of a particular product as easily as they become friends with an individual living in another country. This is one way in which corporations can directly market to MySpace users and many different corporations and music entities are using this approach as a marketing strategy.

MySpace has enhanced the advertising opportunities that are available of their social networking site. MySpace has joined with music giants such as Warner Music Group, Universal, Sony, BMG and EMI creating MySpace Music which advertises itself as the world’s richest music experience. With over 5 million artists or bands located world wide combined with over 120 million consumers [Clemons, 2007]. MySpace offers their user the ability to purchase mp3’s, ring tones, tickets to performances and merchandise. Advertises can purchase sponsorship of MyMusic homepage, user play lists or pop-out Music Players which allow consumers to listen to their tracks after leaving their MySpace page. This Pop-out Music Player allows marketers to advertise their brand directly on the consumer’s desktop computer after they leave MySpace.

Additionally they have created the world’s first user generated radio station that is complete with its own DG, weekly co-hosts and celebrity guests. The station showcases the latest emerging talent with the entire play list chosen from tracks that were submitted by some of the 1.25 million bands currently promoting their music through the web site [Clemons, 2007]. Users have the ability to be selected as the weekly co-host of the show through a video audition that other MySpace users select.

Advertisers can user the radio station for marketing purposes through various sponsorship opportunities. These opportunities include the integrating the advertiser into the station name and profile such as MySpace ‘Advertiser name” Radio or frequent on-air branding and referencing such as MySpace ‘Advertiser name’ Radio made possible by ‘Advertising’ [Clemons, 2007]. These advertising formats are known by the average consumer due to their similar nature of conventional radio broadcasting. However an advantage of traditional advertising on MySpace is that the sponsor is associated with MySpace Music which is one of the most visited websites for music as well as the ability to seamlessly integrate into the MySpace community.

MySpace has also created the Impact Channel which id dedicated to celebrating the growing ability of social network users to work together to make the world a better place. Social responsibility is one of the most important issue among social networking uses impacting both brand perception and purchasing decisions. The Impact Awards recognize the dedicated work by their users in such fields as poverty relief, environmentalism animal rights, international development and human rights [Clemons, 2007]. Marketers can advertise on the Impact Channel through their sponsorship of the Impact Awards. This level of sponsorship increase the reach of an engaged audience through the exclusive Impact Community/Award integration and the ability to choose a social cause or category that is best aliened to the sponsor’s objectives.

Advertising on Facebook

Advertising on Facebook is promoted by the creators of the web site as a different form of online or traditional advertising. The mixture of options was developed from technologies that have been very successful in offline advertisements [Coleman, 1998]. These advertising concepts include the ability to create a brand surrounding a social persona, the targeting of specific behavioral cues and monitoring the effect an advertising campaign has on social behavior [Clemons, 2007].

Facebook Ads have three components that include Pages, Insight and Beacons.

The first of these three components are the use of Pages – which allow a brand to create a digital persona that individuals can befriend, while this feature is offered on other popular social networking sites such as MySpace. Facebook is offering advertises the use of a social graph model that monitors user’s time on the website to offer them advertisements that match their profile of use.

The second component is known as Insight which provides a “profile-based targeting” system which allows brands to create and expand the number of individuals that are interested in their product through the functionality of the social network [Clemons, 2007]. This component allows advertisers to reach a targeted group of users that are already interested in learning more about the product or manufacture. This promotes an increase in brand recognition among these users.

The third component is known as Beacons which extends the behavioral targeting into a previously unexplored area of online advertising. This allows other web sites to mark their pages with a code that allows that is then used to allow visiting Facebook members to share their actions on the outside site with other friends on Facebook [Clemons, 2007]. Current brands that are using this technology include Blockbuster, eBay and The New York Times.

Successes of adverting campaigns are measured by the amounts of users that have befriended the brands page on Facebook. By increasing the amount of a brand’s friends on the popular social networking site increases the level of awareness of the brand among users. When the New York Times started a campaign on Facebook there goals was to increase the number of fans, raise the awareness of NYTimes.com as an interactive news center and to engage the community of users on Facebook in a conversation about the outcome of the presidential election.

The marketing campaign included the use of a front page ad on the front page of Facebook that is known as either a roadblock or an exclusive in the online advertising community. They provided users a brief video of Barack Obama with an invitation to submit comments about the video. The ad was seen by over 68 million individuals with the posting of over 30,000 comments shared among users [Clemons, 2007]. In conjunction with the ad was an application that allows users to share a free gift among friends. In conjunction with this advertising campaign users could share a free gift with their friends’ specific to the presidential election. The free gift was sent more then 400,000 times. The end result was that number of fans of the NYTimes.com quadrupled on its Facebook page.

In summation there are three main themes of successful online advertisement through the social networking sites. The emergence of a sellers market, the increase in accountability demanded by companies advertising on the internet as well as the shift of power from the corporations providing the ad content on the internet and how consumers are creating situations in which they have more control over the content when compared to other forms of advertising. All three of these components are found on the social networking sites such as MySpace and Facebook which could be a component of why these sites are as popular among internet users resulting in the increase of brand recognition and eventual purchase of the brands promoted through these sites.

Conclusion

The Internet allows the user to interact with the media and advertisements in a way that can not be duplicated by traditional print advertisement. This interaction between user and advertising creates the environment in which an advertiser can market products and services more successfully then compared to traditional advertising such as the print and televised media advertisement campaigns. The limitations in print and television media are no longer limitations that have to be overcome by the advertiser.

Through the various methods of tracking visitors to web sites and the ability to track the content that the users viewed is invaluable information to advertisers who can then promote additional products with another effective online advertising campaign. This research indicates that when a user is able to interact with a Rich Media Advertisement they are more receptive to the ad especially when compared to the interaction level of banner ads.

The value of the social networking sites to advertisers is a steady stream of individuals who revisit the sites sometimes several times a day spending a minimum of 10 to 15 minutes on the site during each use. This repeated traffic allows the advertising message to elicit a positive response from the consumer who then establishes a positive brand image in their minds resulting in the consumer purchasing products from those corporations whose brand is associated with the social networking sites. While social networking sites are not currently receiving the largest amount of ad impressions or share of display ads they are in a strategic position to become the largest advertising content on the internet in the future. While social networking sites are currently not the most effective form of online advertising they have the capability of becoming a more dominate force in the world of online advertising.

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