Sunday, February 7, 2010

Do Social Networks make for better advertising?

I have read numerous articles mentioning how Social Networks make for really lousy places to advertise, and generate high quality traffic as compared to search. It makes sense to some extent: when you are searching for something, you are somewhat more likely to be ready to purchase something from the category, rather than when you are just looking at which of your friends did something stupid on Facebook.

So what advantages do social networks have, that they can use, over search? I feel that Social Networks are more tailored to brand advertising than direct response advertising. In what ways? I feel that Social networks can do this in the following manner:

1. Innovative advertisement format - Social networks have the ability to tailor the ad formats and ad copy, based on your unique profile. For example, I have seen advertisments on Facebook that say 'If you are a 29 year old male in Illinois, and looking for car insurance, click here.' Now the ad is not particularly targeted at 29 year old males, but just the fact that is mentions that makes me notice it more

2. The user mood - I believe there is hidden potential in social networks predicting a user's mood based on their last post, and tailor the type or content of the ad based on that. This could be done in several ways. For example, a commercial for beer when I am expressing anger, disgust, frustration might be powerful.

3. Responses to user posts about the Brand - For example, if I post 'Delta Sucks' (it doesn't, I quite like Delta Airlines actually), Delta could serve me an ad, or even better, American Airlines could serve me an ad. Would this ad lead to an instant purchase? Probably not.

4. User profile data - Ads could be targeted based on user profile data

So what plagues growth of more brand advertising on social networks? Perhaps the right metrics. A Bain study focused on this aspect, proposing metrics more relevant to brand advertisers, and creating more segmented offerings catering to requirements of direct response marketers and brand marketers respectively. Who is likely to take the lead on this? No doubt, Facebook. With an intense emphasis on monetization, I predict that we will see some significant new developments in the next year or so. I look forward to it.

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