ADVERTISING IN SOCIAL NETWORKS

Dr. Igor Pustylnick, Swiss Management Center University ABSTRACT The advertising efforts in social networks grow every year. Since their appearance in the late 1990s Social Network Web Sites were considered as a uniform group. The only differentiation factors were the number of users and the amount of traffic passed through the site. This paper classifies the existing web sites into four major categories: (1) Pure Social Network, (2) Grouped Social Networks, (3) Content Social Networks and (4) Broadcast Social Networks. The paper shows the possibilities of advertising in each of these groups as well as the disadvantages of using the sites of the particular group for the advertising purposes. 1. INTRODUCTION The affordability and the wide spreading of the Internet became one of the main reasons for appearance of a large number of the Social Networking web sites. The ease of access to these web sites generated interest to the possibilities of the advertising in these web sites. (Chapell, 2011) discusses over 70 Social Networking web sites in terms of the potential of advertising in them. The study is very indicative of the way the majority of marketing researchers approach these web sites. The amount of traffic, demographic figures and the past potential, gauged by the frequency of brand advertising, are used to create the forecast for the future advertising success. The uniform approach to the advertising in social networking web sites (SNS) results in the use of standard techniques (Balwani, 2009) without any differentiation between the content and the background of SNS. While this approach may work for the small variety of very uniform web sites, such as Facebook1 it may not be as successful in the advertising in the specialized networks, such as LinkedIn2 or Ravelry3. With the increasing variety and volume of the Social Network Web Sites it becomes increasingly important to create a proper typology of these sites. It is also as important to align the potential and the modes of advertising with the types of the existing web sites. The rest of this article is structured in the following fashion: we present a review of the relevant literature on the subject followed by the definition of the types of the web sites and the recommendations on which type of the advertisement suits which type the best. The article finishes with the conclusions and recommendations for the marketing professionals, who choose to market their products online.

1 2

Facebook, http://www.facebook.com Linked In, http://www.linkedin.com 3 Ravelry, http://www.ravelry.com

Electronic copy available at: http://ssrn.com/abstract=1976893

2. HISTORY OF SOCIAL NETWORKS Sources, such as (Scott, 1988) give a definition of the social network as a group of people, joined together by virtue of kinship, trade, occupation or habits. This definition has been created long before the first SNS was established. (Morris, 1985) examines the social network based on the distribution network of Tupperware or so-called Tupperware Parties. (Arabie & Wind, 1994) find similar social networking tendencies in the groups of university and college students. The first significant attempts of the social networking on the Internet are so-called Internet Bulletin Boards. According to (Garton, Haythornthwaite, & Wellman, 1997) they can be considered the first internet social networks. (Wellman & Gulia, 1997) define any community of web surfers, who frequent the same web sites as a social network. They state that any virtual internet community acts in the same fashion as a social network. Virtual social networks, which started to appear at the end of the 20 th century lacked many features of todays social network web sites. (Boyd & Ellison, 2007) give a definition of the Social Network Site as as web-based services that allow individuals to (1) construct a public or semi-public profile within a bounded system, (2) articulate a list of other users with whom they share a connection, and (3) view and traverse their list of connections and those made by others within the system. In ten years passed from the realization of the similarities between the virtual communities and social networks to the creation of Social Network Site definition the internet technologies have advanced from facilitating Internet publishing. The new generation of the Internet tools, also known as Web 2.0 has become an engine behind the new Social Network Sites (Oreilly, 2007), which fully conform with the definition given earlier. The technical concepts of Web 2.0 have enabled the creation of the new set of technology, called Social Media (Kaplan & Haenlein, 2010), which allows sharing information, profiles and context in the real time thus allowing creation of true Social Network Sites. The first generation of the social networking websites was completely open to all members of the web community. The registration model accepted in this sites followed similar model used in the communication networks such as ICQ4, Skype5, etc. The users could and still can register a practically infinite number of profiles with different information about themselves. The verification of user profiles was very limited. The lack of control over the registration profiles was instrumental in creating the phenomenon of trolling (Kunegis, Lommatzsch, & Bauckhage, 2009) or an uncontrolled publishing of the of information harmful or offensive for a person or group. The inability to match the harmful message to a person has prompted the attrition of the users from the uncontrolled web sites.
4 5

ICQ, http://www.icq.com Skype Communications, http://www.skype.com

Electronic copy available at: http://ssrn.com/abstract=1976893

At the early days of the social networks the advertisement was created in two different ways. The owners of the social network website sold the advertising space on the web site pages. The value of the advertising was created by signing up an increasing number of users and by demonstrating the ability to generate traffic (access to the web site pages). Since the owners were not able to verify the authenticity of the profile information, the authenticity of any statistics on such web site was questionable (Marwik, 2011; Bonneau, Anderson, & Danezis, 2009). Moreover, the users of the social networks were not willing to provide the extended information about them due to the threat of identity theft (Bilge, Strufe, Balzarotti, & Kirda, 2009). Present day Social Network Sites inherit many features of the first sites. They still adhere to the definition of SNS provided earlier. At the same time, the owners of these sites learned from the previous mistakes. Social networks, such as Six Degrees6 require invitations from the existing members. The information, listed in the profiles of the users in LinkedIn and Facebook web sites is completely voluntary. The users are willing to provide this information in order to receive the messages and the advertisement content they are interested in (Provost, Dalessandro, Hook, Zhang, & Murray, 2009). (Boyd & Ellison, 2007) note that many of the present social network relationships are the extensions of the real -life relationships transposed into the web. 3. CATEGORIES OF SOCIAL NETWORKS Despite the abundance of the Social Network Websites they appear to be very similar to one another. The users choose these sites based on the spoken language, the community and provided content. Often the new sites mimic the features and the appearance of the more popular and established sites. The Russian Language site V Kontakte 7 has a very similar appearance to Facebook with the intent to attract Russian language speaking users of Facebook. Another notable category of SNS are the sites, which attempt to gather users based on their previous and/or present affiliations. The websites, such as Classmates.com provide a large community, where people can find past classmates from all levels of education. We can consider a very popular LinkedIn web site to belong to the same classification group because users of LinkedIn can find and connect to their past colleagues and classmates as long as they are members of the LinkedIn web site. The web sites based on the profession or hobby are still very popular destination for those, who want to find people sharing similar occupation or hobby. Craft network web sites, such as Ravelry are very popular destinations for those want to discuss their craft, exchange ideas and receive and advice from the seasoned professionals. (Potts, Cunningham, Hartley, & Ormerod, 2008) show that such sites are now more than just a gathering of people of the same occupation. These sites have become a marketplace for the professionals, who are willing to sell their

6 7

Six Degrees, http://www.sixdegrees.com , http://www.vkontakte.ru

products and their skills (in the form of the lessons and how-to sessions) to the members of such sites. Another group of sites, which is often discarded, are the sites, offering media content, such as YouTube8, Flickr9, etc. Even though they fashion very limited profile information, they are still considered a valid point of information exchange (Lange, 2007). Recently these sites started adding the capability of commenting the exposed material. The capability of exchange of opinions within these sites has placed them in the same category as Facebook, which also offers content publishing with a possibility to comment on this content. The last group of sites represents the sites, which allow broadcasting the information in the form of micro-blogging (Kwak, Lee, Park, & Moon, 2010). (Huberman, Romero, & Wu, 2008) show that despite its blogging nature, Twitter10 represents a hidden network of connections of friends and followers of a particular member. This allows the authors to classify Twitter and similar sites as social networks. Based on the provided list and descriptions of various social network web sites we can create the following classification of the SNS types: Pure Social Network Sites such as Facebook, VKontakte, etc., which facilitate the communication between the members of the site, connecting them into a network. Grouped Social Network Sites such as LinkedIn, Ravelry, etc., which connect users based on their preset or past affiliations to a company or a circle. These sites can aggregate people based on their hobbies, professions, crafts and hobbies. Content Social Networks such as Flickr, YouTube, etc. offer their users the possibility to expose the content in the form of photos and movie clips, providing also a possibility to comment on all aspects of the content. The recently added features of subscribing to the content published by a certain provider places these sites into the same categories with blogs and social network sites. Broadcast Social Networks such as Twitter or LiveJournal11 allow users of these networks to publish the content, which may be of interests to a number of subscribers and followers of this network. Twitter does not have immediate feedback on the published messages. In order to have two-way communication on this network the users must subscribe to each others content.

8 9

YouTube by Google, http://www.youtube.com Flickr, http://www.flickr.com 10 Twitter, http://www.twitter.com 11 Live Journal, http://www.livejournal.com

4. ADVERTISING IN SOCIAL NETWORKS Each of the described types of the social networks is geared for its own mode of context exchange. The mode and the content of advertising should reflect the purpose of the network, its demographics and the mode in which this content is delivered. 4.1. ADVERTISING IN PURE SOCIAL NETWORKS Pure Social Networks, such as Facebook attracted the most research in the recent years. According to (Chapell, 2011) the main demographics of Facebook are 18-45 year old males. Facebook offers extensive profile where users can provide information about their interests, hobbies, affiliations, etc. (Holzner, 2009) states that marketing on Facebook must start from creating a concise and trustworthy profile. Pure Social Networks attract advertisers because of their enormous size According to their own statistical data Facebook encompasses over 700 million users. However, this data must be taken with a serious amount of caution. Facebook does not require from its members to have only one profile hence the number of real users with the real buying power can be much less than the number of the users announced by the site owners. Despite a very pointed demographics, frequenting the site, the researchers tell tha t the majority of this demographics come from the countries, where English is not a primary spoken language, such as Turkey and India. The buying power in these countries is significantly less than in North America and Europe. One of the greater successes of the advertising in Facebook is the advertising of the 2011 Ford Explorer model (Figueroa, 2010). The executives of Ford claim that Facebook advertising was 200 times more effective than the Super Bowl advertising of the same year. Although, the success of the Ford Ads on Facebook cannot be denied, the following must be considered: Ford Explorer advertising campaign previously targeted the same demographics with the TV ads, creating the image of Ford Explorer as a car suitable for exact same demographics, which frequent Facebook Site. Without denying the success of few advertising campaigns targeting Facebook it has to be noted that all of them targeted the proper demographics both with their offers and with their content. 4.2. ADVERTISING IN GROUPED WEB SITES Grouped web sites are not targeted as heavily as the Pure Social Network sites. These sites have users, which are grouped by their professional and hobby affiliation. This fact underscores that the users of the Grouped Sites are more knowledgeable in the subject, which categorizes them. The advertising on the sites of this type must be significantly more prepared than the adverting in Pure Social Networks. Grouped Web Sites offer one significant advantage over marketing in the other types of social networks. The advertising of the products to much more knowledgeable and uniform consumer group yields much faster results. On the other hand, the same group of users is much more likely

to reject the products if they do not suit their needs of are considered to be of inferior quality. Smaller number of users in these sites makes them a weaker advertising target. Members of Grouped Web Sites exchange the information not only on the quality but also on the price of the product. Following the model, described in (Potts, Cunningham, Hartley, & Ormerod, 2008) they form a perfect market for the creative industry. As a result the market formed in these web sites creates an opportunity for arbitrage and perfect grey market conditions. The case, described in (Pustylnick, 2011) shows that Ravelry web site was one of many venues through which the grey marketing of Addi needles was conducted. 4.3. ADVERTISING IN CONTENT WEB SITES Many marketing professionals do not think about the Content Web Sites as advertising venues. They would use the advertising space provided by the owners of the site and limit all marketing efforts to using this feature. Despite being fairly static (content provided content shown) these web sites have several advantageous options, the use of which provide extra opportunities for marketing. Using Content Web Sites as a replacement of the traditional marketing efforts, such as communication of product price and features will not work as well as by using traditional means of advertising. However, it is possible to build and strengthen a brand by posting a number of videos featuring the brand name, how-to instructions and tips. The main video-content website YouTube is tightly coupled with Google search engine. This gives the owners of the brand, posting the videos on YouTube additional brand exposure. One of the notable examples of brand promotion on YouTube is an effort by Headwater Wool to promote the brand, called Russian Knitting 12. The creators of the set of videos placed various visual how-to instructions, which featured completely different knitting elements, connected together by the brand name only. The subscribers to the content receive the information about the elements of the Russian Knitting Style and strengthen their awareness of the brand. 4.4. ADVERTISING ON BROADCAST NETWORKS Broadcast networks or micro-blogging websites, such as Twitter cannot serve as a primary advertising channel. The owner of the product and/or brand will not be able to track the effectiveness of the brand related messages. Widely known brands are followed by a large number of subscribers. The owner of the content messages, who is interested only in the feedback to their own content, will have to obtain it by using other channels of communication. If Broadcast Social Networks are viewed only as a vehicle for broadcasting the advertising messages they are of little use to the owners of a product or a brand. However, these networks may be used for broadcasting the messages, which do not require a direct feedback. The messages of the new product features and/or updates, the messages connected to the product
12

Russian Knitting through front, http://www.youtube.com/watch?v=_CC297KWCK4

recalls, can be tweeted to the large number of users. The broadcast network thus becomes a suitable replacement to a mail list. Sony-Ericsson13 mobile phone manufacturer used tweeter to provide the users of Xperia X10 cell phones with the exact date of the upgrade of the Android OS on the handsets, which are sold to the users all over the world. The owners of the handset model subscribed to the messages coming from the account of the chief engineer responsible for the upgrade and were able to receive messages about the status of the upgrade rollout. 5. CONCLUSION For many companies using social network web sites for marketing activities is new and somewhat unfamiliar effort. The outcome of this effort cannot be measured with the same ease as the outcome of the traditional advertising campaign. Despite this fact the Social Network Sites should not be ignored by the brand owners and the product manufacturers. Using these sites can yield the following benefits: Social Networks have very distinct demographics. Products, fitting into these demographics can be marketed on Social Network Sites with ease. SNS can also be used as a vehicle for educating the users of SNS on the products which are not frequently used by their demographic groups Social Network Sites provide the marketing professional with the opportunity to deliver non-advertising messages about the product. These messages may serve as a tool of strengthening brand awareness. The product manufacturers can use these messages to provide additional information about the product features thus creating add-on value for the product

Despite their availability and affordability SNS cannot be used as the sole advertising mechanism for any product. Any marketing or advertising campaign for a product or service must consider other advertising channels. The strengths of SNS turn into their weaknesses when the product does not fit the demographics of Social Network Sites. The abundance of information posted on the Internet makes any web advertising campaign much slower as the product related message is delivered together with multiple other messages related to similar products and services. REFERENCES Arabie, P., & Wind, Y. (1994). Marketing and Social Networks. In S. Wasserman, & J. Galaskiewicz, Advances in social network analysis: research in the social and behavioral sciences (pp. 254-270). Sage.

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Sony Ericsson, http://www.sonyericsson.com/cws

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