Social Network Ad
TABLE OF CONTENT

Executive Summary 3
Introduction 4

I) OVERVIEW 6
A) WEB 2.0 6
B) SOCIAL NETWORKING WEBSITES 10

II) ADVERTISING ON SOCIAL NETWORK SITES 35
A) THE DATA BASE ADVANTAGE 36
B) VIRAL MARKETING: WHEN THE USERS BECOME PART OF THE ADVERTSING PROCESS 43
C) WHO ADVERTISE ON SOCIAL NETWORK SITES 51

III) THE ADVANTAGES OF ADVERTISING ON SOCIAL NETWORK SITES 54
A) SOCIAL NETWORK SITES TRAFFIC: A WORLDWIDE EXPLOSION 54
B) PROXIMITY WITH CUSTOMERS 57
C) THE PROMISE OF EFFICIENT INTEREST BASED TARGETING 58
D) EFFICIENT VIRAL EFFECT 60
E) THE LOW COST 63
F) SOCIAL MEDIA OPTIMIZATION BENEFITS 63

IV) THE LIMIT WHILE ADVERTISING ON SOCIAL NETWORK SITES 65
A) PRIVACY ISSUES 65
B) POOR RELEVANCE OF THE ADS 70
C) CONTEXT AND PUSH STRATEGY 74
D) PRICE 76
E) LOW RATE OF LOYALTY 76
F) FAKE PROFILE INFORMATION 77

V) FORECASTS OF THE SOCIAL NETWORK ADVERTISING PERFORMANCE 79

Conclusion 83
Recommendations 85
References 87
EXECUTIVE SUMMARY

While couple years ago social networking was only a term used in sociology, it is now becoming part of the daily life of billion individuals all around the world. As their popularity is growing worldwide, online social network services such as Myspace and Facebook are now offering advertising tools for brands to communicate with the billion potential customers available there. Taking advantage of their billions rows of data coming from their users’ profiles and the efficient viral marketing techniques that characterize the Web 2.0, social network sites are promising a tool to target their users more efficiently than any other traditional media platform would do. Social network advertising is all about interactions between users and brands through interest based group applications (Facebook pages, Myspace Community