GenuineVC David Beisel's Perspective on Digital Change

February 1, 2006

Sometimes I enjoy writing about ideas that aren’t fully thought through (like the post Musing on Three Not-So-Fully-Baked Ideas from last summer) – these are often the posts in which I receive some of the most interesting reader feedback (both in the comments and e-mails). I’ve written in the past about the notion of social commerce, content which doubles as product advertising shared/recommended by others. But what about the more general notion of “social advertising?”

Yahoo and a few start-ups are playing a hand at social search, but I haven’t seen much talk about the notion of social advertising. I am not referring to the notion of marketing with a goal towards positive societal change, but rather the concept that relevant online advertising could be potentially delivered to consumers based on information about which ads were well received by those in their social network? For example, if I click on an ad about, say a specific car, it’s likely that those who I know are also in a demo/psycho-graphic would also be interested in the same advertising content. In other words, would a MySpace or a Yahoo360 benefit from displaying ads also based on relevant data known about the user’s connections in conjunction with the other methodologies available? I don’t think that this concept is limited to social networks per se, but rather any content site which collects and contains social connection data. Perhaps a full implementation of this type of ad-serving is a few years off, but the idea of influencing advertising content based on the knowledge of a user’s peer-set isn’t necessarily a distant dream. Thoughts?

  • Greg Linden

    Hi, David. Social advertising, as you describe it, isn’t that different than personalized advertising.

    In personalized advertising, ads are targeted to you based on your behavior and interests. Knowing what ads will be effective for you requires knowing what ads are effective for people like you. So, the ads are targeted using information about which ads were well received by those with similar interests to you.

    The social advertising you propose is basically the same, but limited to using information about people in your explict social network instead of likeminded people in general.

    The problem with using a social network is that you have to have badly limited data. You are requiring everyone to explicitly list their social network. Most people won’t bother doing that and, for those that do, the data usually will be sparse and incomplete.

  • Zach Coelius

    A though worth mulling on. I agree with Greg that it would be tough without great data. But I like it. Just have to figure out how to make it work.

  • John Treadway

    The data is not all that hard to get, at least in some circumstances. Would require a pretty good correlation engine to do this across social networks, but within a network and if the network is ad supported (myspace, etc.), you could do this fairly easily.

  • Bernard Moon

    Overall, this is a space that some of the major social networks are trying to tackle. For example, how does MySpace optimize their advertising revenue when contextual advertising doesn’t really work in these types of online environments. Also the purpose of a user visiting a social network is very different than a search engine. With the former, there is no purpose the majority of the time besides people watching or trying to get people to look at you. So presenting any type of ad is a lot less effective.

    Banners/branding ads work… sort of within social networks, but it’s difficult to target a specific consumer profile especially since individual profiles are all part of the long tail and on average don’t generate enough pageviews.

    This is an issue our startup, GoingOn Networks, is just starting to tackle and think through with some of our partners.

  • Scott Beatty

    David – I have a twist on this concept that you may find interesting. Will keep you posted.

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