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Consumers may enjoy interacting with friends, acquaintances and strangers across social media channels, but that doesn't mean they trust them as a source of advertising. However, a new host of companies are connecting brands to consumers through their social connections. Just as behavioral targeting has come under fire for tracking consumers online without their knowledge, companies that serve ads to individuals based on something someone in their social network has done will have to tread lightly to avoid regulation and consumer ire.

But that isn't going to stop companies from diving in head first.

Start-ups like 33Across, Lotame and Media6-Degrees are leveraging individuals' social graph to serve them targeted advertising. According to a story in the Wall Street Journal today:

"Both Facebook and MySpace allow marketers to target ads on their sites to consumers based on the information users include in their profile, such as occupation, age, location and interests. The new group of start-ups thinks that the data mapping connections between people—rather than their profile information—are more valuable."

The Journal also explains how eBay worked with 33Across to target people's social connections: 

"If an eBay customer shared a movie review with an acquaintance, 33Across identified that connection and places a cookie, or anonymous string of tracking data, on the acquaintance's browser so that they later could be targeted with a relevant ad whenever they visit certain sites.

Advertisers say the new wave of social-networking targeting is registering impressive results. Daphne Liska, senior manager of Internet marketing at eBay, said the 33Across campaign was more successful than standard online ads and that eBay plans to continue using social data to find new customers."

By now, consumers are accustomed to being followed by a brand they directly mention in social media. (Just today, I twittered about how bad the movie Death at a Funeral looks. Low and behold, @deathatafuneral is now one of my followers). However, few social media users are likely aware that advertisers are tracking them through their online connections.

But marketers are now looking for reliable ROI in social media. And they're finding it. Earlier this week, a company called Vitrue calculated the worth of a Facebook fan: $3.60. But as my colleague Patricio wrote earlier today, the "media value" of a Facebook fan is a deceptive concept.

Here's one reason: the connections across your social graph are not equal. Determining their value is not an easy task. For instance, the people you interact with most on a site like Facebook may not be your closest friends and family in real life. But anonymous cookies could have trouble discerning a detail like that. Moreover, engaging with a colleague on Twitter does not mean you care about what eBay auctions he or she bids on.

Regulators are already wary of services that track behavior across social media, and these companies will have to be careful with what they're serving up. As tools like this are still in their infancy, it is unclear what exactly the implications could be. However, if it becomes clear that the ads you receive are directly dependant on the behaviors of your online social circle, we could quickly see people whittling down the numbers in their social graph. 

Image: Zazzle

Meghan Keane

Published 15 April, 2010 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

721 more posts from this author

Comments (4)

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Gaz

Call me naïve, but I don't understand the concern with targeted/behavioural advertising. Apart from the obvious conception - "if you don't want people to know stuff about you then don't publish it" - I'd much rather have adverts geared towards my interests specifically, rather than an assumption based on the demographical information depending on a website's typical audience. For example, I'm a fan of rock music, but Spotify provides all genres of music, so when I'm listening to music through it, I'd much rather have rock music adverts playing at me than ads for dance, pop and rap music. Not only is the advertiser more likely to make a sale, but it might actually be a product that I'm genuinely interested in. Surely it's win-win?

over 6 years ago

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Sanjit Chudha

I don't buy the idea that people will prune their social graph to avoid targeted advertising based on it.   Unless you're mixing with whackos you wouldn't receive anything offensive . . . .

The core issue here is one of ROI.   For example I have over 300 LinkedIn connections and a similar number on Facebook.   Great.   But in terms of my interactions with those people and the quality of those interactions, a social graph analysis would miss those connections which deliver most value to me as an individual and so dilute the impact of any 'targeted' ad.   That's not great ROI is it?

over 6 years ago

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Greg Caswell, Product Manager at Zigzag Technologies

Gaz, what you talk about is 'content targeting', not behavioural or tracking targeting. In your example the publisher (Spotify) and the advertiser can make educated assumptions about the type of person who listens to rock music and serve relevant ads. They can do this through audience (online and offline) research, and there is no need to track you or any other individual using the Spotify service. Using your analogy a bit, behavioural targeting is like someone listening to you phone conversation and hearing you say that you like rock music and then serving you ads based on what you said or did. In certain circumstances that is fine, and should potentially make a better user experience, but who knows what you'll be saying in your conversation, and do you really want someone you don't know, or have given approval to, to track what you do on the internet and then serve you ads based on your browser history? Also do you know what information these companies have stored and what they will eventually do with it? Historically advertisers have been very poor at handling and understanding data, so maybe there isn't anything to worry about, but only recently M&S got its fingers burnt using retargeting, when a mother looked at wine to buy on the M&S site, and then later spotted M&S advertising wine to her daughter, on a kids site. Now the ad network they were using should have had checks in place, but appear to be more interested in the money than the consumers privacy.

over 6 years ago

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Media6Degrees

Hi Meghan,
Thanks for including Media6Degrees in your story.  Although we're sometimes mentioned alongside behavioral targeting companies, what we do - social targeting - is actually quite different than BT.  We're not interested in looking at people's online behavior or demographics; instead, we look at a consumer and then use non-identifiable social data to rank his or her strongest online connections, serving ads to both the initial person and the people most likely to respond to the ad.  We've found that this approach performs better than traditional BT and provides better scale.

Best,

The Media6Degrees Team

over 6 years ago

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