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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."
"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.