Advertising on Social Networking Sites

Tweeting business information on Twitter

Given the popularity of websites such as Twitter, Facebook, MySpace and Linkedin, many large and small business owners are exploring the various options for advertising on social networking sites. These social networking ads can take many different forms. Some simply appear as banner ads, whereas others are information pages about a product or service.

Methods of Advertising on Social Networking Sites

There are three predominant methods of advertising on social networking sites:

  • CPM: CPM stands for "cost per mille," with per mille meaning the cost per one thousand impressions.
  • CPC: CPC stands for "cost per click." In this scenario, the advertiser pays the social network a specific amount of money for every visitor that clicks through the ad and visits the product or service website.
  • CPA: CPA stands for "cost per acquisition, and is also known as affiliate marketing. In this type of advertising, the social network publisher only gets paid when someone actually makes a purchase at the vendor's website. Amazon is an example of affiliate marketing.

Types of Social Networking Ads

In addition to the various methods of advertising, there are also numerous varieties of social network ads. These include:

  • Floating ads: These ads move across the screen of a specific web page.
  • Trick banners: These are the least popular form of ads, because they resemble an error message. The banner might have a dialogue box, which tells you that your computer is not secure, and certain actions must be taken. If you take these actions, you are brought to the advertiser's website.
  • Pop-up ads: Pop-up ads display the advertising in a new window.
  • Video ads: As the name implies, a video ad is similar to a television ad, since it displays a video that advertises the product.

Is Social Network Advertising Effective?

In examining the typical users of social networking sites, it becomes evident that many people join these sites for socializing, not shopping. As such, many members are annoyed by social networking ads, and do their best to ignore them. In fact, according to an article on NPR, many find that the gender and age targeted ads are downright offensive. Not every woman over 40 is interested in Botox, and not every guy in his 20s wants to meet "hot young single ladies."

Social Network Advertising vs. Social Network Marketing

While social network ads may not be as effective as hoped, many companies have had enormous success with social network marketing. Even better, this can be done without incurring any significant cost. Businesses and services can create their own pages on MySpace, and post regular bulletins to update their fans about their latest products.

As well, many companies are now setting up pages on Facebook, and encouraging friends to become fans. Some companies are using the microblogging site Twitter as a means of answering questions and offering quick updates to their regular and potential customers. For example, United Airlines has a clever program called "Twares," which are periodic, exceptionally good airfare deals that are only available to their followers on Twitter.

The ability to interact with, and receive feedback from potential and devoted clients is the main difference between social network advertising and social network marketing. The jury is still out as to which is the more effective method. Only time will tell.

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