Saturday, November 17, 2007

Will social network sites transform ads?

Depending on your age and memory, last week was a week of radically new or reassuringly old developments in the advertising industry.

To Mark Zuckerberg, who is 23 and the boss of Facebook, a popular social-networking Web site, it was the former. Standing in front of about 250 mostly middle-aged advertising executives on Nov. 6, he announced Facebook was offering them a new deal.

"For the last hundred years media has been pushed out to people," he said, "but now marketers are going to be a part of the conversation." Using his firm's new approach, he claimed, advertisers will be able to piggyback on the "social actions" of Facebook users, since "people influence people."

Zuckerberg's language was strikingly similar to that of Paul Lazarsfeld and Elihu Katz in their book "Personal Influence," a media-studies classic from 1955.

They argued that marketers do not simply broadcast messages to a passive mass audience, but rather that they target certain individuals, called "opinion leaders." These individuals then spread, confirm or negate the messages of advertisers through their own "social relationships," by word of mouth or personal example.

Lazarsfeld and Katz, of course, assumed that most of these conversations and their implicit marketing messages would remain inaudible. That firms might be able to eavesdrop on this chatter first became conceivable in the 1990s, with the rise of the Internet. Thus the main thesis of "The Cluetrain Manifesto," written in 1999, was that "markets are conversations" which the Web can make transparent.

Zuckerberg's underlying idea is therefore hardly new. But, says Randall Rothenberg, the boss of the Interactive Advertising Bureau, a trade association, the announcements this week by Facebook and its larger rival, MySpace, which has a similar ad system, could amount to a big step forward in conversational marketing.


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