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360i Point of View on

Social Graph Ad Targeting

September 2009

Overview

Social graph ad targeting is a way for marketers to target consumers based on who they’reconnected to within online social networks. This guide includes questions marketers should askwhen considering running such advertising.

How This Differs from Other Ad Targeting

You may have run campaigns targeting consumers based on their age and gender (demographic),where they live or happen to be at the moment (geographic), what they’re viewing on a Webpage (contextual), what Web sites they’ve visited and what they do there (behavioral), or whatkeywords they’re entering in a query box (search engine marketing). With social graph adtargeting, it’s now possible to target consumers based on their associations with each other.This type of marketing targets consumers based on their social graph, or the map of who they’reconnected to. Here’s how it can play out:

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Adam expresses interest in a new movie coming out, either by visiting the Web site for themovie or interacting with an application or ad about the movie.

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Ad targeting technology determines Betty is especially close to Adam, as she frequentlyinteracts with him via his public social network profile.

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Betty is shown ads for the new movie Adam was interested in because of her proximity toAdam in his social graph.This targeting can happen several ways:

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Within a social network

: Adam and Betty are friends on MySpace so they’re servedrelated ads from the same marketer. This is the most specific example of targetingconsumers based on their social graph.

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Across social networks

: Adam, a movie buff, is tagged as an influencer on one socialnetwork because he posts a lot of updates, comments, and photos. The social network ispart of a broader ad platform that can similarly target Betty, a movie buff and influencer ona different social network. This can involve social graph ad targeting, but it can also involvetargeting influencers with certain interests even when they’re not directly connected.

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Across publishers

: Adam visits MovieXYZsite.com, and he also often interacts with Bettyon a social network. When Betty later goes to a portal, she sees an ad for that movie. Thisis a hybrid model of social graph ad targeting and behavioral targeting or retargeting.In 2007, the Wharton School of the University of Pennsylvania completed alandmark studyonsocial graph ad targeting, testing the ads for a telecommunications firm that was marketing anew service.They found that:

Integrated Solutions. Measurable Results.

360i Point of View on

Social Graph Ad Targeting

September 2009

"Network neighbors – those consumers linked to a prior customer – adopt the service at arate three to five times greater than baseline groups selected by the best practices of thefirm's marketing team. In addition, analyzing the network allows the firm to acquire newcustomers who otherwise would have fallen through the cracks, because they would nothave been identified based on traditional attributes."The study had its limitations though. The network effect was much stronger for a new technologyservice the firm was promoting than it was for a new pricing plan. One theory is that the networkeffect is much stronger when the product or brand promoted lends itself to organic word of mouthbuzz. Far more research is needed across more verticals to provide a clear understanding of what’s happening.

Privacy Considerations

Targeting consumers based on their connections can raise concerns with marketers andconsumers. That’s good because it has made some social graph targeting companies improvetheir privacy standards, and it has caused others to prominently address these issues. All fourcompanies profiled further below, for example, offer ways for consumers to opt out of beingtargeted by their technologies.The biggest concern when targeting consumers based on their relationships or social media usageis that they will be targeted based on personally identifiable information. Three of the fourcompanies profiled here do not collect any personally identifiable information (PII). The one thatdoes, Socialmedia.com, only does so if consumers opt in through an ad unit, and PII is only usedif a profile is public on that site (no PII is used from private profiles).Other forms of targeting rely on behavioral data, whether within a network or retargeting acrosspublishers. This is common practice for digital marketers and publishers, and 360i can work withmarketers to ensure that any such campaigns adhere to best practices with privacy standards aswell as any requisite degree of transparency so marketers are comfortable with where their adsrun.

Integrated Solutions. Measurable Results.

360i Point of View on

Social Graph Ad Targeting

September 2009

This example from BusinessWeek shows just one person’s social graph and how his connections cluster themselves.(source:Learning, and Profiting, from Online Relationships, May 21, 2009)