IBIMA Publishing Journal of Internet Social Networking and Virtual Communities http://www.ibimapublishing.com/journals/JISNVC/jisn c.html Vol. !"## $!

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Marketing Opportunities with Social Networks

Victoria Bolotaeva and Teuta Cata
Northern Kentucky University, USA ____________________________________________________________________________________________________________________________ Abstract )ocial net"or#s are "ebsites "hich allo" users to communicate! share #no"ledge about similar interests! discuss $avorite topics! revie" and rate products*services! etc. +ven though social net"or# mar#eting is still in its in$ancy! it holds a potential success $or businesses i$ it is care$ully integrated in the mar#eting mi,. This paper discusses the advantages and ris#s that social net"or# mar#eting holds. -uture opportunities $or social net"or#s! particularly mobile social net"or#ing! are also discussed Keywords: )ocial .et"or#s! mar#eting! /nternet ____________________________________________________________________________________________________________________________ Introduction /n recent years! the e,pansion o$ 0eb 2.0 and the ever'increasing advancement and popularity o$ online social net"or#s have had a tremendous impact on the "ay companies conduct mar#eting. The basic mar#eting principles still apply1 ho"ever! companies must no" be creative in order to target speci$ic audiences and ma#e a pro$it. As 2lson 3200%4 points out! through use o$ certain technologies! companies are attracting ne" clients! servicing current clients! and ma#ing money! as "ell as promoting brand image! providing help$ul services! and gearing up targeted advertising campaigns. )ocial net"or#ing is rapidly e,panding1 0illiamson 3200%a4 estimates that there "as an 11 percent increase o$ people visiting social net"or#ing sites bet"een 2005 and 2006! "ith 75%.8 million people9:1; o$ the <.). /nternet user population7 visiting the sites in 2006. -urthermore! the trend "ill continue! and! by 201 ! the number "ill increase to 82 percent. According to an e=ar#eter 320064 study! nearly si, out o$ ten <nited )tates users no" communicate "ith businesses and believe that the businesses must 7interact "ith their consumers7 and 7deepen the brand relationship7 via online social net"or#ing. This paper "ill attempt to understand the "or#ings behind social net"or# advertising! determine "hether it is pro$itable $or businesses to promote their products and services via the social net"or# plat$orms! and determine the opportunities and pit$alls o$ social net"or# mar#eting.

Social Networking Sites - Brie !escription and "haracteristics )ocial net"or#ing sites are instruments $or building virtual communities! or social net"or#s! $or individuals "ith similar education! li$estyles! interests! or activities. Bur#e 3200>4 de$ines social net"or#ing sites as& ?@ a loose a$$iliation o$ people "ho interact through "ebsites. The "eb enables any person to build a vast number o$ relationships "ith others! regardless o$ geographical distance.A These sites are $urther bro#en do"n into sub net"or#s! based on demographic or geographical pre$erences. Bopular "ith the student body! certain social

Copyright 2011 Victoria Bolotaeva and Teuta Cata. This is an open access article distributed under the Creative Commons Attribution License unported .0! "hich permits unrestricted use! distribution! and reproduction in any medium! provided that original "or# is properly cited. The article is a reprint o$ a 200% version. Contact author& Teuta Cata e'mail& catat(n#u.edu.

net"or#ing sites establish net"or#s "ithin net"or#s $or particular schools and universities in order $or students to sign up! interact "ith schoolmates! and participate in online events. =ost social net"or#ing sites also provide other means o$ online communications! such as email! instant messaging! chat! blogs! discussion group! and others. C"yer! DiltE! and Basserini 320054 advise that the main motivation $or social net"or#ing is communication and maintaining relationships. T"o maFor social net"or#ing sites are =y)pace.com and -aceboo#.com. According to GuantCast 3200%4! =y)pace.com is the tenth most visited site "ith 86=H uniIue monthly <.). visitors! "hile -aceboo#.com is the third most visited site "ith %8=H uniIue monthly <.). visitors. These sites have become synonymous "ith social net"or#ing! have established solid user bases! and! in turn! have created concerns regarding the user privacy and protection. -urthermore! in order to attract visitors to their sites! social net"or#s use a di$$erent mar#eting mi, to attract visitors to their "ebsites. The :Bs that are used on such "ebsites are 3Clemons! 200%4& 0ersonal: They are personally relevant. The in$ormation in social "ebsites resonates to the personal interest o$ users. 0articipator1: )ocial net"or#ing "ebsites allo" participation. 0h1sical: =any social net"or#ing "ebsites allo" users to meet online and outside the cyberspace. 0lausible: Barticipation and per$ormance in some social net"or#ing "ebsites reIuire some rules "hich allo" all users to $unction. Additionally! social net"or#ing sites are e,panding themselves in ne" areas. -or e,ample! -aceboo# is pursuing a strategy to become an operating system $or the /nternet 3)ha$er! 20064. By using Application Brogramming /nter$ace! -aceboo# allo"s users to create and deploy di$$erent custom'made applications and $eatures! "hich can be business'related ads! promotions! or coupons or non'business applications such as games! IuiEEes! meetings! groups! $an clubs! etc. Social Network Marketing Ad#antages

)ocial net"or# mar#eting can be very advantageous $or businesses. According to 0eston 320064! social net"or#ing! i$ approached correctly! can help $ind talent! build brand a"areness! $ind ne" customers! and help conduct brand intelligence and mar#et research. The t"o main "ays o$ advertising in a social net"or# are through "ish list $eatures and tell'a'$riend applications. The communication in social net"or# gets shoppers to listen to one another! revie" ratings $or products and services! and provide product #no"ledge and personal in$ormation. )ocial net"or#s protect users $rom interaction "ith the outside "orld! and #eep in$ormation and interaction a"ay $rom strangers 3Bur#e! 200>4. /n addition! )#ul 32006a4 sees social net"or# mar#eting as ?the "ave o$ the $uture!A estimating that by 2011! online social media advertising in the <nited )tates "ill be around J2.8 billion. De also states that the "ebsites are Fust starting to understand all the possibilities that social net"or# advertising o$$ers and they are no" o$$ering improved advertising opportunities $or businesses. De $urther believes that all businesses can bene$it $rom social net"or# advertising and clari$ies that 7as the e$$ectiveness o$ traditional advertising and mar#eting techniIues $ade! 0eb 2.0 mar#eting is the $uture.7 2rand Intelligence -irst! businesses have an advantage o$ brand intelligence conducted on social net"or#s. According to Bettey 320064! businesses cannot dismiss the amount o$ tra$$ic generated by social net"or#s. )he continues to say that social net"or#s used to appeal more to the young audience. Do"ever! they are no" gearing to other demographic groups! such as 7career'based social net"or#s! shopping'based social net"or#s! and employee groups.7 Thus! businesses can collect consumer $eedbac#! establish a brand presence! or! perhaps! Fust observe the "ay their brands are discussed and perceived. =oreover! it gives a business capability to develop a trusting relationship "ith a customer by direct interaction via 0eb 2.0 $eatures! address their needs and concerns! or even conduct mar#et research. /n $act! according to )acho$$ 320064! the main advantage o$ having a social net"or# presence is 7the amount o$ in$ormation an organiEation can gain about its customer base.7

De continues! saying that in$ormation can be mined regarding all sorts o$ trends! including product development! customer $eedbac#! loyalty management! and customer segmentation! among others. ' New 3arketing Channel -urthermore! since social net"or#s provide a "ealth o$ "ord o$ mouth in$ormation regarding the brands and products! Bettey 320064 debates that the businesses must approach social net"or#s the same "ay they might approach search engines! revie" sites! and price comparison sites. /n addition! she clari$ies that there are other strong online mar#eting strategies that can be employed by retailers! such as viral propagation via $riends communicating among each other and user engagement by building application. 0eb 2.0 is a mar#eting channel that needs to be integrated "ith other traditional mar#eting channels! and considered as part o$ the mar#eting mi,. .e" media is not a replacement o$ traditional mar#eting tools such as local ne"spaper! TV! or radio station! but another tool that is able to reach the community "hich pre$ers electronic media. <nli#e other traditional mar#eting tools! the advantage o$ this ne" electronic channel is that it is able to communicate globally and enrich the mar#eting to the personal level 3Brandt! 20064. Cost Sa ing =oreover! as )#ul 32006b4 points out! social mar#eting can be an ine,pensive "ay to promote a company rather than putting together a huge mar#eting team or a prohibitive budget. -or e,ample! =y)pace 3200%4 charges J28 minimum to start advertising on =y)pace! plus J0.28 per advertisement. -aceboo# 3200%4 charges J8 minimum daily budget! plus either J0.01 or J0.18 cents depending on the advertising campaign purchased. Lin#ed/n 3200%4 charges a J28 rate per thousand clic#s. Connections /n addition! 0eston 320064 also e,plains that there are other "ays businesses can bene$it $rom online social net"or# mar#eting. -irst o$ all! social net"or# databases o$ prospects give businesses opportunities to mine social net"or# in$ormation and contacts identi$ied through social

net"or#s. -urthermore! social net"or#s may be a great "ay to $ind suppliers or employees1 $or e,ample! the sites li#e Lin#ed/n! "here people gather to e,change pro$essional in$ormation. 2rand 'wareness 0eston 320064 $urther argues that brand a"areness is important "hen it comes to social net"or# mar#eting! and "idgets are a good "ay to establish a presence in social net"or#s. De says that through the use o$ "idgets! businesses have a lot o$ opportunities to mar#et KthemselvesL! company! and add value in the overall business ecosystem.. =oreover! 0eston 320064 e,plains that in order to raise brand a"areness! employers should encourage their employees to participate in social net"or# mar#eting and stay connected to the community. Do"ever! these activities should also be monitored in order to discourage abuse. -inally! although some companies do not seriously approach building brand a"areness on social net"or#s! it is a good approach to build that into the business model. De suggests businesses start "ith small steps. /$ they $ind the method pro$itable! then they should consider introducing their o"n social net"or#.

Social Network Marketing $it alls Along "ith the strengths! there are a $e" "ea#nesses! "hen it comes to online social net"or# advertising. /ssues such as aggressive advertising! lac# o$ e'commerce abilities! invasion o$ user privacy! and certain legal pit$alls! among others! can be maFor disruptions to social net"or# advertising. 'ggressi e 'd ertising -irst! it is thought that i$ businesses target the consumers too aggressively "ith advertisements and product promotion and selling! the consumers "ill not choose to stay in the net"or#. As Bettey 320064 e,plains! businesses should establish their net"or#ing presence on content produced by members! and then develop strong applications in order to encourage users to engage members in supplying the $eedbac# in areas such as product design.

4ack of e5Commerce 'bilities =oreover! it is "idely thought that social net"or# sites are not yet ready to conduct direct e' commerce. Bettey 320064 advises that businesses should not become early adopters o$ commerce capabilities on social net"or#s. )he $urther clari$ies that the users "ill not return or stay "ith the net"or# i$ there is too much pressure to buy or i$ the net"or# is vie"ed as too commercialiEed. 4egal Issues /n addition! there are also certain legal do"n$alls "hen it comes to advertising on social net"or#s. As )#ul 32006c4 suggests! there are a number o$ e,isting media la"s! since social net"or# mar#eting involves the publishing or broadcast o$ online content. Thus! businesses have to be especially care$ul in mar#et research and advertising la"s in order not to cross legal boundaries. 4ack of 2rand Control Advertising in a social net"or# brings ris# to product brands. )ocial net"or#s are user' generated content "here end users "rite about their e,periences "ith products! services! customer service! etc. The content in such net"or#s may be critical to the product and companies have very little control in "hat end users share in their social net"or# 3)lavin! 200%4. )pecial social net"or#s! such as those dealing "ith the medical $ield! have a massive amount o$ un$iltered discussions bet"een patients! caregivers! and physicians 3+llerin! 200%4. =onitoring general perceptions o$ brands $rom the online community and addressing issues discussed online that had not been previously considered! is e,tremely important $or product*service brands. (ata mining

controversial! and! it is proFected that the privacy issues "ill not allo" easy access to consumer private data. Cata mining companies are collecting $ree in$ormation $rom personal posts and applications. A company called ?ColligentA collects such $ree in$ormation! mines it and sells statistical data to record label companies 3Cata =ining! 200%4. -or e,ample! CisneyMs Dolly"ood Necords label used ColligentMs data to reach out to the Latin American community to advertise Oonas Brothers ne"est album.

Social Network Marketing Opportunities There are numerous opportunities $or a business to advertise in the social net"or# situation! including raising public a"areness regarding the business and community involvement! as "ell as the ne,t step in social net"or# advertising! such as advertising on mobile handsets. 0ublic 'wareness -irst! as )#ul 32006d4 advises! there are "ays that social net"or# mar#eting can be advantageous in business. Although some businesses may $ind it unnecessary to position themselves on social net"or#ing sites! it is a good "ay to advertise their products*services and #no" "hat consumers thin# and "ant. De continues to say that social net"or# mar#eting may play a very important role "hen it comes to the online success o$ a business. De $urther goes on to e,plain social net"or# mar#eting allo"s the business to get connected to the public and build their brand. In ol ement

-inally! as e,plained by Bettey 320064! social net"or#ing is an opportunity to collect consumer data1 ho"ever! these data pools cannot Fust be tapped into. )he continues to say that! as the time goes by! social net"or# users are more "ary regarding sharing their private data. /n order to have access to the consumer in$ormation! businesses must build "idgets and applications that "ill reIuire that a user share at least some personal data. Do"ever! the topic is al"ays

/n addition! as Oavitch 320064 points out! in todayPs economic do"n$all! $ree social mar#eting may be a good alternative to the costly traditional mar#eting campaigns. De points out that in order to establish an online presence! there is an emerging trend o$ businesses going as $ar as hiring dedicated persons "ho manage social net"or#ing inter$ace o$ the organiEation and communicate and interact "ith the users and the communities.

De $urther comments that small businesses should be involved "ith many 0eb 2.0 content creation tools such as social net"or#s! $orums! and blogs. -urthermore! he e,plains that getting involved on social net"or#s "ill also mean protecting business name! so that no third parties can use it. Qlein 320064 tells that in order to be success$ul at social net"or# mar#eting! companies should $irst incorporate online ads into their business model! set concrete business goals! and then start e,perimenting. -urthermore! "ith the ever' gro"ing social net"or#ing presence! online social presence must be approached as an opportunity to e,pand the business by product and service promotion rather Fust consumer interaction. 3obile 6andset 'd ertisements Another use$ul idea is to use mobile handsets as a means o$ social net"or# advertising. As Qhari$ 320064 points out! social net"or# plat$orms such as -aceboo# and =y)pace have given ne" meaning to handheld devices. Thus! businesses may see this as an opportunity to promote their services and products via the mobile devices. Social Network Marketing %hreats As "ith any advertising campaigns! social net"or# mar#eting comes "ith its share o$ ris#s. Necent events! such as a tremendous $all in the economy as "ell as notorious ethics investigations into the invasion o$ customer privacy and data! have impacted the popularity as "ell as economic $easibility o$ social net"or# advertising. 7conomic (ownfall 0ith the economy in shambles both domestically and globally! social net"or# mar#eting has su$$ered its share. -urthermore! there "as a do"nturn in advertising spending numbers! as "ell as in the predictions $or $uture years. 0illiamson 320064 no" estimates that the advertising spending "ill drop $rom the proFected J1.6 billion $or 200% to J1. billion. -urthermore! 0illiamson 3200%b4 clari$ies that it has been sho"n that 7tapping into consumersM conversations and spreading brand a"areness virally has proven more challenging than companies originally thought.A

7thics -inally! according to )#ull 32006e4! ethics has been a maFor problem "hen it comes to social net"or#ing sites. De e,plains that although businesses have earned their seat in social net"or#ing sites! they need to be very cautious regarding invasion o$ user privacy. -urthermore! lac# o$ social online mar#eting plans as "ell as aggressive harvesting o$ personal user data can bac#$ire on the business.

8hird 0art1 'd ertisement 0latforms

As pointed out in the privacy policies! social net"or#ing sites have been legally sharing user data "ith third party advertisers. /n an e$$ort to increase the pro$it margin base! social net"or#s have stepped into the ne,t generation o$ the custom'tailored ad campaign! $urther incriminating user privacy.

BereE 320054 says that -aceboo#Ps Beacon online ad system acted behind the scenes! "ith the user unable to bloc# or opt out o$ sending data $eeds $rom third party sites to -aceboo#. This had brought angry protests $rom the =ove2n.org organiEation! as "ell as $rom users a$$ected by the application. This development raises issues o$ ho" $ar the sites are allo"ing third party advertisers to intrude into the companyMs customer base and per$orm commercial data mining in order to run a custom tailored advertising campaign. According to )tory and )tone 320054! the sole purpose o$ Beacon "as ?to allo" advertisers to run ads ne,t to these purchase messagesA. /n other "ords! social net"or#ing sites are no" developing so$t"are "ith the speci$ic intention o$ letting the advertisers collect user data in order to sell their product.

/n her article! Dolahan 320054 e,plains the signi$icance o$ third'party plat$orms! "here a social net"or#ing site such as -aceboo# and =y)pace are trying to get usersM attention on the ads that support their sites. This application puts the site user in a direct relationship "ith the advertisers by $orcing the user to include direct

$eeds $rom the third party participating "ebsites in the pro$ile. Thus! although third party advertisement plat$orms can be o$ po"er$ul monetary bene$its $or the social net"or#ing sites! they come "ith a number o$ user privacy issues that are o$ten bypassed. "onclusion )ocial net"or#s are popular places $or people o$ all di$$erent bac#grounds and e,periences to meet. -urthermore! they can be po"er$ul tools $or businesses to establish brand presence! build brand a"areness! as "ell as save advertising costs in economically dismal times. There are opportunities $or businesses to gro" public a"areness and get involved in the communities! as "ell as continue to research $or other "ays to advertise on social plat$orms! such as incorporate mobile handset devices into the mar#eting model. Do"ever! businesses must also be "ary o$ ethical issues such as intruding user privacy! aggressive advertising! and spamming! in addition to legal pit$alls and data mining issues. =oreover! the businesses must have a strategic e'commerce plan! as social net"or#s are not Iuite up to par on e'commerce transactions. Brotecting user privacy and securing the userMs personal data has become one o$ the most imperative goals o$ todayMs society. /t is particularly important in the age o$ rapid e,pansion and tremendous popularity o$ social net"or#ing sites. /n conclusion! social net"or# advertising is $lourishing in the era o$ 0eb 2.0 end'user interaction. There$ore! it is advisable that businesses not ignore the opportunities to Fump in and e,pand their customer base.

)ystems! retrieved online at """.elsevier.com*locate*dss Cata =ining 3200%4. Cata =ining )ocial .et"or#s! """.neuralmar#ettrends.com. C"yer! C.! DiltE! ). N.! S Basserini! Q. 320054. Trust and privacy concern "ithin social net"or#ing sites& A comparison o$ -aceboo# and =y)pace. http&**csis.pace.edu*Td"yer*research*C"yerA= C/)2005.pd$ +llerin! B. 3200%4. Bracticing )a$e )ocial =ar#eting! > )teps to 2nline +ngagement! 0harmaceutical 79ecute! %! 6'11. e=ar#eter. 320064. Consumers A"ait on )ocial .et"or#s. e=ar#eter Nesearch. http&**""".emar#eter.com*Article.asp,U idV100>>22 -aceboo#. 3200%4. -aceboo# Advertising. http&**""".$aceboo#.com*advertising* Dolahan! C. 320054. -aceboo#& =ar#eters Are Rour P-riendsP. Business0ee#.com. http&**""".business"ee#.com*technolo gy*content*nov2005*tc200511>W26%111 .htm Oavitch! C. 320064. +ntrepreneurs .eed )ocial .et"or#ing. +ntreprenuer.com. http&**""".entrepreneur.com*humanre sources*employeemanagementcolumnist davidFavitch*article1%6156.html Qhari$! 2. 320064. )ocial .et"or#s Xo =obile "ith Dandset =a#ers. Business0ee#.com. http&**""".business"ee#.com*technolo gy*content*oct2006*tc200610%W>05280. htm Qlein! Q. 320064. Are )ocial .et"or#ing )ites <se$ul $or BusinessU Business0ee#.com. http&**""".business"ee#.com*smallbiE *content*aug2006*sb200606>W :>0%:.h tm Lin#ed/n. 3200%4. Lin#ed/n& Advertise 0ith <s. http&**""".lin#edin.com*staticU#eyVadv ertisingWin$o =y)pace. 3200%4. 2nline Advertising and =y)pace Ads on =y)pace.com. https&**advertise.myspace.com

&e erences Brandt! Q. ). 320064. Rou )hould be on RouTube! '2' 2ank 3arketing& :03>4! 26' . Bur#e! Q. 3200>4. .et"or# to Crive Nevenue! 8arget 3arketing&2% 324! 28'2>. Clemons! +.Q. 3200%! $orthcoming4. The comple, problem o$ monetiEing virtual electronic social net"or#s! Cecision )upport

2lson! T. 3200%4. Build Business <sing )ocial .et"or#s. BC 0orld. http&**""".pc"orld.com*businesscente r*article*18% 0%*buildWbusinessWusingWs ocialWnet"or#s.html BereE! O. C. 320054. -aceboo#Ps Beacon =ore /ntrusive Than Breviously Thought. BC0orld.com. http&**""".pc"orld.com*article*id!1:0 162'page!1*article.html Bettey! C. 320064. Xartner )ays )ocial .et"or#s Are Attracting Too =uch Tra$$ic $or Netailers to /gnore. Xartner Nesearch. http&**""".gartner.com*it*page.FspUidV >>0:0% GuantCast 3200%4. Guantcast <) )ite Nan#ings $or sites 1'100. http&**""".Iuantcast.com*top'sites'1 )acho$$! =. 320064. =aFority 2$ -ortune 1!000 Companies 0ill <se )ocial =edia. 0ebBro.e"s. http&**"""."ebprone"s.com*topne"s* 2006*10*0>*maFority'o$'$ortune'1000' companies'"ill'use'social'media )ha$er! T. 320064. 0ill you be my ?-riendAU <se )ocial .et"or#ing )ites to /ncrease Tra$$ic to your 0eb )ite! """.dealerne"s.com )#ul! C. 32006a4. )ocial .et"or# =ar#eting ' The 0ave o$ the -uture. Nelativity Business Technology )olutions. http&**""".relativitycorp.com*socialnet "or#mar#eting*article25.html )#ul! C. 32006b4. 8 Neasons 0hy )ocial =ar#eting is a =ust. Nelativity Business Technology )olutions. http&**""".relativitycorp.com*socialnet "or#mar#eting*article1.html )#ul! C. 32006c4. )ocial .et"or# =ar#eting Y Legal Bit$alls. Nelativity Business Technology )olutions. http&**""".relativitycorp.com*socialnet "or#mar#eting*article2>.html )#ul! C. 32006d4. Do" To <se )ocial .et"or# =ar#eting To Rour Advantage. Nelativity

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