Thoughts on advertising in social media

Image by joanofarctan via FlickrI like to think of advertising as being divided into two groups. One is when we are already in buying mode, helping us to make final decision and other is more desire making, persuading us into something.

The first kind of advertising is the one we don’t mind to see. If you’re looking for a new bicycle, basically what you do is little research and then go and buy one. For bike sellers it’s smart to be in the middle of the buying process (when you’re researching). When we’re in buying mode we want additional possibilities available so we could buy better. When people know what to search and already have desire for something the SEM works great. This ads are aligned with user’s interests.

But people don’t know what they want or are at least not aware of all the possibilities most of the time, so we would like to make some very smart suggestions to them. Search box is just search box, someone has to type wish inside that it can come true. This is where the other kind of advertising, the one that makes desire for something, comes in.

Looking at front page of amazon.com is a fantastic case when I think about this. The core idea has been there for a long time, it’s nothing new, but it is still efficient. I admit it, I am a fan. Although we have the search box ready to find the specific product, we can easily browse our own personal product recommendations. Recommendations are based on our product buying history and our wish list. Advertising shouldn’t be done much differently. Search & Recommendations.

Facebook had a nice idea how to do recommendation based advertising, but beacon wasn’t done nor promoted right. I can see how this method could be effective for advertisers, but it’s a bit to pushy for the users. It would be a lot better, if facebook would just collect data about user buying habits and do further product recommendations based on that and other data it has. Privacy issues shouldn’t be such a problem, if users have basic understanding of what’s going on in the background and have possibilities to do something about it.

The thing is that people are not in social media for content, but for interaction with friends. This doesn’t mean social media cannot work as a platform for more than one thing. A place where people meet, chat, spend their time, but also have time to look around and maybe “buy” something. What would happen if amazon.com added social aspect to their online shop? would they lost their customers? I don’t think so and I don’t think that adding right “buying mode” to social media wouldn’t work.

Personal recommendations could be the big opportunity to extend SEM effectiveness in terms of conversion rate into social media. All that is needed for good recommendation engine is social map and buying data. In the end this will not generate so much buyers per amount of traffic as SEM does, but should do pretty well in absolute values based on the mass of views generated in social media…