Social Advertising

Abstract

In social advertising, ads are targeted based on underlying social networks and highlight when a friend has 'liked' a product or organization. This paper explores the effectiveness of social advertising using data from field tests of different ads on Facebook by a nonprofit. We find evidence that social advertising is somewhat effective, but that social advertising is less effective if the advertiser explicitly states they are trying to promote social influence in the text of their ad. Indeed, automated endorsements appear to backfire in general unless the advertiser refrains completely from promoting social influence in their ad content. We exploit variation in the appearance of endorsements due to differences in privacy settings, and find that the effectiveness of social advertising is due to the ability of targeting based on social networks to uncover similarly responsive consumers, especially for consumers in non-traditional target markets. Our results suggests that advertisers must avoid being overt in their attempts to use automated social endorsements in their advertising.