To what Extent do Social Networking Websites have an Effect on the Advertisement Industry?

Social networking has become a widely used aspect of everyday life in contemporary society. Social networking refers to online communities in which people or groups can interact & communicate with each other. The most well-known examples of social networks are Facebook, MySpace, Twitter, and perhaps even YouTube. Social networking dates back to the mid-1990s, with examples such as Open Diary becoming popular. The widespread use of these has been largely due to the development of various new media technologies. New media technologies are digital in nature, and differ from that of traditional media. Examples include smartphones, broadband, DVDs, music downloads etc. Many new media technologies have been a result of convergence, the process whereby two or more media platforms are combined in one media product. The iPhone can be seen as a converged device, because it allows for telecommunications, photography, music playback & downloads, internet etc. Without the emergence of convergence & new media technologies, social networking sites would not retain high levels of availability. However, although sites such as Facebook have hundreds of millions of active users, social networking arguably carries bias to those in developed, Western countries and do not account for the majority of the world which cannot access the internet, let alone broadband.

It is evident that social networking has had a considerable impact upon the advertising industry, by integrating various marketing strategies into the website. Examples include banner ads, which are usually hyperlinked to the product or service that the advertisement is promoting. Advertising provides a major source of revenue for the social networking sites, which enables them to make the service free to their users, thus arguably increasing popularity on a massive scale, whilst still retaining a source of revenue to ensure profit. In turn, this creates the opportunity for the advertisements to yield more profit for the networks, because of the appeal of a massive target audience for the advertisers. However, some would argue that this gives the networks too much power to charge extortionate prices for the advertisers, thus ruling out small-scale businesses from the online market and ensuring the dominance of the ‘big players’. Conversely, another advantage of the impact of social networking sites is that it allows for the targeting of specific demographics, through the principles of web 2.0 & web 3.0. This is because advertisers can ensure that, by filtering demographics of whom the advert is distributed to, their target audience is reached.

However, contradictions have been posed to these advantages with criticisms of the impact which it has had. A major criticism is the issue of leaks, where advertisements are distributed via social networking sites prior to premiere. This infringes copyright and potentially harms the reputation & potential profit of the product in question, because the official advertisement will have already been seen by masses of people, therefore lowering interest in other promotions offered by the company.

In conclusion, it is almost a certainty that social networking websites have had a massive impact upon the advertisement industry. However, there is debate to whether this impact has been mostly positive or mostly negative, and would seem that the more positive it is for the networks, the more negative it is likely to be for the advertisers and vice versa.