Social Media is a Creepy Business!

Every website, every magazine, every newspaper, every TV channel you’ve ever seen has the same business model: package a demographic and sell it to advertisers.  With the overwhelming use of modern social networking sites, like Facebook, one has to ask: “What’s their business model?”  The answer is simple – it’s the same media model.

Organizations like Google went from garage businesses to Goliath corporations because they found a way for individuals to package themselves by, essentially, telling a media tool what they care about, what influences them, and many more things you’d never admit to your best friend you wonder about.

Search engines were the first to use this data to sell to advertisers.  As an advertiser, I can target your location, device type, time of day, day of the week, and the key word or words used in your search query to pay to put my ad right in front of you.

Social networking sites these days can offer advertisers (like us) the ability to target our message by more than demographic and query information.  We can target by what you ‘like’, what you talk about (publicly), who your friends are, your age, income, and much more.

Here’s the problem.

Advertisers (the savvy ones anyway) know that what your close friends buy or react to has a great influence on your purchase decisions.  However, the majority of social networking users have more “acquaintances” than real friends online.  Maybe you have 10 close friends among your Facebook friends list of 1100.  How do advertisers filter out the 1090 that don’t influence you at all and advertise to the 10 that do?  Facebook has been scratching their heads over that one for months.

Google (with their new social networking site, Google+) came up with an idea.  Allow users to do categorize their friends for you by putting their friends, acquaintances, colleagues and more into friend “circles” (business, acquaintances, family, etc.) then sell the rights to advertise to specific “circles”.  Facebook allows users to do the same (categorize online friends), but no one much pays attention as it’s not a core feature of Facebook the way it is for Google+.

Am I freaking you out?

Don’t freak out if all this targeted advertising via social networks sounds a little creepy.  Few advertisers really target their message to this degree–fewer still, do it well.  The point is simple, social media and social networking sites are, at their heart, a business (albeit a little creepy) that needs to turn a profit for its investors/stakeholders.

If you’re an advertiser, you should be drooling about now.  If you’re just a casual user, just don’t freak out.