Social Media & Todays

Advertising World
A critique of the current business model and
ethics in the advertising industry
Alexandra Chunn: JOUR 4981 Fall 2015

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Social media play a crucial role in engaging and advertising to the desired target
market. It is important to dissect the implications each social media venue plays in online
advertising. The argument during this paper will be that the traditional advertising market size
doesnt matter anymore. The importance of the geographic demographic has diminished in the
global marketplace, and a company or business doesnt always have to be physically present
to be successful, but must have an integrated social media presence to attract consumers in a
broad demographic.
A strong presence on major social media sites such as Facebook, Twitter and
Instagram is essential to success when targeting college-age, and younger working adults, but
underused venues such as Pinterest are ever growing and will not be left out of the discussion.
This paper wont provide a concrete plan as to how to interact with consumers, but is
designed to be a thoughtful presentation on todays online advertising environment.
A major goal of this paper is to examine the current business model and online
behavioral tracking and how to create a non-offensive and inviting online presence to attract
the target market. This paper will encourage companies and businesses to analyze social
media following and look critically at how to retain that following while also trying to
penetrate the market further. Finally this paper will look at the constant online activity of the
consumer and how consumer behavior is tracked through todays technology through smart
phones, tablets, and personal computers. Are these technologies hurting or helping businesses
advertise to consumers? Is the constant bombardment of social media advertising working?
Or are the constant stimuli annoying the consumer to the point of unfollowing, unfriending,
and/or blocking the business?

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Because they are so understandable, social media venues are a popular way for
companies to advertise. These advertisements are often connected with current events and are
universally accepted. Because of this, the entire mainstream market on social media is focused
on instead of just certain target markets. The pervasiveness of social media is affecting how
companies advertise, even on venues other than the Internet. An ad for a Chevy Silverado
reads, Not every friend is on Facebook showing a man with his dog in the bed of the truck.
Such ads aim to connect with all age groups and emphasize the importance of human
interaction (Elliot 2013). This ad is an example of how easily understood social media are to
the consumer and can be associated with a particular element for Chevy and General Motors.
The pervasive nature of todays mobile advertising recently has become even less
selective. When making selections on which target market, online advertisers are looking less
and less at the geographical information, and more at consumer behavior. JupiterResearch
looked at 27 online advertisers and found that 42 percent used some target marketing, but
only 23 percent used a combination of data such as geographic and demographic
information, (Pradnya 2007). So who is being targeted through social media and smart
phones? The answer is anyone and everyone and advertisers are looking at past purchasing
decisions as a predictor of future buying behavior.
Online advertisement spending is growing rapidly. In Thailand, social media
advertising expenditures are expected to increase 30 percent (Pornwasin 2013). This increase
is because of more time spent on the Internet by the consumers and the increasing number of
people using social media. Social networking sites are an effective way to build relationships
with consumers and many companies are now integrating it into their marketing plans. There
is a greater understanding of the consumer when using social media. When a company is

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constantly striving for a better relationship with the consumer, it learns more about the
characteristics and behavior of the consumer.
In traditional media advertising, businesses have used major media markets such as
New York, L.A., Chicago, San Francisco, and Dallas to market to the biggest and broadest
listenership and viewership. With the Internet and social media advertising boom, these types
of broad advertisements are peripheral in advertisers minds. The global marketplace is
available through social media advertisements and geographic absence doesnt limit
businesses anymore. Take for example Bad Boy Mowers. The classic American success story
starts in the small town of Batesville, Arkansas; population 10,248. Their first mower was
built in a garage and driven around an abandoned parking lot. Fast forward to 2015 and the
company is one of the leading manufacturers of zero turn mowers, and has a strong presence
on Facebook, Twitter, Google+, YouTube, Pinterest, and Instagram. They also have an active
email newsletter and an interactive website and blog. Because of their understanding of the
importance of social media advertising, the company has enjoyed immense success nationwide.
Seventy-four percent of small and medium businesses now use social media to
advertise or promote their businesses. Small businesses also spend an average of 21.4% of
their total media budgets on social, more than any other media platform. This is up from
18.9% last year (U.S. Official News 2014). Social media advertisings are user friendly and
connect the businesses to the customers inexpensively. Major social media sites such as
Facebook, Twitter and Instagram are essential to success, but could a narrow focus on these
popular venues limit a businesses reach? Are there emerging advertising venues that could be
beneficial for online advertising?

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Advertisers using Facebook can target fans of companies that liked the page by
advertising in the consumers individual news feed. The consumer sees the ads in the righthand column and in the log-out message and is also seen in the smart phone app. Facebook is
calling the ads compelling stories. In 2011 Facebooks ad sales grew 104 percent but could
grow even more if the 850 million mobile members are targeted (USA TODAY 2012). The
advertiser can do this easily without being physically present in the consumers geographic
area.
Facebook alone has 1.37 billion active monthly users and 874 million are mobile
users. On average a Facebook user is connected to 80 pages, groups, and events. Fifty-eight
percent of people have used some form of social media in their lifetime (Statistic Brain). A
recent study showed 80 percent of social media users prefer to connect with brands through
Facebook while a whopping 77 percent of business-to-consumer companies and 43 percent of
business-to-business companies acquired customers from Facebook. (Jorgensen 2012). There
is a tremendous number of people a company can use to their advantage if targeted correctly.
In the global market, social media give limitless opportunities to target whoever and wherever
a company desires.
With 160 million users and growing, Twitter has placed itself in the top tier of
advertisers minds when looking at social media ads. There are different options for
advertising on Twitter. Promoted accounts highlight specific companies to users and Twitter
will suggest that the user follow the company based on the users previous searches and
preferences. If a company purchased a promoted account, a companys ads would show up at
the very top of users search results if they searched for a related topic (Miller & Vega 2010).
Now promoted tweets are on individuals timelines, and not just in the search results. For

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instance users might open their Twitter app and scroll through their timeline to see an ad from
Nissan promoting an Altima. The ad blends well and looks like content published by fellow
users. Published ads are now on Twitters app and on the web site as well. Businesses bid on
certain keywords and are charged when someone clicks the link on the advertisement. For
example if a user searched fast food, one might see an ad for Taco Bell or McDonalds
along with an integrated social media platform that looks to get the consumer involved online.
Instagram, another one of the social media advertising giants uses API, or application
program interface. API allows companies and businesses to trade advertising instead of
purchasing ads through a sales rep. For example, a radio station might have the personality
use 30 seconds of air time to promote a restaurant if the restaurant agrees to cater one of their
event. This streamlines the process for the company or business by cutting down on time and
dollars spent all while being user friendly and technologically savvy (Dixie 2015). EMarketer
has predicted Instagrams advertising earnings to be around $595 million in 2015 and exceed
$2 billion in 2017. But how are the largely millennial users responding to the recent push in
advertising?
Recent Instagram advertisements have gotten thousands of likes and brands have
communicated great success in the new venture. Instagram also lets users hide posts they find
obtrusive and directly learns from that negative feedback (Dixie 2015). Has the mobile-only
social media venue figured out how to advertise without annoying consumers? Now the site is
looking into 30-second promotional videos exclusive to advertisers.
Pinterest, a visual discovery social media platform is used to find ideas for individuals
interests and projects. For example, a college-aged woman might save an image that contains
information attached in a link to her personal profile, or pin recipes for inexpensive

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crockpot meals and Pinterest will recommend similar posts for that person where she can
pin to her personal account to come back to later. Pinterest now has close to 47 million
users in the U.S. alone and introduces new products and ideas to its users. Ads for the site
look very similar to other content and target the consumer by the persons gender and topic he
or she is interested in based off previous behavior. Pinstitute, a class for advertisers will soon
be available to show businesses how to best tailor their ads for the interface (Isaac 2014).
Eventually the company hopes to offer online courses for smaller businesses.
Potential consumers and businesses, specifically in the B2B platform has been
booming since the creation of Facebook. Social media advertising in business-to-business
marketing was estimated to grow in 2011 to $4 billion. Burnout and a high click-through rate
is a serious issue for businesses on social media advertising. Many of these ads have problems
differentiating from one another in the consumers mind and advertisers have tried to defeat
this by creating Facebook pages where consumers can like or elect to receive certain
messages, the page and follow the product online (Schwartz 2011). However, the advertising
environment in social media venues is rapidly changing and businesses must be flexible and
able to evolve.
There is a need for a new business model that incorporates social media in a more
integrated, holistic way. Is there a way to stray from annoying and unethical practices to a
new business model that is inviting and non-offensive? Nielsens Global Trust in Advertising
survey showed that complete trust of advertising is extremely low among men and women.
Only 11 percent of men and 6 percent of women reported a complete trust in magazine ads.
According to Nielsens latest Trust In Advertising report, the most effective way to build a
feeling of reliability and faith in the consumers mind is by word-of-mouth, and branded

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websites (Nielsen 2013). Forty-eight percent of women and 42 percent of men reported to
never purchasing the product or interacting with the social media advertisements and the
numbers increase when compared to mobile phone text ads (MEDIAVATAAR 2014).
Consumer trust is uncomfortably low for mobile media advertising. So how does a company
successfully gain that trust back?
A companys online reputation is not built overnight but is something that must be
worked toward constantly. Integrity is essential in an ethical social media presence because
the virtual world of the World Wide Web has tangible real life significance, not only for
individuals but also for social movements, businesses, and brands. A company must stress the
importance of transparency, respect, and honesty that is needed to build trust online. Without
ethical online activity, there can be adverse effects in reality (Gulf News 2011).
Because of the specific advertising strategies currently in place with social media
communications, advertisers must have a holistic and complete understanding of
psychological characteristics in their target market. To have an effective presence, specifically
on Facebook, the business has to cater toward the consumers psychological characteristics
(Chu 2011). An integrated and connected media strategy would include a very custom
approach to consumers with personalized private messages that contain information on
products along with incentives for the consumer to pass it along on their individual page
without violating consumers private information.
The most substantial way advertisers violate consumers privacy is through cookies.
A cookie is a third party, small text file that stores information on a users hard drive based on
the users browser history. A cookie is basically the Webs version of memory. Take for
example a customer has a favorite restaurant. He walks in once and they instantly record who

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he is, what he orders and where he wants to sit so that the next time he comes in they can
predict his behavior to provide better customer service. If users dont want sites to track them
like this they can disable them and manually delete them. However many sites will prompt
users to enable cookies before they can go further onto the respective site. If disabled, the
users will need to register their accounts every time they visit a repeat site (Weise 2000). Now
there are programs users can purchase to manage Internet tracking and cookies that allow
users to be completely anonymous on the Web.
The Federal Trade Commission oversees the online advertising industry. In 2010 the
FTC introduced a proposal called Do Not Track, that would allow consumers to opt out of
allowing websites to track their online behavior and target tailored advertisements to the
consumer. Before this proposal, behavioral tracking was invisible to the consumer, an unable
to control (FTC 2010). The FTC recommended a browser-based mechanism rather than a
registry or list for the Web user to opt out whose interface for which would be simple and
easily navigated by the consumer. However, there are no legal requirements for its use and
advertisers may ignore the request at will. So where does that leave the consumer? Consumers
are constantly bombarded with obviously personalized ads that make them hyper aware of
their Internet activity and the fact that everything they look at is being tracked and they are
being categorized by their online behavior.
But how do companies use smart phones to outsmart consumers? Search term,
geographic location, device type, where on the page the ad appeared, what exactly was
clicked on when the advertiser was charged, date, day of the week and the time of day are all
included in the information companies are gathering to better target their consumers (Roe
2011).

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BlueKai, the industrys leading data management and audience targeting company
places consumers in over 30,000 different behavioral market segments. Recently, the
company has launched a real-time bidding platform where companies and businesses can send
discounts to consumers and also increase their product prices based on the consumers profile
and estimated spending power as they are making the purchase decision (Rosen 2012). For
example, if a mid-50s Caucasian male who has a lucrative job in a corporate office is
searching for a product, businesses can see that he has a high purchasing power and will raise
their prices based on his profile. So now the companies in real-time bidding have gained all
control over the marketplace with very little transparency for the consumer.
Mobile advertising and social media are booming. This exponential growth includes
smart phones but is not limited to tablets. Advertising through tablets has grown at a faster
rate than smart phones. Advertisers can tailor their ads to consumers through the use of tastes
that are expressed through past behavior and online activity. Products must constantly adapt to
emerging online environments by catering to the need for real-time communications.
The iPhone reformed the way companies advertise on social media. What once was
just pop-ups and banner ads has now morphed into interactive advertising that has an
entertainment value for the consumer. Using cell phone ads, Google has traditionally used
geographic locations to consumers what businesses are close to their relative location. Target
completely flipped the use of the cell phone advertising and gave coupons to consumers that
they can redeem in store by a simple download to their mobile device. When the coupon is
scanned, Target immediately receives a plethora of personal information about the consumer.
This data includes the consumers cell phone number, wireless provider, and the
date/time/type of product that the consumer purchases (Writer 2010). As the field of smart

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phone advertising grows, more and more of the consumers information will be collected that
on increases the invasive nature of modern advertising.
Constant access to Wi-Fi and the connectivity allowed through tablets gives people a
great opportunity to use their mobile devices for entertainment and information. A poll in
India showed 51 percent of consumers said they were fine with ads on their devices if they
were given free content on them (Upadhyay 2012). Tablet advertising will see $27 billion in
earnings by 2020 (India Banking News 2013). Now the issue for advertisers becomes
tailoring their current advertisements to the myriad of different technologies in an integrated
way that is consistent and personal.
What does the culmination of various social media venues, consumer behavior, online
tracking, and mobile device access mean for the future of the advertising world? How can the
industry create a new business model that integrates all these elements, without time-intensive
efforts? If businesses can create advertisements that personally cater to and individuals
consumer behavior, keep an integrated advertising plan, appeal to the short attention span of
the millennial generation, all while creating an unobtrusive and inviting interface to interact
with consumers, they will enjoy limitless success. Online advertising is evolving daily and
will continue to do so as different social media sites compete against one another, as new
venues emerge, and as others become irrelevant in the market. There is no reason a company
or business cannot be successful in the global market place with all the opportunities that the
Internet and social media advertising present and with the correct capabilities, there isnt a
single type of consumer the business cannot target.

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