This paper examines how Facebook has fundamentally changed the advertising landscape by enabling companies to communicate with consumers in more precise, personal, and social ways. Drawing on scholarship by Shih, Kirkpatrick, and Hovland and Wolburg, the paper traces Facebook's explosive growth, its role in reducing advertising information overload through social filtering, and its introduction of hypertargeting based on users' demographic and psychographic self-disclosure. The paper argues that Facebook has ushered in a consumer-driven marketing era in which ads are designed to reach the individuals most likely to respond to them.
Facebook has over 123 million users (Hovland & Wolburg 76). Moreover, nearly 70 percent of adults online use social media, especially individuals in their 20s (76). Media sites such as Facebook are an important part of today's society. When consumers are asked what media means to them, they typically answer that it provides information and entertainment (76). Individuals are no doubt getting something from the phenomenon of Facebook.
The total time spent on social networks grew a remarkable 63 percent in 2008 around the world, but Facebook was in a completely different league (Kirkpatrick 274). "It outdistanced every other service Nielsen measured. Time spent on Facebook had increased 566 percent in a year, to 20.5 billion minutes" (274). Facebook is not only being used for networking with "friends," however. These days, traditional advertising is becoming an antiquated concept. Social networking on Facebook is becoming the most relevant way for companies to communicate with their consumers, which at the same time extends their reach and their impact.
Companies now use and need Facebook to help them become relevant to their customers. Companies can use Facebook to increase their brand presence by sharing information about their company, posting pictures, and uploading videos — all ways that companies can create excitement about who they are and what they do (Shih xi). For many people who advertise using Facebook, it does not feel like traditional advertising because the content is coming from friends (81).
The Internet has caused an information overload when it comes to advertising. It is often quite difficult for companies to differentiate their advertising messages because of this, and potential customers therefore find it difficult to locate what they are looking for. Facebook addresses this through "social filtering" (Shih 81).
Social networks are emerging as a powerful and sophisticated new kind of marketing channel. Marketing is becoming precise, personal, and social: social networking sites are giving marketers new abilities to hypertarget campaigns using profile information, engage community members by tapping into social capital within friend groups, and systematically cultivate word-of-mouth marketing across their existing customer base (Shih 81–82).
"Using personal data to deliver precisely targeted ads"
"Facebook's broader impact on consumer society"
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