Social Advertising

In social advertising, ads are targeted based on underlying social networks and their content is tailored with information that pertains to the social relationship. This paper explores the effectiveness of social advertising using data from field tests of different ads on Facebook. We find evidence that social advertising is effective, and that this efficacy seems to stem mainly from the ability of targeting based on social networks to uncover similarly responsive consumers. However, social advertising is less effective if the advertiser explicitly states they are trying to promote social influence in the text of their ad. This suggests that advertisers must avoid being overt in their attempts to exploit social networks in their advertising. ∗Catherine Tucker is Associate Professor of Marketing at MIT Sloan School of Management, Cambridge, MA. and Faculty Research Fellow at the NBER. Thank-you to Google for financial support and to an anonymous non-profit for their cooperation. Thank-you to Jon Baker, Ann Kronrod, Preston Mcafee, and seminar participants at the George Mason University Roundtable on the Law and Economics of Internet Search, the University of Rochester, UCLA and Wharton for valuable comments. All errors are my own.