On-line Brand Advertising using Social Networks based on User-generated Content

Different from most sponsored search advertising and click-driven display advertising, on-line brand advertising is less straightforward to assess, and perhaps for that reason has received much less attention in the academic literature and in practice. Brand advertising generally is difficult to assess; however, the online environment provides unique opportunities, because as we describe below certain brand actions become visible and measurable on-line. Furthermore, brand advertising has a huge opportunity for growth. Even though the vast majority of on-line ads are display ads, sponsored search advertising is responsible for the majority of advertising revenue (and profits). Well-designed brand advertising may be much more appropriate for visits to nytimes.com or myspace.com, since the user has not come for the purpose of clicking on a returned link. Improving brand advertising on-line may also have a substantial impact on social welfare: the access to a large amount of free content on-line is due largely to sponsorship by advertising. ComScore [comScore 2008] recently reported a clear correlation between seeing brand advertising and increasing purchases, both on-line and off-line, and well into the future (beyond the reach of current viewthrough conversion measurement technology).