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Social media user posts will become ads

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Los Angeles Times
SAN FRANCISCO -- Candice Kilpatrick couldn't help but laugh when she came across a novelty item on a latex horse's head with a bushy mane.
Knowing her friends would get a kick out of the mask too, she shared the link on Facebook.
Soon her friends began seeing an update from Kilpatrick on their Facebook pages that appeared as if Kilpatrick was encouraging them to buy the mask: "Good news everyone. These are 40 percent off today."
But Kilpatrick had not posted it. Facebook had turned the link into a personal endorsement called a "sponsored story" paid for by Amazon.
"I was at the top of all of my 900-plus friends' Facebook feeds for several weeks promoting this horse mask," said Kilpatrick, a digital strategist from New York. "I am not comfortable with it."
Like it or not, Kilpatrick and her friends will have to get used to it.
Any time someone "likes" or links to a product on Facebook, there's a chance Facebook will put that person's name and face in an ad endorsing the product.
More of these ads are flooding the Web as companies look to exploit what has long been so effective in the offline world: a personal recommendation from a friend.
Already when users click Google's "(plus) 1" button, that endorsement can appear in an ad.
Google has announced that it also plans to expand the program next month and turn reviews, ratings and comments from users ages 18 and older into endorsements.
So if a user gives a Maroon 5 song five stars in the Google Play store or comments on the crunchy crust at that new pizza joint on Google Plus, the glowing review may find its way into an ad that the user's friends see across the Web.
It's part of the uneasy deal that consumers strike with social networks. In return for a free service, Facebook, Google and other companies collect reams of data from users for targeted advertising.
Social endorsement ads are one way these companies are boosting sales.
"What companies like Facebook and Google recognize is that the power of the personal recommendation is really huge," EMarketer analyst Debra Aho Williamson said.
Web companies say the ads are more relevant and less annoying than some other more traditional forms of online advertising such as banner ads.
A survey conducted earlier this year by Nielsen found that 84 percent of Internet users around the world trust recommendations from people they know.
After seeing a friend "like" a product on social media, 29 percent of U.S. Internet users check out the product, 14 percent visit the product's website, 11 percent visit the product's social media page and 5 percent "like" the product, according to research from Adobe Systems.
But many advertisers aren't completely sold on these endorsement ads - and with good reason, said Woodrow Hartzog, a professor at Samford University's Cumberland School of Law in Birmingham, Ala.
Too often a "like" or a "(plus) 1" is taken out of context. People "like" or "(plus) 1" products for different reasons. Many people do so to enter contests or get a coupon or other goodies.
"That action doesn't necessarily mean 'I approve this product,' " Hartzog said. "It can mean a lot of different things."
Massachusetts Institute of Technology marketing professor Catherine Tucker says Google's new approach - turning reviews and ratings into endorsements - will be a more meaningful personal endorsement than "low involvement" actions such as clicking a "(plus) 1" or "like" button.
Still, many users say they don't think it's fair that their name and likeness are being used without their consent or compensation.
"They are making me (into) a product they sell," said Los Angeles marketing strategist Stephanie Piche, who opted out of Google's "shared endorsements" program. "Do I like it? No."
Bloggers who get paid to endorse products and actors whose livelihood is their name and likeness are some of those complaining the loudest. They don't see why the proceeds from these ads are lining the coffers of Facebook and Google, not their own pockets.
"It could potentially hurt my income," said Lise Dominique, a voice-over actor from Chicago.
The effort to influence shoppers' habits through word of mouth dates to the 1940s when the U.S. government began shipping meat to Europe and the Pacific to feed troops fighting in World War II.
Government officials were worried the war effort would deplete supplies of meat, so they tried to figure out how to get Americans to radically change their dining habits and begin eating organ meats.
Kurt Lewin, a prominent social psychologist, discovered that encouraging women to have conversations with one another about less popular cuts of meat influenced their decision to serve their families liver, brain, tongue and tripe.
Marketers soon seized on word of mouth. Tupperware, for instance, grew into a household name by getting people to hawk goods to friends, family and co-workers at parties.
Jonah Berger, author of "Contagious: Why Things Catch On" and a marketing professor at the Wharton School at the University of Pennsylvania, says people trust friends more than they trust ads. Word of mouth tends to be 10 times more effective than traditional advertising, he said.
"We know that when friends endorse something, it's likely they mean it," Berger said.
Only 7 percent of word of mouth is online; most still occurs face to face, Berger said. But "technology is definitely changing the way word of mouth occurs today."
Facebook was a pioneer in social endorsements. In 2007, it launched ads that notified friends what users were buying on websites. It retreated from the program after mass protests, but its embrace of ads touting recommendations from friends did not weaken.
Now when a user likes a brand's page, his or her name can be used in ads seen by friends.
That hasn't always proved popular. Facebook had to pay out $20 million to settle a class-action lawsuit over sponsored stories that alleged the company had been unfair and deceptive in appropriating users' names and pictures for commercial purposes without their consent, violating California law.
In August, Facebook tried to impose a new privacy policy that would have given the company the right to run social ads without explicit consent from users. Privacy groups complained to the Federal Trade Commission. The agency opened an inquiry, and the policy is on hold.
The announcement that Google will now expand its use of endorsement ads isn't sitting well with some users who say they expected these kinds of ads from Facebook, but not from the search giant.
Even though Google is letting users opt out of the ads, a few are protesting by switching their profile pictures to images of the company's executive chairman, Eric Schmidt.
They say they have come to distrust these endorsements from friends the way they have come to discount celebrity endorsements.
"It's one thing to click something and say I like it, and it's another thing to use that information and run an ad as if I were promoting that. To me, that's not authentic. And that's the part that bothers me," said Jamie Dunham, a brand strategist from Nashville, Tenn.
Monica Olberg, a stay-at-home mom from Detroit, is split on the ads.
Sponsored stories have been a "godsend" for her Facebook page that answers questions from first-time moms, she said. She estimates that ads that pop up in friends' News Feeds with a personal recommendation are three to four times more effective than a regular ad on Facebook.
But she's opting out of Google "shared endorsements" ads and she's very cautious about what she likes on Facebook.
"I know I am being kind of hypocritical," Olberg said. "I want to advertise to people's friends, but I don't want people advertising to my friends."
Story tags » GoogleAmazonSocial media



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