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The Rapid Rise of Social Advertising

Posted by Vanessa Naylon on August 21st, 2012 at 10:00 am

You knew instinctively that the breakout popularity of social networks meant that ads were close behind. Advertisers go where the crowds are. But even those of you who have been following social for years might be surprised at how quickly social advertising has grown and flourished.

Some social networks, like MySpace, Facebook, and YouTube, had advertising built-in virtually at the time they launched. Some, like Twitter, resisted the pull to monetize and moved slowly (their progress led by other players like 140 Proof). Others, like Google+, still haven't plugged in the advertising machine. 

Social Ads: a Timeline of Events

September 2003: MYSPACE LAUNCHES.   MySpace reached the 1 million user mark within a month of its official launch. It was founded by employees from eUniverse, a marketing company. Basic display ads followed soon after launch.
February 2004: FACEBOOK LAUNCHES.  Ads were an early addition to the platform, without real targeting or quality to speak of. As Facebook's user base grew, so did advertising demand. Facebook didn't really turn on the revenue firehose until COO Cheryl Sandberg joined in 2007.
August 2007: YOUTUBE LAUNCHES VIDEO OVERLAY ADS.     YouTube chose to try out banners over its videos first, asserting that users wouldn't like pre-roll media. YouTube later added pre-roll videos in 2010.
November 2007: FACEBOOK LAUNCHES ADS POWERED BY BEACON. Facebook had integrated Microsoft's adCenter banners in 2006, but Beacon was Facebook's first major attempt at building social features into its advertising. Beacon aimed to bring users' browsing data from other sites into Facebook to improve ad targeting. However, the program attracted such a volume of user backlash that Facebook ultimately revised its social ad strategy.
February 2008: GOOGLE LAUNCHES ADSENSE for YOUTUBE.  The only social platform to give content producers a cut of ad revenue, Google integrated its popular AdSense program into YouTube to incentivize video publishers to stick around. 
August 2008: FACEBOOK TESTS "ENGAGEMENT ADVERTISING."  In the great debate between the open platforms and the walled gardens, Facebook has always preferred to keep its users within Facebook. That's why it began testing Engagement Ads, which offered advertisers anything but a click for their calls to action. Comments, virtual gifts, and likes were the first calls to action tested, with event RSVPs and other formats soon to follow. 
January 2010: 140 PROOF LAUNCHES TARGETED SOCIAL ADVERTISING 140 Proof was the first interest graph based social ad platform, with sharing built-in to every ad. It initially started with a self-serve advertising platform and then pivoted its offering to focus on the needs of big brands.
February 2010: 140 PROOF LAUNCHES  ADVERTISING A.P.I.   Developers of social apps great and small began plugging into 140 Proof's social ads API, which uses interest graph data to match social users with brand messages that are relevant for them.
March 2010: TWITTER CEO EV WILLIAMS DELAYS AD LAUNCH @ SXSW. Most pundits had their fingers crossed before SXSW that @ev would announce Twitter's long-awaited ad strategy in his keynote interview. But millions of watchers were disappointed when, instead of an ad platform, Ev announced Twitter's so-called “at platform”, which sought to bring Twitter functionality to more users. (It had nothing to do with ads.)
April 2010: 140 PROOF LAUNCHES SHAREABLE ADS.  Social means connections. Why shouldn't a social ad be social? 140 Proof's ads launched sharing + retweet-ability in 2010 for Twitter and Facebook-powered apps. How often do people share relevant recommendations and content? A lot, it turns out.
July 2010: FORD REVEALS THE NEW EXPLORER EXCLUSIVELY ON FACEBOOK.   Ford was one of the first big brands to invest heavily in social, and it showed in 2010 when they eschewed all traditional channels and turned to Facebook as the exclusive medium for their big reveal of the new 2011 Ford Explorer.
December 2010: TWITTER FINALLY LAUNCHES UNTARGETED ADS.  After a long period of PR and limited testing, Twitter eventually coaxed a few customers into trying its ad product, roughly one year after other players in the social ecosystem had started monetizing Twitter streams with paid media.
January 2011: FACEBOOK LAUNCHES SPONSORED STORIES.   Considered by the press to be version 2 of the ill-fated Beacon, Sponsored Stories feature user photos in each ad, which Facebook claims brings a 60% boost in performance.
May 2011: 140 PROOF LAUNCHES VIDEO ADS IN SOCIAL.     Boosted by the widespread popularity of video and huge user activity around live televised events like the Super Bowl, 140 Proof began offering video ads to brand advertisers who wanted to extend their TV and pre-roll campaigns to social. 
June 2011: GOOGLE LAUNCHES GOOGLE+      Google+ is Google's fourth attempt at a social network (after Orkut, Wave, and Buzz). Intent on getting the experience right, Google+ didn't have ads at launch — and it still doesn't. Though none of us really expects the world's biggest online ad company to hold off on Google+ ads forever.
May 2012: G.M. PULLS ITS AD SPEND FROM FACEBOOK.     Just days before the Facebook IPO, the press discovered that GM was pulling its entire Facebook ad spend — about $10 million. While some opined that GM was just trying to get a better deal out of Facebook, the scars still haven't fully healed. In spite of the GM pullout, Facebook is on track for another billion dollar year in social ads.
July 2012: FOURSQUARE LAUNCHES PROMOTED UPDATES.     Three years after launch, Foursquare brings paid placement to its user feeds in the Explore tab with Promoted Updates, brand recommendations based on user searches.

What was your favorite moment in the rise of social advertising? Did we miss any big achievements, milestones, or missteps? Let us know in the comments.

One Response to “The Rapid Rise of Social Advertising”

  1. Davin Green says:

    This would be great to see as a timeline. Especially if you could tie in trends in ROI for different social networks.

    Great reference, though!

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