Social Networks have been quoted as the potential melting pots for advertising but the recent approaches have not exactly paid off. FaceBook, the popular social networking site had tried a strategy at advertising that most of its users found to be too intrusive. But the approach being tried by a firm called bSocial may finally throw some light on how to approach product promotion in the social networking space.
An excerpt from LA Times:
The program, called Market Lodge, revolves around the notion that consumers are more likely to buy merchandise or services recommended by someone they know and trust.
Market Lodge, made by a startup called bSocial Networks Inc., will pay Facebook members a 10 percent commission on all sales made on their recommendations.
Beacon had failed to take off because it was tracking users interactions, which was perceived by many as a blatant invasion on their privacy. But using the whole strength of social networks implies making the whole promotion act advantageous to the user as well.
The Market Lodge program allows users to maintain online stores where they can choose to recommend several products. The online promotion method may pay off more than the pure advertising mechanism.
Online products such as social networks are valued more for their scale of memberships. However, in recent times there were worries that social networks may not be the best medium for advertising. This had led to much speculation that social networks were valued too highly as well (Consider FaceBook’s value being set at $15 billion, from the price that Microsoft paid for a stake in the social network).
Now however, it does seem that innovative products developed on the social networks as a platform could leverage the community power for furthering the marketing of products. And that would mean good advertising potential for social networks.