Advertising, as we know it, needs to evolve. The next generation of Web surfers deploy popup blockers, banner blockers, and seem to have a complete disconnect when it comes to traditional forms of advertising.

The next evolution of advertising is social network advertising. There are numerous forms of social advertising from targeted banners and deals, to members displaying product recommendations with buy now links, to adding cookies into a user?s system that track their actions across a Web site?s communities listing every subject they are interested in and serving them advertising based on their likes. These can all be considered passive forms of advertising. Active forms include setting up a company account on some place like Facebook or MySpace and actively engaging the community to participate.

In passive advertising, the goal is to get clicks and then get conversions. With active advertising the goal is to build a relationship with your potential customers and community and get people to advertise your products and services of their own accord.

The core of social advertising depends on building a level of trust between business and the customer. This trust then allows interaction between the two, in one form or another, to build a personal relationship. Once a personal relationship is established, the customer buys the product. If the customer is happy with the product, they then recommend the product within their network and the cycle starts over again with more customers.

The Good
If the product turns out to be everything the company says it is, it will be disseminate throughout the customer?s network rapidly. Many users of social networks also participate on forums, chat rooms, and the like. Gaining a fanatical customer base gives the company product evangelists who descend on these discussion groups amass. What started as a simple ad campaign, can quickly take hold of an active user base thereby making your campaign viral. Those who dare question the product get ridiculed in a way that would make the average user of Digg blush. At least that is what all the reading material says.

The Bad
Unfortunately, social network advertising is a double-edged sword. If the customer hates the product and believes that the company hoodwinked them, then all hell will break loose. Pretty much take what was said under The Good and throw it in reverse. Instead of recommendations the purveyor of social greatness tells their friends to shun the company and to tell everyone they know about how evil, manipulative, and horrid that company is. Those who speak up about how much they like a product get pummeled with accusations of being an affiliate of said company in disguise. The money spent on the ads not only yields very few customers, but launching a Web driven smear campaign.

The Ugly
eMarketer (www.eMarketer.com an e-business and online marketing research firm) released a study on the potential advertising dollars that will be spent on social networks. It estimated that worldwide spending could reach $2.5 billion by 2010 and $1.8 billion in the US alone. That is a ton of potential competition. As mentioned earlier, social network ads range from simple flyers currently being sold on Facebook to more intrusive ad banners that are set to a Web surfer?s tastes. The former is targeted based on what categories a user joined while the latter goes through a user?s personal profile and scans for the user?s interests. Some social network sites are also looking at ways of searching a user?s browser history and using the sites they previously visited as a means of finding out what the user is looking for.

What many privacy groups consider a gross breach of privacy and net etiquette could be the new rule. The major question many are pondering now is what rights does the user have when it comes to their personal information. While some are now offering opt out clauses, others, like MySpace, are holding their users? information hostage for the ability to make more ad dollars.

Tomorrow we will continue on the 8 Rules of Social Marketing.