London, June 19 : With social networking websites like Facebook or MySpace becoming a rage in cyberspace, advertisers have got new avenues for targeting consumers, according to US researchers.
And if one is popular on these sites, he will be the first in the chain of potential shoppers for products offered through advertisements, reports New Scientist.
By using economic models advertisers have developed new tactics to exploit the personal information that online social-networking sites provide. And making use of this information, advertisers will use the most influential profiles to get people to pay more for products.
Jason Hartline, at Northwestern University, Illinois, US, said that under the most effective strategy, free or cut-price products will be offered to the most influential online individuals to kickstart new fads.
While there are many targeted advertising schemes exist on social networks, like Facebook's Beacon system, which can tell your friends when you buy products on other websites.
However, Hartline claim that their approach is a little smarter as their computer model is based on the assumption that people value a product more each time one of their friends buys the same item and this effects lasts for long as more friends join the trend.
Having access to the network of people's data would allow the advertisers to exploit this effect, which Hartline terms as an "influence-and-exploit" strategy. Here, firstly, the company would give away free or heavily discounted products to a select few individuals with the most influence.
Later, the same product will be offered to their friends at increasing, carefully calculated prices to track a product's growing appeal. This would maximise a company's possible income at every step.
Hartline said that social networking sites carry all the information that may be required by advertisers to carry out such a strategy.
"An online service provider's biggest asset is the data they have about their users. It's how Google is making money hand-over-fist and that's also true of social network services," suggested Hartline.
While he thinks that judging if online "friends" really influence one another is difficult, but at the same time it can be possible to distinguish false from true friends. This can be done by looking at the communication patterns between them, or whether they share mutual friends.
Angela Sasse at the Human Centred Systems lab, University College London, UK aid that this influence-and-exploit tactic may find favour with some users excited at the prospect of being commercially rewarded for their popularity. But there are many people who have become sick of marketing or have other concerns.
"The vast majority of individuals are not aware of how much of their information is being stored, and when they do become aware, they object to it," she said.
While Hartline said that privacy is important, but maintains that market influences will reject bad behaviour.
"Any company would receive a lot of bad press if it did something that wasn't a legitimate, value-adding service. I'm sure there will be some that use data in inappropriate ways, but hopefully they won't survive," he said.
A paper on the new marketing strategies was presented at the 2008 World Wide Web conference in Beijing, China.