The internet is one of the newest communication technologies and has run through fundamental technological progress during the last years. During the end of the 1990's many internet firms
were established whose investors expected high revenues. However many of these platforms could not meet the expectations, the stock prices of many firms declined rapidly and many firms filed for bankruptcy. Since 2004 the internet developed to the Web 2.0 which suggests that a better version
of the web exists today.
Spendings in online advertisements were interestingly not effected by the crash of the internet market at the beginning of the 21st century. Since 1998 the net advertising revenues have increased constantly. In 2008 US-American companies will spend more for internet advertisements than for
TV commercials. In the past, famous Web 2.0 websites were sold for high prices: the Holtzbrinck publishing group bought StudiVZ for around 85 million euros, the video website Youtube was sold
to Google for 1.65 billion dollars and News Corporation paid 580 million dollars for Myspace.
However all of these social networks still have to supply evidence that their company value is not overestimated. As far as the advertisement revenues are concerned none of them generate significant profits yet.
In this paper I will analyze the performance of advertisements on Web 2.0 websites as exemplified by social networks. First I will trace the developments that led to the so-called Web 2.0 and define their characteristics. Then I will focus on social networks, analyze their features and the possibilities
to use them for advertisement purposes. Finally I will analyze several possibilities to advertise on Web 2.0 websites.
Table of Contents
1 Introduction
2 What is Web 2.0?
2.1 Necessary Developments For Web 2.0
2.1.1 The Transfer Rate
2.1.2 The Access Fees
2.1.3 The Changes Of User Habits
2.1.4 The Browser War
2.2 The Core Competencies Of Web 2.0 Companies
3 The Advertisement In Social Networks
3.1 Social Networks
3.1.1 Features Of Social Network Websites
3.2 The Status Quo
3.2.1 The Performance Of Advertisements
3.3 Framing on Social Network Websites
3.3.1 Branded Communities
3.3.2 Advertisements Designed By Users
3.3.3 Development Of Applications
3.3.4 Spread Viral Multimedia Content
3.3.5 Advertisements In Videos
4 Conclusion
Objectives and Topics
This paper examines the effectiveness of advertising on Web 2.0 platforms, specifically focusing on social networks. It explores why traditional banner advertisements often fail and investigates alternative, more engaging marketing strategies compatible with the Web 2.0 paradigm.
- Evolution of Web 2.0 technologies and user habits
- Core competencies and business models of Web 2.0 companies
- Analysis of advertising performance and user reactance in social networks
- Evaluation of alternative marketing approaches like branded communities and viral content
Excerpt from the Book
3.3.1 Branded Communities
A very obvious way to interact with users of a social network website is to become part of the social network by creating a profile page and a branded community of your firm. Mohammed et al define a community as ”a set of interwoven relationships, built upon shared interests, that satisfies individual needs that would otherwise be unattainable“.
A relationship implies a higher degree of commitment and intensity between individuals than interactions which involve communication at a very basic level. ”Relationships imply trust — a key ingredient of successful community — whereas interactions do not.“ These relationships have to be interwoven. That means, to take the example of a branded community, that there has to be interaction between the customers and the firm and the customers have to interact with each other. A community satisfies members’ needs that are unattainable individually. A community of runners could for example gather the members’ experiences with different training schemes and thereby provide information for an individual he would not have access to otherwise.
Basically brand communities are expanded users’ profiles on which consumers and the firm and the consumers can interact with each other. A brand community can create cost and revenue benefits for a firm. If a brand community has a discussion board on which consumers give technical support to other consumers a firm could reduce its customer service costs. Furthermore a community with a large membership base can be effective for word-of-mouth promotion or members can give educated input regarding beneficial or harmful product changes. Therefore a brand community can lower marketing costs. Revenue benefits rise when a firm analyzes the member’s profiles to better segment the customers and understand an individual’s needs. Moreover ”creating value within an online community builds trust and ultimately deepens customer relationships between the firm and the consumer.“ Studies have shown that profits can be increased by 25 to 95 percent when the customer retention rate is increased by 5 percent. So an online community that deepens customer relationships can be very profitable.
Chapter Summary
1 Introduction: Provides an overview of the internet's development, the emergence of Web 2.0, and sets the scope for analyzing advertisement performance in social networks.
2 What is Web 2.0?: Traces the technological and behavioral milestones—such as increased transfer rates and changing user trust—that shaped the Web 2.0 landscape.
3 The Advertisement In Social Networks: Investigates current advertising formats, the concept of banner blindness, and potential marketing strategies like branded communities and video ads.
4 Conclusion: Summarizes the findings, suggesting that while traditional ads underperform due to user engagement, branded communities and video-integrated advertisements offer more promising alternatives.
Keywords
Web 2.0, Social Networks, Online Advertising, Banner Blindness, Branded Communities, Viral Marketing, User Engagement, Consumer Behavior, Framing, Digital Marketing, Customer Retention, Network Effects, Internet Advertising, Social Software, Marketing Strategy.
Frequently Asked Questions
What is the primary focus of this paper?
The paper examines how advertisements perform on Web 2.0 websites, using social networks as the primary case study to evaluate effectiveness and limitations.
What are the main thematic areas covered?
The study covers the evolution of the internet towards Web 2.0, the definition of core competencies in these firms, and an analysis of specific advertising methods within social environments.
What is the central research objective?
The goal is to understand why traditional advertising often fails in social network environments and to identify more effective ways to reach highly engaged users.
Which scientific methodology is applied?
The author analyzes current digital marketing trends, benchmarks them against theoretical models of online community building, and evaluates industry-standard data on click-through rates.
What does the main part of the work address?
The main section details the technical requirements for Web 2.0, compares social networks like Facebook and StudiVZ, and explores strategies such as branded communities, user-designed ads, and viral content.
Which keywords characterize this study?
Key terms include Web 2.0, Social Networks, Banner Blindness, Branded Communities, and Viral Marketing.
How does the phenomenon of "Banner Blindness" affect advertisement?
It suggests that users are so engaged with website content that they subconsciously filter out elements resembling advertisements, significantly lowering click-through rates.
Is "Framing" considered a viable solution for social networks?
The author argues that while framing can work in other contexts, it is problematic in social networks because the user-generated content is confidential, making targeted framing feel intrusive.
What is the author's stance on Branded Communities?
The author believes they can be profitable, provided they foster genuine, two-way communication rather than just broadcasting content to users.
- Arbeit zitieren
- Matthias Lehmann (Autor:in), 2008, Advertisement on Web 2.0 Websites as exemplified by Social Networks, München, GRIN Verlag, https://www.grin.com/document/140299
