The volume of advertising in MySpace and other social networks is expected to balloon in the next few years, and much of it could blur the lines between socializing, entertainment and marketing.
Kids are especially at risk, critics say, because as a thriving group on social networks, many younger teens are not sophisticated enough to treat with skepticism this new, seductive form of advertising. For example, marketers behind movie characters like "Superman" and products like Wendy's hamburgers pose as potential "friends" for kids to network with on MySpace.
For some consumer advocates, it begs the question: How will kids adapt and cope? And do social networks need to establish clear lines between commercial ads and members' editorial, just as search engines were forced years ago to demarcate their sponsored links?
"There are special problems regarding ads in social networks. It can easily be deceptive because kids think they're interacting with an ordinary person, but they're really interacting with a shill," said Gary Ruskin, executive director of the consumer advocacy group Commercial Alert, which prompted the Federal Trade Commission to urge disclosure of ads in search results in 2002.
A report issued last week estimates that U.S. advertising in social networks like MySpace will leap to $1.8 billion in four years, up more than 500 percent from $280 million in 2006. MySpace, one of the most trafficked sites online, with membership approaching 100 million, will command the lion's share of that revenue, in the range of $180 million this year, according to a report from research firm eMarketer.
Much of the spending will go toward profile creation and sponsorship pages for marketers in MySpace, according to eMarketer. MySpace also sells banner ads and sponsored search results from Yahoo.
What's more, on many traditional Web sites, ads are typically set off from editorial and clearly labeled. But in social networks, ads and marketing pitches can come in any form, without a label. Even stickier on MySpace, it can be difficult to tell a genuine member from a marketer.
"In the world of social networking, there's very little demarcation between anything and that leaves room for confusion for advertisers to intermix their messages," said Larry Magid, who runs Blogsafety.com.
MySpace is full of viral marketing campaigns in the form of profile pages; and according to eMarketer, MySpace has built hundreds of profiles for partners so far.
For example, Wendy's has a profile page for a character named "Smart," a 28-year-old male from New York whose interests include Angelina Jolie, hip-hop music, movies and Wendy's Bacon Mushroom Melt. In the character's "about me" section, it says, "it takes flair to be square. Do a square burger at Wendy's and do what tastes right!" Smart has more than 80,000 friends.
Burger King's page on MySpace, which features a commercial character called The King, goes one step further, offering "king's gifts" of free downloads of Fox shows like "24" and "American Dad."
A summer movie called "John Tucker Must Die" has a member profile for the film's lead character, a fictional high-school kid whose exploits with girls get him into trouble, along with profiles for several other characters. The fictional John Tucker on MySpace has more than 100,000 "friends," including many links to 14-year-old girls calling him "sexy" with promises to see his movie.
Proctor & Gamble also hosts a member page for the female vocalist Rihanna, who is promoting Secret body spray and her music tour.
MySpace does not have rules about labeling advertisements as advertisements, according to a company representative, nor do any of these example profiles identify themselves as ads.
MySpace does limit the types of media it accepts. For example, in June, it announced that it would not target age-inappropriate advertisements, such as sexual-oriented ads, to kids. (MySpace also requires members to be at least 14-years-old.)
"We work with advertisers to ensure their brand presence--whether through profiles or otherwise--is found on the areas of the site most interesting for that particular brand or product," said a MySpace representative. Its advertisers include Cingular, Pepsi, Coca Cola, Unilever, Disney, Sony Pictures, Fox, Toyota, Honda and Victoria’s Secret.
Where's the risk?
MySpace's age minimum is 14, but about 21 percent of MySpace population was 17 or younger as of May, according to ComScore Media Media data. That percentage shrunk slightly from 2005, as the population of MySpace nearly doubled.
Most American teens perceive the presence of bands, celebrities and comics on MySpace not as marketing, but as an opportunity for friendship, according to Renee Hobbs, director of the media education lab at Temple University, in Philadelphia. Teens' response to these marketing messages is linked developmentally, she said, because they are at an age where they are using relationships to develop a sense of identity.
"So that's very exploitable for marketers," she said.
What media experts fear now is that interactive games and viral marketing in social networks could carry an even deeper, lasting effect on kids.
"Because the blending of entertainment and marketing goals is so thoroughly blurry, it's even hard as adults to sort them out," said Hobbs.
"That blurring deepens kids' emotional identification with brands, especially for adolescents." At puberty, kids’ identities in our consumer culture are tied up with what they have, what they possess, what they like, she added. “When you layer entertainment values on that, people's emotional attachment to brands is stronger."
Certainly, advertising has a history of packing a punch with animated characters, music or peer influence. Many members of Generation X, a demographic born in the late '60s and early '70s, could easily recite decades-old brand messages like Life Cereal's "He likes it! Hey, Mikey!"
But interactivity adds something to the ad mix. Elizabeth Moore, associate professor of marketing at the University of Notre Dame, said one of the issues with interactive marketing is that there is very little research on how it affects kids and teens. What researchers do know is that for children under 13, such advertising can be more harmful because they often don't have the critical thinking skills to untangle the play from the marketing. Kids age 13 and older are cognitively capable of knowing what they're looking at, but Moore said, when you embed a message with entertainment, it can be hard to disentangle.
"Because we so know little about how kids are responding, it's hard to know what the rules should be," said Moore.
This month, the nonprofit Kaiser Family Foundation released a study taking the first look at food marketing to children through online videos and so-called advergaming, which are games centered around products. According to the study, 38 percent of food Web sites, such as M&M's, encourage kids to buy products by requiring a purchase code to enter a game, for example. And only 18 percent of the sites include disclosures that clearly explain they are advertising.
Moore, author of the report, said she plans to research the effects on children.
Consumer advocates like Commercial Alert say "buzz marketing" like the ads appearing on social networking sites can be deceptive, intrusive and involve commercializing relationships. Last year, Commercial Alert asked the FTC to investigate buzz marketing on the Internet and other media.
A representative for the FTC said that as a policy it does not disclose its investigations, but it has not given any formal response to Commercial Alert's request yet. The representative did say that the agency's advertising rules apply the same way to any media, and those rules are designed to ensure ads are truthful and not misleading, nor causing harm to consumers.
Media literacy experts say parents need to be aware of advertising tactics online and try to educate their kids about ads. Posing questions to kids like, "Who is behind this game, video or message, and what is their motive?"
"We need to work harder to recognize the new strategies used to reach into their psyches," said Hobbs.