Web Content/Social Networking

When considering the Web and social networking sites, a distinction can be drawn between professionally (corporate) produced content and user generated content. Recently, however, the lines between these two types of content and the platforms on which they are hosted are being blurred. Take a look at YouTube, for example. Professionally produced content, such as the Dove Real Beauty ads, is being posted by users. It is no longer exclusively the corporations who are sharing their content. In addition, this content is mixed in with user generated content, such as lonelygirl16’s video blog. This co-mingling of content demonstrates that the corporate sphere has collided with the amateur sphere and this has been made possible by new media technology.

The collision between corporate and individual power may spell trouble for corporations. BusinessWeek states that the user generated content available on the Web means that traditional news and media sources are no longer the gatekeepers of content. The article quotes Michael Arrington, chairman of edgeio.com and founder of techcrunch.com, as saying, “Power is shifting toward the individual, operating at the edge of the network and away from the giant companies at the center of the network…It’s a paradigm shift for everyone on the Internet.” So it seems that traditional media corporations are losing their power over what content is distributed and through which channels. If they expect to maintain their power they will have to change their methods and adapt to the new media environment.

Internet companies and new media corporations, such as Google, Yahoo, MySpace, and Facebook, are leading the way in exercising corporate power in this new environment. They are laying the foundation on which traditional corporations can become involved in the online world and extend their power. What is this foundation? Advertising. The business model for companies such as Google and Yahoo revolves around advertising. The business model for social networking sites such as MySpace and Facebook also revolves around advertising. Advertising means money and money means control. Corporations may have lost their influence on content, but social networking sites show that they will retain their financial control and power.

Advertisers, such as Interpublic Group, are the first major group of corporations to realize that they can use the fact that “user-generated content is exploding in popularity, as technology puts more power into the hands of individuals and communities” (BusinessWeek) to their advantage. Facebook and MySpace are leveraging their communities of users to advertisers in return for ad-based revenue. Facebook not only has advertisements on the sidebars of its pages, but it also features branded applications. Users can “sell” or recommend corporate products to their friends. This capitalizes on the community aspect of social networking sites so that advertising appears to be more word-of-mouth. Many corporations have pages on Facebook and MySpace. They are infiltrating these online communities in order to sell their products and establish a young, cool brand identity.

So why does this matter? We are familiar with corporate power in traditional media – why is corporate influence in new media a cause for concern? The primary reason that it is a cause for concern is that many people are unaware of the corporate influences in their social networks. They see the online environment as a place where they are able to dictate the content and choose the media that they are consuming. People’s barriers are down and they fail to realize the extent to which corporations affect their online behavior, such as directing traffic flow to certain websites. The second reason that corporate power is significant online is that there are new privacy issues inherent in online advertising. Corporations that pay to advertise on social networking and other websites will have unprecedented access to your preferences, your location, and your online activity (WireTap Magazine). Corporate power over content may be waning, but corporate power backed by advertising and revenue generation is alive and well.

Gamers

Video games have long been a bastion for the male 18-34 year old group. It is no wonder that large corporations with significant cash reserves have begun to advertise within the games themselves. In 2005, video game advertising was $56 million, a figure that is expected to grow to between $732 million and $1.8 billion by 2010. Many companies see video games as a less expensive alternative to other forms of advertising such as television or print ads. Furthermore, many in the 18-34 year old group are shying away from television (viewership was down 7% last year) and becoming more involved in video games giving advertisers a more direct route to their purchasing power.

Video game advertising has gone through many evolutions from ads such as static billboards in sports games to full interaction with products that can be updated live through the internet. This dynamic form of interaction has taken off in the past few years. Features developed by game coders allow companies to buy advertisements even after games have been released due to features of the code which allow for continuous updates of the ads. This is particularly useful for movie or product release ads which can be incorporated right into the game. Examples of these dynamic ads can be changing billboards in sports games, car brands in racing games, actual home products you can use in slower first person games, or voice ads than can be even be recorded and replayed within the game. Furthermore, the amount of information that advertisers can obtain from these ads within games is staggering. In previous game advertisements, little more than the amount of games sold would be known. Now, advertisers can tell who has viewed their ads at what angle, how long they looked at it, if they interacted with it, and demographic criteria that is relayed back from the game developers.

With all the features of modern day video game advertising it is no surprise that companies such as Microsoft have signed large deals with game advertisers. Microsoft recently signed a two year deal with video game creator EA for a variety of product placement ads within their video games. Second Life too is being seen as a massive platform for advertisements. Starwood hotels recently created a hotel called “aloft” within the game baring its name that users can stay in. Other companies such as Lego’s, Toyota and Pizza Hut are entering the Second Life advertisement space. Such large product placement deals can only be obtained with significant resources. This is something many smaller businesses do not have. While this is how modern day capitalism functions, it nonetheless blocks out access to smaller companies and lower their sales, while increasing the sales of already large companies such as Microsoft.

Not all response has been positive however. In a recent game released by EA called BattleField 2142, it stated in its manual that certain amounts of advertising data would be retrieved from gamers playing habits. A backlash ensued in which gamers were posting on forums stating that the game was “spyware”. This has hurt sales of the game. Perhaps companies are becoming a little too intrusive in their attempts at product placement. The idea of a company constantly gathering data on you in an attempt to sell you more stuff is a little disconcerting. Furthermore, it all seems to be the Fortune 100 companies with the resources to manipulate things like this. It makes you wonder if there should be more regulation in this field to protect our privacy.

http://www.1up.com/do/newsStory?cId=3154522

http://www.economist.com/business/displaystory.cfm?story_id=9304254

http://www.shacknews.com/onearticle.x/51825