Social Influence in Social Advertising: Evidence from Field Experiments

TL;DR

This paper presents large-scale field experiments demonstrating that social cues, especially from strong peer ties, significantly enhance ad responses such as clicks and connections, informing better ad targeting and design strategies.

Contribution

It provides empirical evidence on how social cues and tie strength influence consumer responses to social advertising, highlighting the importance of social signals in ad effectiveness.

Findings

Social cues increase ad responses in a dose-dependent manner.

Strong peer ties lead to greater influence on ad effectiveness.

Minimal social cues significantly improve ad performance.

Abstract

Social advertising uses information about consumers' peers, including peer affiliations with a brand, product, organization, etc., to target ads and contextualize their display. This approach can increase ad efficacy for two main reasons: peers' affiliations reflect unobserved consumer characteristics, which are correlated along the social network; and the inclusion of social cues (i.e., peers' association with a brand) alongside ads affect responses via social influence processes. For these reasons, responses may be increased when multiple social signals are presented with ads, and when ads are affiliated with peers who are strong, rather than weak, ties. We conduct two very large field experiments that identify the effect of social cues on consumer responses to ads, measured in terms of ad clicks and the formation of connections with the advertised entity. In the first experiment, we randomize the number of social cues present in word-of-mouth advertising, and measure how responses increase as a function of the number of cues. The second experiment examines the effect of augmenting traditional ad units with a minimal social cue (i.e., displaying a peer's affiliation below an ad in light grey text). On average, this cue causes significant increases in ad performance. Using a measurement of tie strength based on the total amount of communication between subjects and their peers, we show that these influence effects are greatest for strong ties. Our work has implications for ad optimization, user interface design, and central questions in social science research.