By Allison Leigh

With the recent announcements from SocialMedia regarding their new FriendRank advertising service, here at Editechial we have been stewing what effect this would have on the industry and what the user response would be.  In case you didn’t hear the announcement, here is how VentureBeat describes Seth Goldstein’s new service:

“The company (SocialMedia) scans data about your activities on Facebook and other social networks, infers who your best friends are, and ranks them. Then the company exploits that ranking to serve you relevant ads.  It does so with something it calls “social banners,” which insert references to your best friends within advertisements.  The idea is that showing you ads that reference your friends will attract your attention and thus make the ads perform better.”

This will most likely not infuriate users as much as Facebook’s failed Beacon service did last year, however it brings up a very disturbing trend in the social advertising marketplace.  Company’s have realized that traditional banners and text links are not enough to gain true user engagement.  And they are now attempting to leverage the relationship you have with your friends in order to produce awareness.  And even the “referral” mechanism would be fine, but what SocialMedia and its founder Seth Goldstein are offering does not gain user’s approval before integrating them into the ads, there is simply an opt out option.  So in essence your Facebook friends will be ‘pitching’ you advertisements until they realize it and remove themselves from the platform.

I liked what Alexander van Elsas said today in his blog post,

“Hey, it might even make advertisement a little more fun. But I cannot help but feel that these services are crossing the thin line from commercial success to commercial exploitation of friends relationships. And that is a balancing act that might easily create a backlash by those that do not want themselves or their friends exploited that way. And once trust is violated, the user may be gone. This is not just a danger for the advertiser. it is also a danger for the user and his friends. If one of my friends is “spamming” me with social advertisement, what does that say about the relationship we (thought we) have?  In that sense Friendrank isn’t the best of names when you relate it to your friends?”

And I have to agree, SocialMedia is on a slipperly slope, I personally belive they have a great company and offer a very important service (monetizing social applications), however the backlash from users could be very detrimental to their long term growth.