• by Mark Walsh  @markfwal, February 9, 2009

A growing number of Web companies such as Facebook and Social Media Networks are trying to explode traditional banners by launching ad units that encourage friends to connect around brands.

The latest entrant in the social advertising category is Influencer Ads from PopularMedia--expandable display units that add basic social networking features to help drive viral promotions. The ads entice users to get friends to join them in contests or other marketing programs aided by features such as status updates and alerts.

"This is like a viral wrapper for whatever you can reasonably do to get people to interact with friends around your content," said Jim Calhoun, CEO of San Francisco-based PopularMedia, which makes social media marketing tools and formally unveiled the Influencer Ads Sunday at the iMedia Brand Summit. As with other types of social ads, the promise is that increased interaction will yield more high-quality leads and higher sales than typical banners.

Here's how the platform works: When someone clicks through on an Influencer Ad, they are prompted to invite friends to participate in a promotion. They can share offers via email, social networks like Facebook and MySpace and personal blogs or Web pages. Friends who respond have to complete a campaign-related action--watching a video, taking a survey, getting a subscription or buying a product--before being asked to invite others.

Along the way, users can check updates on their sign-ups and other information on a Web page that resembles a profile page. Advertisers, meanwhile, can track campaign activity through a dashboard and adjust creative elements on the fly based on PopularMedia's predictive analytics technology. "You can test different ways to get people sharing in large volumes," said Calhoun. Marketers also collect user data including opt-in email addresses and insights into which customers are the most influential.

Among the initial advertisers testing Influencer Ads is Dow Jones & Company, which is using the format to sell Wall Street Journal subscriptions. Pitched to existing subscribers, the campaign encourages them to raise their "social capital" by offering friends free 30-day trial subscriptions.

Online city guide Flavorpill, meanwhile, is using the platform to run its "Party Like an Art Star" contest that promises participants additional chances to win round-trip airfare to New York City to spend four nights at The Standard Hotel for a "Flavorpill-curated weekend for each friend that they get to register on Flavorpill.

Calhoun emphasized that Influencer Ads allow marketers to extend social advertising beyond the major social networks to any site. "These ads are not beholden to any ecosystem operated by Facebook or MySpace," he said. To that end, PopularMedia has partnered with meta ad network the Rubicon Project to supply inventory to advertisers from across the 350 ad networks it works with to place and optimize ads.

Influencer Ads are priced on a CPM basis, with Popular Media promising publishers that the social format will boost the value of their ad rates. "Publishers who sell nothing but clicks are soon to be toast," said Calhoun. "Revenue is evaporating, inventory is rising and people are spending more time connecting with people around them."

But the extent to which people want to incorporate brands into their conversations is still in question. A November study by technology research firm IDC that described social advertising as "stillborn" found that only 3% of U.S. Web users would allow publishers to use friends' contact information for advertising.