Social Advertising represents ad formats that engage the social context of the user viewing the ad. Whereas in traditional, non-social, advertising the ad is targeted based on what it knows about the individual person or the individual page, in social advertising the ad is targeted based on what it knows about the individual user's social network.
Social Advertising is the first form of advertising that systematically leverages historically "offline" dynamics, such as peer-pressure, friend recommendations, and other forms of social influence.
Facebook, (2007) defines social ads as the following: “Social actions are powerful because they act as trusted referrals and reinforce the fact that people influence people,” said Zuckerberg. “It’s no longer just about messages that are broadcasted out by companies, but increasingly about information that is shared between friends. So we set out to use these social actions to build a new kind of ad system.”
Facebook’s ad system serves Social Ads that combine social actions from your friends – such as a purchase of a product or review of a restaurant – with an advertiser’s message. This enables advertisers to deliver more tailored and relevant ads to Facebook users that now include information from their friends so they can make more informed decisions. No personally identifiable information is shared with an advertiser in creating a Social Ad.
Facebook, although the most talked about social networking site recently, is not the only one around. In fact, myspace has more registered users. Orkut dominate Brazil and India. Others include Bebo, Friendster, Hi5. World maps color co-ordinated by social network preference can be seen here: Social Networking World Map
The fact that advertisers are looking to reach out to many social networks at once means that they often look to Ad Networks to deliver ads across these networks through custom applications. The current market leader in this industry is AdParlor They have found a way to maximize value for advertisers across social networks.
Some other definitions are contextual advertising, or interactive ads.
The key factor that enables Social Ads are independent applications within social networks - now when open known as open social networks or open social platforms.