Pricing Banner Advertisements in an Online Social Network

27 Pages Posted: 15 Jun 2009

Date Written: June 12, 2009

Abstract

This paper examines the impact of social capital on advertisement prices in an online social network. Specifically, I show that a widely-employed measure of social capital - network constraint - explains variation in prices of 846 banner advertisements appearing within a social network formed by 89 'Liberal' and 84 'Conservative' weblogs. As predicted, weblogs that bridge 'structural holes' between otherwise disconnected segments of the network command significantly higher prices for their advertisements.

Keywords: online advertising, social network analysis, social capital, social networking, weblogs, social media

JEL Classification: O30, O39

Suggested Citation

Hunter, Starling David, Pricing Banner Advertisements in an Online Social Network (June 12, 2009). Available at SSRN: https://ssrn.com/abstract=1418625 or http://dx.doi.org/10.2139/ssrn.1418625

Starling David Hunter (Contact Author)

Carnegie Mellon University ( email )

5032 Forbes Ave.
Qatar Office SMC 1070
Pittsburgh, PA 15289
United States

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