It is no secret that social networks are dominating in the online space. People are spending countless hours interacting with sites that offer a social experience, driving millions of visits, page views, ad impressions, and ample traffic every month. And audiences are doing more than just visiting and reading – they are engaging with these pages on a record level – making these sites an advertiser’s dream. As a result of this, social networks are changing the game when it comes to traditional digital advertising. Here are two of the ways we are seeing social media impact online advertising:

1. Price/Pricing model – A recent analysis by ComScore shows that last year social networking sites have drawn an average CPM of 56 cents, which is drastically less than the $2.43 average of the Internet at large. Their sheer dominance in terms of impressions and their ability to reach a defined audience is allowing them to charge a lower CPM by as much as 18%.

In addition to having a lower CPM, social networks also provide an ample amount of inventory. Facebook and MySpace alone account for over 20% of display advertising volume across the web. However, due to their cost per click pricing model, they bring in less than 5% of the total money made from online advertising. This model, although sometimes less lucrative to the site, is attractive to advertisers, who only have to pay when someone takes action on their ad. And sites like Facebook and Myspace can afford to offer pricing models like this due to their vast number of pages and advertising opportunities.

2. Email Content Strategy - Advertisers also have the opportunity to gain eyeballs on social networks without ever making an ad buy. Besides employing their own social media strategy, marketers can modify their email campaign to create content that is likely to be shared. A recent “Global Perspectives’’ survey indicated that consumers are willing to act as brand advocates and connect email content to their social web. According to the study 54% of consumers worldwide would share offers and promotions from email on their social networks, 42% would share news on new products, and 32% should share helpful information such as tutorials and product support. This means that advertisers need to start adjusting their e-blast strategy and thinking about creating content in their email campaigns that people would find “shareable.” This is an opportunity to use a traditional digital advertising vehicle (email) to reach an even larger audience and drive brand advocacy, product education, and word of mouth.

These are only two of the ways that social networks are impacting digital advertising. Are you adjusting your online strategies to take these into account?