Blogging website Tumblr first launched ad products on May 29, 2012. Rather than relying on simple banner ads, Tumblr requires advertisers to create a Tumblr blog so the content of those blogs can be featured on the site. In one year, four native ad formats were created on web and mobile, and had more than 100 brands advertising on Tumblr with 500 cumulative sponsored posts.
Since social media marketing first came to be, strategists and markets have been getting smarter and more careful with the way they go about collecting information and distributing advertisements. With the presence of data collecting companies, there is no longer a need to target specific audiences. This can be seen as a large ethical gray area. For many users, this is a breach of privacy, but there are no laws that prevent these companies from using the information provided on their websites. Companies like Equifax, Inc., TransUnion Corp, and LexisNexis Group thrive on collecting and sharing personal information of social media users. In 2012, Facebook purchased information from 70 million households from a third party company called Datalogix. Facebook later revealed that they purchased the information in order to create a more efficient advertising service.
Another ethical controversy associated with search marketing has been the issue of trademark infringement. The debate as to whether third parties should have the right to bid on their competitors' brand names has been underway for years. In 2009 Google changed their policy, which formerly prohibited these tactics, allowing 3rd parties to bid on branded terms as long as their landing page in fact provides information on the trademarked term. Though the policy has been changed this continues to be a source of heated debate.
On April 24, 2012 many started to see that Google has started to penalize companies that are buying links for the purpose of passing off the rank. The Google Update was called Penguin. Since then, there have been several different Penguin/Panda updates rolled out by Google. SEM has, however, nothing to do with link buying and focuses on organic SEO and PPC management. As of October 20, 2014 Google has released three official revisions of their Penguin Update.
Paid inclusion is a search engine marketing method in itself, but also a tool of search engine optimization, since experts and firms can test out different approaches to improving ranking and see the results often within a couple of days, instead of waiting weeks or months. Knowledge gained this way can be used to optimize other web pages, without paying the search engine company.
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With the development of this system, the price is growing under the high level of competition. Many advertisers prefer to expand their activities, including increasing search engines and adding more keywords. The more advertisers are willing to pay for clicks, the higher the ranking for advertising, which leads to higher traffic. PPC comes at a cost. The higher position is likely to cost $5 for a given keyword, and $4.50 for a third location. A third advertiser earns 10% less than the top advertiser, while reducing traffic by 50%. The investors must consider their return on investment and then determine whether the increase in traffic is worth the increase.
Social media can be a useful source of market information and a way to hear customer perspectives. Blogs, content communities, and forums are platforms where individuals share their reviews and recommendations of brands, products, and services. Businesses are able to tap and analyze the customer voices and feedback generated in social media for marketing purposes; in this sense the social media is a relatively inexpensive source of market intelligence which can be used by marketers and managers to track and respond to consumer-identified problems and detect market opportunities. For example, the Internet erupted with videos and pictures of iPhone 6 "bend test" which showed that the coveted phone could be bent by hand pressure. The so-called "bend gate" controversy created confusion amongst customers who had waited months for the launch of the latest rendition of the iPhone. However, Apple promptly issued a statement saying that the problem was extremely rare and that the company had taken several steps to make the mobile device's case stronger and robust. Unlike traditional market research methods such as surveys, focus groups, and data mining which are time-consuming and costly, and which take weeks or even months to analyze, marketers can use social media to obtain 'live' or "real time" information about consumer behavior and viewpoints on a company's brand or products. This can be useful in the highly dynamic, competitive, fast-paced and global marketplace of the 2010s.