Consequently, companies like Facebook and MySpace have concluded that an ad format for social networks had to be developed, which is how the concept of social ads came about. In theory, social ads attempt to interact with social-network members by, for example, having them answer a poll question about their product. The member's response is then broadcast to the member's peers in the form of an ad. The idea is that ads that engage members and that have been endorsed in some way by a friend are more likely to resonate in the context of a social-networking site.

"The combination of improved targeting of ads with social ad content and social response mechanisms is potentially transformative for online advertising. However, a high degree of transparency and control needs to be given to individuals on social sites given that this entire capability rests on the data they have explicitly provided to the social site," the IAB Social Advertising Best Practices reads.

To increase the likelihood that members will agree to let advertisers use their personas to hawk their wares, social-networking sites must explicitly state how their social ads use members' data and make participation an opt-in process.

In addition, for members who agree to being in social ads, marketers must show these people a preview of the ad and let them select to whom within their circle of contacts the ad will be distributed. Then members must be asked for their final approval to release the ad, according to the IAB.