Digital technologies have completed revolutionized consumers’ experiences with brands allowing interaction, personalization and engagement. The number of social media users and the daily time spend on social media platforms, make social media an attractive channel not only for the promotion of products and services, but also for assisting consumers throughout the decision-making process. Social media platforms offer unique opportunities for advertising. Using social media platforms firms, brands and advertisers attempt to move consumers from a stage of awareness to a stage of developing long-lasting relationships. This chapter focuses on social media advertising and e-commerce. The chapter starts with an examination of the impact of social media platforms on e-commerce by focusing on how social media influences consumers’ behaviors. Then it explores the different forms of social media advertising, followed by the specific social media platforms and the advertising options on each platform. Apart from opportunities, social media advertising creates challenges that need to be resolved. After the examination of the challenges, the chapter continues with an analysis of tools for the measurement of the effectiveness of social media advertising. The chapter ends with a discussion of future trends in social media advertising and e-commerce, followed by an overview of the key points discussed in the chapter.