More than half of the young people surveyed welcome brands' involvement on social networks, in contrast to industry opinion that users of sites such as Facebook either do not accept or notice ads.
Surprisingly, the research found that 52% of the users surveyed have sought out a video ad on YouTube and have actively visited a brand's website for a purpose other than purchasing a product or service. Tuned In said that users were happy to interact with brands online in return for entertaining content and useful tools.
Some 55% of respondents welcomed brands' involvement in social networks and 31% were members of a group connected to a brand or product.
On top of this, 21% have used a branded widget such as TripAdvisor's 'Where I've Been' Facebook application, while 22% have sent a branded, virtual gift to a friend, lover or relative.
The research found that people in this age group are spending an average of 19 hours a week online and that the internet is fast becoming their primary source of entertainment. For example, BBC iPlayer and Channel 4's 4oD have shifted a considerable amount of TV viewing online, with 40% claiming to watch TV programmes via the internet at least once a week. Heading to YouTube for a fix of entertainment is even more popular, with 56% going to the site at least once a week and 21% visiting every day.
It is social media, however, that dominates online activity, with, on average, 45% of all time online spent on social networks. For 47% of 16-30s, their profile page is their first port of call when they go online.
The research findings also suggested that young people do not welcome intrusive pop-up ads, but 62% welcome online advertising targeted to their interests.
Web users are communicating with one another about brands as well as spreading brands' messages, with two-thirds having posted a comment or review about a brand or product online and a third having emailed a viral ad.
Douglass Dunn, co-founder and managing director of Tuned In, said: 'The internet has taken the importance of word-of-mouth to the next level, with consumers basing more and more of their purchase decisions on information gathered from their peers. In this age, brands must accept that a degree of control is out of their hands and must try to steer positive conversations through offering real value.'
However, separate new research from Hall & Partners for its 'Big Digital Experiment', covering 23,000 UK and US consumers, found that digital has not moved advertising on as far as expected. The vast majority of ads tested opted for the very traditional strategies of promotion and persuasion, with only 14% harnessing digital to involve the consumer.
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