Surprise, Surprise, Social Networking Ads Suck
from the as-expected dept
One of the questions that came up last week in Edinburgh was whether or not social networking sites were really the big moneymakers they claimed to be. In the discussion, what we agreed on, was that the social networking sites had done a good job in doing an "upfront" monetization, with MySpace getting a guaranteed ad deal from Google and Facebook getting a guaranteed deal from Microsoft. However, all the details suggested that on the backend things were pretty ugly. It's not hard to figure out why. Ads work on Google because people are looking for information. They do a search, and if the advertisement shows information that helps with the query, that makes everyone happy. However, when it comes to a social network, usage is quite different. People aren't looking for information about products -- they're looking to communicate with friends. In that environment, ads are seen as an intrusion -- which is the exact opposite of ads in a search world. That explains why Facebook was so focused on its Beacon offering, which was designed to try (rather unsuccessfully so far) to make an advertisement about communicating with your friends.
With all that said, I estimated that within a year, advertisers would begin to back away from social network advertising, unless some new, more effective, mechanism was found. I figured it would take about a year, because the mindset of advertisers would still be focused on just getting ads on these "hot properties" and it would take some time before they realized that no one looked at the ads. Apparently, my estimate was wrong. Brands are already staying away. At least, that was a major point behind Google missing its earnings estimates. It seems unlikely that this situation will get much better, unless social networks really do come up with a different form of advertising. They need to recognize that simply throwing up ads doesn't work any more. An advertisement can't be intrusive. It can't be annoying. It needs to be relevant and wanted.
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Stealth Marketing Time! by Bake on Jan 31st, 2008 @ 6:57pm
So...get users to passively "champion" a company/product to their "friends". Basically if you had to pick one to have an account it wouldn't be hard - everybody's a fan of one company or another on this big globe of ours...
Tada! Problem solved, synergy achieved!
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Myspace has an interesting form of advertismets by Vincent on Jan 31st, 2008 @ 6:59pm
Myspace have a lot of the advertisement profiles. As I am typing this, there is one for zune that even tom posted a bulletin about. Often these special profiles add special features to your own profile, such as the zune profile offers a zune skin to your myspace music player.
It was a simple idea, but it works. I have learned about 300 and Cloverfield through these myspace advertisements, and I went to watch both movies.
However I do suspect the real money in running myspace is in the user statics.
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With all those teenage boys.... by Bob on Jan 31st, 2008 @ 7:10pm
you'd think the "P*E*N*I*S* Enlargment ads would skyrocket and make someone a millionaire :)
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Anothe reason by Josh on Jan 31st, 2008 @ 7:45pm
I think another reason social networking ads don't work too well is the ad placement. Advertisers are bit wary: they don't want their ads next to questionable "user-generated" material, like someone's naked pictures or racist comments or whatnot. Also, you can't base your ads on user content either. Someone's profile might mention they want to date men, but maybe only as a joke. It's hard to sort out genuine content from crap people put out there.
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Huge numbers of pages, low rates per thousand. by Scott Rafer on Jan 31st, 2008 @ 8:07pm
Ads on social nets are simply a different beast. Search ads and affiliate programs work elsewhere. Everyone is unreasonably expecting "new and sexy" to be the same as "high eCPMs." Google spoiled us all and mis-set our expectations.
http://www.techcrunch.com/2008/01/31/how-much-is-a-facebook-ad-worth-lookery-guar antees-drum-roll-125-cent-cpms/
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What's your nitch? by Aaron on Jan 31st, 2008 @ 8:54pm
Hey guys, what if the social networking site were more of a 'nitch' market instead of a blanket social site like myspace or facebook?
In other words, lets say the social networking site were specifically for movie fanatics, and just ran ad's according to that nitch...do you think the ad's would be more welcomed and successful?
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by darkbhudda on Jan 31st, 2008 @ 9:42pm
Facebook likes to stick giant condom ads on their site for us Aussie users anyway. At work I can't block the ads so having a giant penis on my screen makes it an unviewable site during work hours.
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Ever Heard of TV? by Marc Cohen on Feb 1st, 2008 @ 5:36am
Mike -
If an "advertisement can't be intrusive" and "needs to be relevant and wanted", how do you explain commercial television?
Marc Cohen
Check out the Ad-Supported Music Central blog:
http://ad-supported-music.blogspot.com/
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@Marc Cohen by Anonymous Coward on Feb 1st, 2008 @ 7:11am
TV ads are dying, too, particularly with the rise of DVR devices. In the old days, commercials were when you got up and left the room to get a sandwich. Now, you just fast-forward through the ads. Mostly because they're intrusive, irrelevant, and unwanted.
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business application by facebookster on Feb 29th, 2008 @ 2:27am
Facebookster - We can provide a full range of facebook application strategy, design, development and marketing for your business. Facebookster
Visit now: http://www.facebookster.com"
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Boy, did I get that one wrong... by EffectiveIM on Mar 6th, 2008 @ 12:44am
You miss the point totally. At least "business application" above me, in all his brilliant marketing subtlety, gets it. What if you are selling a product or service (for yourself or someone else) that makes you $1-5K a conversion. (And before you say what product or service - think financial products, trading, foreign exchange, insurance, health industry... ...try to bid on keywords related to those industries now on Adwords - you'll be paying $20+ a click for spots 1-3. Here you have a platform to target ANY geographical area of your choice, peoples interests or sex and you get absolutely FREE branding at 30c a click! You reckon that "sucks"? That my friend is a marketers wet dream. Here are some ACTUAL statistics from a Facebook ad: Cost Per Lead: $25 1: 20 Leads per Conversion 1 Conversion = $5,000 The only problem with social networking ads is that real marketers still haven't gotten onto them yet. But they will. And when they do - watch out. Spending on Facebook and other social networking ads is just going to get bigger. And as social network sites continue to grow exponentionally (traffic wise, popularity) and it becomes more and more difficult to get any sort of meanigful traffic from Google or ROI (SEO or PPC methods) - social media marketing is going to get even bigger.
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Re: Boy, did I get that one wrong... by Sunny on Mar 6th, 2008 @ 3:02am
Hey effective, made a very valid point, sounds quite interesting!!! do you mean doing untargetted advertising on sns because to me the biggest concern perhaps not on facebook but most other sns is the correctness of user profiles. However if we look at the ways to monetization of SNS, they are a plenty.
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by EffectiveIM on Mar 6th, 2008 @ 4:09pm
I wouldn't be too concerned in correctness of user profiles on social networking sites. Google has been getting away with this for years using their content network and what they say is "contextually targeted". If you do a placement-targeted Report to see where your ads are showing on Google Adwords content network, you'll soon see lots of rubbish sites running your ads.
Don't worry too much about being "targeted" either. People are USED TO ADS. They are not going to click on them (in Facebook) unless they really WANT to see the message.
That is the point. If they WANT to see the ad - how is that untargeted?
You only pay for clicks. You get Free branding and you get to target using available demographic profiling. I'd say that's targeted!
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