Advertisers Love Social Networking, Apparently, So Where's The Money?

from the invisibility dept

There's a flurry of activity around social-networking sites as they try to figure out how to make some money, and it's matched by advertisers that don't want to miss out on the next big thing. But they're casting a cautious eye over the sites, with much of that concern put down to worries that their ads will be displayed alongside objectionable user-created content, or that they'll get caught up in the blame game surrounding the sites' supposed dangers to children. Some sites like MySpace are trying to figure out way to offer advertisers a "safer" experience, but it's worth wondering if their reticence isn't solely based on fears about the content, but rather also if the ad space is actually worthwhile. Despite their huge amounts of traffic, the ad rates social-networking sites charge are reported to be very low, perhaps an indication of the results they deliver. If they delivered high clickthroughs and conversion rates, would advertisers be so concerned? So as the bubble-esque hype surrounding these sites carries on, it remains murky just how they'll turn their massive traffic into massive revenues.

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  1. identicon
    I, for one, 12 Jul 2006 @ 2:52pm

    Re: advertisers dont want

    kantankerus writes

    "advertisers dont want

    a] intelligent consumers
    b] people with a life"

    That's quite spot on in fact. There's a fundamental clash of psychological values going on in this marriage, the kind of minds who engage in social networking are exactly the kind of people advertisers should avoid. Unfortunately they just see any crowd of people gathered in a group and they get an instant hard-on.

    Social networking is a p2p model, by definition. The fact that people happen to congregate on a server like MySpace or whatever is entirely accidental to the phenomena, they could just as easily move somewhere else next week.

    What keeps them coming back to use that particular server? Well the fact that it is "My Space" - and not , say, Pepsi Colas space?

    That's the nub of it really. Advertising is anathema in this mindset.

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