Given the well-chronicled struggles of Facebook and MySpace to monetize their massive audiences, Valleywag ponders, “Why can't Facebook and MySpace make more money?”
Part of the problem is the ad agencies themselves. Simply put, the big spends agencies like to make for the clients on TV go too far on social media.
Here is an excerpt:
With $100 million, Smiths said, he could purchase and track 1,500 TV ad spots for a client. Spend a tenth of that much on a social media site, and suddenly, "There's a huge wave of data we're not prepared to deal with." That overflow of information is one reason advertising on social media requires "more resources" from agencies.
More work to spend less of the client's money? That doesn't appeal to agencies.
Putting aside the conundrum for agencies (which is totally valid), I think the larger issue is that the current advertising model is ass-backwards relative to what will work in social nets.
Bottom line: you can not PUSH ads at this audience. What you need to do is give them reasons and contextually clear paths to engage with a brand and its products/services.
Whether that means giving consumers the tools to pick the types of products/services they want on their pages, incenting them to place them on their pages (or share with friends), giving them clear action paths to GRAB BROCHURE, GET COUPON or REQUEST INFO or other methods, it is more of an opt-in, or consumer PULL, type of model than a push based one.
Until that model starts to take hold, lots of confusion, waste-age of eyeballs and fiscal pain lie ahead.
Related Links:
- Twitter-nomics: envisioning structured tweets.
- Advertising 3.0: on Madison Avenue and social media marketing.
- Channel Me and the Rules of New Media: old media versus new media rules and how they shape branding.
- The Programmable Fan Site: a new media/ad unit model.
