Social networking meets old media: Maybe the ad model can work

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*Synergistic* BINGO!

That has to be one of my all-time favorite MBA words.

I work at a large interactive ad agency and over the last several weeks we've been planning out a fairly sizable online marketing plan/budget. Social networking's prominence in the overall plan? About 25%. A very respectable number on the surface. But that's just a generalized number for our anticipated emphasis. Social networking's share of the bottom-line raw dollars and media budget? About 5%.

Nobody has been able to find the secret formula for effectively scaling social network advertising on a mass scale. And I'm not sure anyone will. And from an advertiser's (or a user's) standpoint, that's not really a bad thing. The only people it's 'bad' for are the site's owners. The tech world is looking for the next big success story like Google. But the key to Google's financial success was that its primary ad model was COMPLETELY different and scaled like nothing we've ever seen before.

The whole point of social networking is a more direct one-to-one (or at least one-to-relatively few) interaction. It's currently not the ideal channel for broader mass media (one-to-many) interactions. To be sure, major brands can take a carpetbombing approach to try and reach customers in a less-targeted way on the periphery. But that's the exception to the rule and in an era where advertisers can easily track a campaign's efficiency they're not going to overpay for poor performance.

The medium's true strength from a marketing standpoint is as a PR and HIGHLY-targeted/segmented marketing vehicle. Neither of these are mega $$$ revenue generators for site owners though. With a large enough audience, it can be lucrative for sure. But it's not going to lead to the kind of ad revenue levels we see from companies like Google or Yahoo.

One thing major players like an AOL/Yahoo/Google/Microsoft can bring to the table though is incorporating these users within their existing behavioral targeting platforms. So they can cross-pollinate information and promote something like a trip to Vegas to a user on Bebo based on their activity on AOL properties. But that's just the next evolutionary step and tighter integration, not a monetizing game-changer.

Social networking's no longer in its infancy phase. With all the bright minds and technology we have, we would have seen the next 'big idea' from a monetization standpoint by now. I think a lot of people are looking for something massive that's simply not going to happen.

Posted by: RustyShackleford   Posted on: 03/14/08 You are currently: a Guest | Members login | Terms of Use

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