Tuesday, August 26, 2008

Local Motors and Web 2.0 (Part II of the Series) – “What is the problem with Advertising in a Social Network”?

Last night, I arrived at the meta-conclusion that selling advertising might be a good way to monetize the value locked in a social network.

Let’s look at that in a deeper way.

Put yourself in the position of someone on a social network where you are talking to a friend. (roll dream sequence music…..)

Your profile (songs to listen to, pictures of you, pictures you like, groups you belong to, friends that you follow, updates on friends with whom you’ve connected, etc., etc.) dominate the screen before you even open a live chat session with your friend on line. You are in your element and you are connecting, networking, living…then all of a sudden an ad for a golf shop in Phoenix, AZ steals a huge portion of real estate in your screen profile and some voice over interrupts your chat session. How do you feel?

The ads get in the way.

How strange. But,

Think of a magazine.

You read an article.

(turn a page)

You are fed an ad.

(turn a page)

You look at pictures

(turn a page)

You are fed an ad.

Somehow, when you are not responsible for selecting content on a click by click basis, you can countenance the ads

Not so on a social network….

You log on

You interact

You log off

When I make you wait to watch an ad…..it just feels more intrusive. Ever log onto the Forbes magazine website… Try it now. How badly do you want to get past the intro ad? What about watching a web video on a major news website like CNN of Fox, you want the video you clicked, NOW, (just like on YouTube) and not some unannounced ad first.


Has the Social Networking Industry subtly uncovered the diaphanous veil that advertisers have hid behind in TV and magazines? Now that control is in the hands of the user so much more, I don’t think that we want to be fed an ad if we didn’t ask for it.


Ooops, not sure that Google expected that when they paid MySpace $900MM in 2006 to buy ad-words in order to serve targeted ads. Perhaps that is why they were disappointed with the results from that purchase.

Again, this is not to say that all internet ads don’t work, but the example is meant to illuminate a trend that popping up an ad in front of someone on a Social Network is a tougher and tougher intrusion to navigate.

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