Earlier this week I wrote about how Forrester was recommending to their clients that they advertise on social networks because the cost is cheap, relative to other advertising opportunities. So it was pretty timely of BusinessWeek to have a article about how many users are spending less time on socal networking sites because they are annoyed with the ad deluge.
From the BusinessWeek article:
The MySpace generation may be getting annoyed with ads and a bit bored with profile pages. The average amount of time each user spends on social networking sites has fallen by 14% over the last four months, according to market researcher ComScore. MySpace, the largest social network, has slipped from a peak of 72 million users in October to 68.9 million in December, ComScore says. The total number of people on such sites is still increasing at an 11.5% rate, but that’s down sharply from past growth rates. “What you have with social networks is the most overhyped scenario in online advertising,” says Tim Vanderhook, CEO of Specific Media, which places ads for customers on a variety of Web sites.
Is advertising on social networks really over-hyped? Well I think that is a yes and no answer. Yes it is over-hyped. eMarketer expects advertising on social networking sites to jump 75% this year to $2.1 billion. But most companies do not know how to advertise on social networks. As Google co-founder Sergey Brin put it “I don’t think we have the killer, best way to advertise and monetize social networks yet.” Many companies approach social networks as if it was another display medium. Buy up ads and place them everywhere. This is the wrong approach as many of the people who hang out on MySpace, Facebook, and other sites pay little to no attention to the ads because they’re more interested in connecting with their friends.
Advertising can work on social networks if they interact with the audience instead of shouting at them via ads. I wrote last year about A Successful Facebook Marketing Campaign from Target. Instead of recycling one of its existing advertising campaigns for Facebook users, Target adjusted its message to the audience and was interested in conversing with the audience.
What social networks have to be careful of, is that in their rush to make money they bring in advertisers who don’t know how social networks work. As a result the campaigns alienate social networking users, and don’t perform for advertisers. If you do this enough, then users stop coming to the social networking sites and advertisers will stop advertising. The BusinessWeek article suggests that the first point is already happening. Will the second?
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