The Disconnect Between Advertisers and Social Networks

This year more than 44% of Internet users will visit a social network at least once per month, according to eMarketer. But social network advertising represents just 5% of overall online ad dollars.

Many ad agencies point to a November 2008 JPMorgan survey that showed that 78% of online social networkers were there to keep in touch with friends as one reason why social networks get so few advertising dollars. 

But does online advertising have to all about demand fulfillment? Can sites like Facebook help with demand generation? The answer is yes according to Ian Schafer, CEO and founder of ad agency Deep Focus. 

“Social networking is not just about the display advertising, it’s about the other things that you can do with it,” he said. “For example, if my audience is active on Facebook, I want to be sure that I am making it very easy for someone to share whatever content they’re creating or consuming with all their friends.”

Debra Aho Williamson, senior analyst at eMarketer went on to say:

 “Social networks are where consumers feel comfortable expressing their feelings—good or bad—about companies, products and services. Marketers, retailers and social networks have an opportunity to tap into this stream of information-sharing.”

I think that this is where advertisers can be successful on Facebook, especially at the local level. Successful advertising is still right message at the right time to the right user. But some of the tools being tested on the social networks offer the ability to deliver ads that are both relevant to the user and encourages them to start thinking about (latent demand) products or services that they are not actively looking for.

For those companies willing to put more than 5cents of every advertising dollar towards social networks, the return could be impressive, especially when compared to traditional print or display advertising.