Ethan Zuckerman is questioning whether advertising can support a social network media model in the long-run.
Zuckerman writes at his
Internet advertising works extremely well in the context of a search engine. Many searches are intended to lead to transactions, so matching a paid ad to a query is sometimes a good user experience. Advertising can work well in the context of niche content – a website focused on cross-country skiing is a great place to advertise to cross-country skiers, and there’s a decent chance they’re going to be interested in learning about your ski wax. Ads on sites like Facebook work much less well, and while targeting those ads based on demographics may make them more effective, that targeting doesn’t fix the core problem: people are using social network sites to communicate, not to consume content, and they don’t want to be bothered by ads when they’re communicating.
The good news – for users annoyed by ads, not for advertisers – is that we appear to learn very quickly how to ignore online advertising. comScore, a company that monitors user behavior on the web for advertisers, reported in 2007 that only 32% of internet users clicked on banner ads in a given month. By 2009, that number had fallen to 16% of internet users, and that a core 8% of all internet users – “Natural Born Clickers” (yes, that’s what they called the studies) – are responsible for 85% of all banner clicks on the web.
Read the rest. Zuckerman puts information about advertising and click-through rates into perspective.
Essentially, there are not enough new users available to come online and click on the banner ads, for instance, that advertisers use to generate interest and income / revenue.
Pay attention to Zuckerman. He's on to something: people pay attention to what they love. Other people, not advertisers, are likely to pay for the data that erupts from that community collaboration.
I'm reminded of a couple of projects I worked on in Hong Kong. They dealt with marketing, advertising, and the use of participatory media or the focus of niche channels in traditional broadcasting to drive revenue and sales of goods and services.
Some companies in Asia have figured out that you have to link reputation of the blogger or the social network participant with the reputation of the product. [ed note: I focus on Asia, because that's what I know better] This is something that Coca-Cola does quite well in China. Also, Dell was very good at it. And so was Sina.com, China's largest web portal.
I wrote about this for Media Partners Asia in Hong Kong.