The only real problem that has somewhat stunted the grow of social networking sites in their recent rise to prominence has been their inability to support efficient advertising and in turn monetize their platform for what it’s worth. The traditional, flashy, shove-it-in-your-face banner ad model of the old web has proven it simply does not work with these networks. This leaves advertisers with the conundrum of how to sufficiently reach their audience through these highly prevalent networks but also creates a dilemma for the social networks in finding ways to monetize their work and fund their operations.
I read an article this morning by Steven Hodson of Inquisitr.com that made a great point about this ongoing struggle with the monetization of social networking. It used Twitter as an example basically saying that Twitter has amassed a “treasure trove of information” that provides real-time opinions on anything you could ask for. It is his opinion, and I tend to agree, that the true “monetary” value of Twitter and most other social networks for that matter, lies in that database of consumer opinion and interaction they base themselves on. This notion is made even more evident by Facebook’s recent alteration of their bylaws which now grants them total ownership and control of any content ever posted on the site. Which I basically feel is complete bullshit but necessary for Facebook Connect to operate freely without restrictions from the law.
(Here are several other links on that subject, if you’re interested, that will delve much deeper into the situation than I did.)
Ironically a Facebook group against the new Terms of Service
Though, Twitter’s most valuable characteristic lies in the fact that its information is in real-time, all social networks boast their own bevy of niche data and specialty information that could potentially be utilized to marketers’ delights. Orkut (Brazil), Mixi (Japan) and Bebo (U.K.) are just a few of the social networks that offer information about people and cultures in different geographic regions, just as Facebook and Myspace represent ours. Digg, Vimeo, Boxee, Youtube and Viddler are all examples of social video sites that offer invaluable insight they way people watch video and what they think is interesting. Songza, Last.fm and Just Hear It do the same for music. All of these site provide a user-friendly, interactive approach to experiencing and connecting with our media and friends. For advertising to succeed in this social model, it needs to take the same user-friendly, interactive approach by making engaging and informative ads, as well as becoming involved in the conversation with their consumers.