Skip to main content

Why Social Networking isn't Like Radio or TV

Hundreds of millions of U.S. consumers have adopted social networking services as a tool to manage their social connections and express themselves.

Spreading like wildfire, social networks have a stickiness among consumers that potentially make them prime real estate for advertising. However, a new report from IDC argues that sites like MySpace, Facebook and YouTube have not yet realized their full potential as advertising media.

According to IDC's assessment, social network operators are only beginning to learn how to monetize their services. Few offerings currently generate income in proportion to the media attention they receive.

However, the popularity of social networks will eventually translate into revenues. IDC estimates that social networks only made about $400 million in revenues in 2006, but could make as much as $1 billion this year.

To generate new revenues in the future, IDC expects that most social network services will employ a mix of business models, including advertising, subscriptions, and eCommerce. Of these three models, only advertising scales well enough to make social networks interesting for portals and major media companies.

So far, however, little advertising can be found on social networks. And while the issues underlying slow ad sales may eventually be solved, some services may never be able to attract brand advertisers on a large scale, according to IDC.

"Social networks cannot guarantee a brand-safe environment. Advertisers don't want to see their ads displayed alongside illicit content, for example," says Karsten Weide, program director of IDC's Digital Marketplace: Media and Entertainment. "The dilemma for social networks is if they start to control what content users can post, they will lose popularity, which is what attracted advertisers in the first place."

I believe that the failure of marketers to fully utilize social networking platforms for advertising is a direct result of the inept ad agencies that they hire to guide their online strategy. Obsolete approaches, like banner ads as an example, deliver a predictably poor ROI. Regardless, legacy ad agencies stay within their comfort zone -- at the expense of their client's squandered budget.

Social networking shouldn't be viewed like the radio or television medium of a bygone era. Granted, this clarification may not be profound, but some people apparently don't see the disconnect.

Imagine going to a physical networking event in your local community and investing all your effort in designing and producing your "name badge," but totally avoiding the opportunity to open your mouth and engage the other attendees in a meaningful dialogue -- that's exactly how brand advertising is typically applied on a social networking platform.

My point: if you employ the mind of a legacy broadcast media expert -- that's operating with the mistaken belief that mass-market advertising methods are appropriate on an interactive online forum -- then frankly you deserve the pitiful results that you're experiencing.

That said, the upside for creative consumer engagement campaigns on social network sites is essentially untapped, and devoid of competitor activity. The raw potential justifies the time and effort required to experiment with new techniques that demonstrate respect for the individual -- targeting methods based upon segmentation research and content personalization.

Popular posts from this blog

GenAI: A New Era in Business Transformation

The advent of artificial intelligence (AI) has ushered in a new frontier of innovation, with Generative AI (GenAI) at the forefront. At the brink of this revolution, it's crucial to understand the current GenAI adoption and its implications for commerce worldwide. A recent poll conducted by Gartner provides valuable insights into this emerging trend and the potential upside opportunities. Generative AI Market Development The poll, which included 1,419 executive leaders, indicates a significant shift in the corporate world's perception and adoption of GenAI. The data reveals that 45 percent of respondents are currently piloting GenAI, while another 10 percent have put it into production. This is a substantial increase from a similar poll conducted in March and April 2023, where only 15 percent were piloting and 4 percent were in production. GenAI is no longer a mere buzzword; it has become a strategic focus for organizations worldwide. As Frances Karamouzis, VP Analyst at Gartne

GenAI Revolution: The Future of B2B Sales Apps

When B2B buyers consider a purchase they spend just 17 percent of that time meeting with vendors. When they are comparing multiple suppliers‚ time spent with any one salesperson is 5 or 6 percent. Self-directed B2B buyer online research has already changed procurement. IT vendors are less likely to be involved in solution assessment. Now, more disruptive changes are on the horizon. By 2028, 60 percent of B2B seller work will be executed through conversational user interfaces via Generative Artificial Intelligence sales technologies -- that's up from less than 5 percent in 2023, according to Gartner. Generative AI Market Development "Sales operations leaders and their technology teams must prepare for the convergence of new forms of artificial intelligence, dynamic process automation, and reinvented deal-planning activities that will transform the sales function," said Adnan Zijadic, director analyst at Gartner . According to the Gartner assessment, Generative AI (GenAI) s

Industrial and Manufacturing Technology Growth

In an evolving era of rapid advancement, market demand for innovative technology in the industrial and manufacturing sectors is skyrocketing. Leaders are recognizing the immense potential of digital transformation and are driving initiatives to integrate technologies into their business operations.  These initiatives aim to enhance efficiency, reduce costs, and ultimately drive growth and competitiveness in an increasingly digital business upward trajectory. The industrial and manufacturing sectors have been the backbone of the Global Networked Economy, contributing $16 trillion in value in 2021. Industrial and Manufacturing Tech Market Development   This growth represents a 20 percent increase from 2020, highlighting the resilience and adaptability of these sectors in the face of unprecedented challenges, according to the latest worldwide market study by ABI Research . The five largest manufacturing verticals -- automotive, computer and electronic, primary metal, food, and machinery -