The ad dollars are not coming into social networking sites as planned. “MySpace Might Have Friends, but It Wants Ad Money” says Brian Stelter in the New York Times of June 16th.
Ad Model for Social Networks?
Here is what my yellow marker highlighted from his article, to caution those thinking about depending on the advertising model to support their niche social networking websites:
“…the cash is not coming in as quickly as the company [MySpace] had hoped.”
“…there are still many questions left about the advertising value of social networks.”
“…all [Myspace, Facebook and Bebo] have ambitious plans for making money, but not enough proof that the plans are working.”
“…Google said that social networking inventory was not earning money as well as expected.” (Quote is from January. Google says things have improved.)
Sites are trying to “solve the social networking riddle,” to hold advertisers, by hyper-targeting. “Buckets” (interest groups) are the solution on MySpace and “social ads” related to a friend’s product preferences are the fix in Facebook. We’ll see.
Stelter says Facebook, MySpace and Bebo execs are counting on success and revenues in the long-term. Care to comment on whether you can wait that long? Are niche sites the exception? The answer?
More of Social Network Business Models
See also this page of related posts on social network business models.