Wild web’s hottest property, Google admits that it is having a tough time monetizing social networks.
Ditto with Yahoo! and Microsoft.
So, what’s the big deal about social ads? Why is monetization still a huge challenge for social networks?
The answer lies in user’s intentions.
Intention? What’s user intention?
“An agent’s intention in performing an action is their specific purpose in doing so, the end or goal they aim at, or intend to accomplish.”
Look at the keyword – ‘purpose’ and ‘end goal’.
Now, lets take an example of user intention and importance of ‘purpose’:
What is your intention when you are searching at Google/Yahoo?
You are searching for an answer to your query; and that’s why your chances of clicking on a contextual link, be it a sponsored or part of serp (i.e. search engine result page) is very high.
What are your intentions when you are surfing Orkut/FaceBook/MySpace?
Chances are that you probably know where to go – which link to click, where to read scraps..in essence, your intention is not ‘exploration’, rather a typical non-search activity and more of ‘hanging out’.
Which means your ‘intentions’ of clicking on an ad may not be very high.
To cut the long story short, you opt-in and choose your social network, while you hop to search engines only when you are seeking information.
How is your end-goal related to monetization?
Isn’t your end goal clearly defined while performing a search? But not when you are surfing a social network? And that’s why, you will be spending lot more time at a social network site rather than search engine.
Infact, Google prefers short time-per-visit per searches, while FB would love to have you till eternity.
Why time-per-visit becomes a major parameter for advertisers?
For social networks, the longer the stay, better is your awareness about the site (and it’s structure). And because of this, social networks are lesser attractive for advertisers (and maybe a good candidate for only banner ads).
Compare this with search engines- within a blink of an eye, you should be able to find the relevant answers for your search query (be it thru’ the serp or sponsored links) and that results in ‘exploration’ of links.
Moreover, shorter time-per-visit results in displaying ads to more searchers and possibly, better RoI for advertisers.
What do you think? What’s your opinion?
Right.
Share your views completely. Blogged about it a week back. http://techquillashots.wordpress.com/2008/02/03/monetizing-social-network/
I don’t see this is a problem that is unique to social networks. Almost no site, with the exception of search, captures the user’s intent. But that does not mean they are not being monetized. Even google is able to heavily monetize their non-search inventory through their ad sense program – which does not use user intent in any way to select ads that they serve on publisher’s sites.
Monetization in social networks is difficult because it is a walled garden without head content. Advertising has traditionally followed content and the diffused, communication driven nature of social networks does not easily lend itself to advertising. Another example? – webmail. yahoo, google and microsoft struggle to monetize their enormous mail traffic!
Too bad it took them a few billion dollars to realize that
. Keyword / display advertising will hardly be the right means of monetizing. But with access to demographic info, interests, important dates in your life, what you are upto and where you are – advertising can get really really targeted. Its just going to take a few years to get to that level of personalization.
Besides, advertising, in itself may hardly be the right approach for monetization. Brand building or market research might be a better approach.
At Muziboo.com we have seen that search pages generally have a good CTR followed by the discussion forums
other pages don’t do too well … I am not sure why google does not let people open ads in new window by default .. the problem is people don’t want to click ads and leave the page they are on
Any idea why this decision on google’s part ?
Regards
Prateek Dayal
“Moreover, shorter time-per-visit results in displaying ads to more searchers and possibly, better RoI for advertisers.”
Really? I guess my spending more time on a search result wont affet the number of times an ad is displayed. ( Its not a queue through which people access google ! )
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My two cents about this post here – http://prabhu.wordpress.com/2008/02/11/advertising-and-social-networks/
@Vinod – Agree with what you say, infact what’er is true of social networks is also true for content sites (thats why FB shows desperation with Beacons).
@Mohit – the more you spend time on a search query, more is the page view…and diff. ads that are displayed.
Google wants u to get off the serp asap – since
a. advertisers will hv limited budget (based on geography) and showing the same ad across the same session isn’t profitable.
b. Google’s job is to increase the no. of ads shown * no. of searches – both go hand in hand.
c. search engines should not end up becoming the ‘third place’
I have a slightly different take on that . part of the problem with monetizing social network using advertisement is the wrong performance measurement matrices used and wrong type of advertisements .
if you look at the origin of Pay Per Click phenomena you will see that it was invented in hard days of dot com bust when Ad spend was less and basic idea was to minimize risk for advertiser . this works perfectly for search because a search engine by its very definition is not a destination site . its a referral site . if your intent is to increase sales point blank you may go to search engine thing by all mean.
but that leaves a lot of potential untapped .
this type of advertisement don’t attach any value to Awareness , engagement and eyeball time . whole proposition is based on action ability and measurement .
a social network is a destination site so the kind of advertisement which works for them and kind of performance criteria is totally different. they got to be something like viral video or viral game [ a coca cola logo jigsaw puzzle on FB ] .for example if i am a frequent vacationer and always on lookout for deal and destination info than i will go to search engine while its a holiday season and get deal .
But if this is not holiday season than i will not click on Ad link . but its very probable that i might want to have some thing like this http://www.travelpod.com/traveler-iq
Becon was a good idea in that line but their were some execution glitch . webchutney viral is good , contest2win is doing the same for many year .
are we too close to see ?
Good point, Prashant.
Continuing further, lets get back to what Ashish said. The intention of a social networker is to interact with his/her friends, whatever be the means: scraps / communities / scrabulous etc.
The advertising on a SN has to adapt to this. The viral videos or viral games etc. have to fit into this frame. SN is about interaction. The value for advertiser will come from the connection users make with brands in this context.
C2W and others are different because their games and virals still focus on the individual (correct me if I am wrong. It has been a long time.). That’s not what a SN is about.
i dont think its true that people dont explore on SNs. I have seen many people try out new apps on Facebook, and even send to their friends to try them out.
It just means that advertising in the current form may not be working.. there is a need to innovate here.
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Hi,
I personally feel that there is very little relevence in online advertising per s e
visitors. While internationally people mite relate to a campaign in India (both in
social networking and otherwise) users don’t relate to ads and hence are not able to
capitalize on the biggest pro of online advert.