The real comparison is whether ads placed on social sites do worse than Google's display (AdSense) networks.
If they do (and it sounds like they do), it's likely because the majority of social sites don't show up in search engine result pages (SERPs). My understanding is that most/many of the clicks on AdSense come from people clicking search results, and then seeing an ad relevant to their on one of the pages they click through.
Display will never equal search; intent isn't there. The only real money to be made in display is a) via SERPs and b) branding/influence ads, whose effectiveness is not easy to measure, since it isn't about clickthroughs.
And the social sites will need to move either to brand ads or to truly social ad concepts (ala facebook fan pages) that become part of the app’s experience and don’t draw users offsite.
Social ads are only cool if they can get you to start a conversation about the product with your friends. That's why the movie trailers they show in theaters are so effective. Because if they're cool you can talk about them to your friends sitting on either side of you. And then go see the movie a couple months later when it comes out.
Facebook social ads are lame because they don't start conversations. People complain about YouTube's plan to show preroll commercials, but honestly I don't think it's such a bad idea. Except instead of showing ads in front of all videos, only show ads in front of the movies that you've favorited. Why? Because when you watch a movie that's in your favorites, it's usually because you're showing your friends. So then there exists the potential to start a conversation. And the other 90% of the time when you're watching YouTube alone the ads never bother you.
I use facebook a fair bit and I've gotten so used to using it that I'd forgotten it had ads. I read this article and then had to check facebook to see if it actually display ads. I've been just totally screening them out.
Whatever the ineffectiveness of ads on social sites, I'd venture that tv or radio effectiveness is far worse. They just don't get graded (measured) with anywhere near the scrutiny that these ad networks do.
I'd take that bet -- but, then, I used to watch TV before TiVO was invented.
You see, kids, back in the Elder Days, when a commercial came on, you had no choice but to watch it. I mean, you could click to another channel, but then you ran the risk of missing part of the program that you were originally watching.
Nowadays, of course, I can easily go for years without seeing a TV commercial, so I guess you're right: an ad on Facebook, however ineffective, is better than an ad I never see. But TiVO users are still a minority in the world, so TV and radio ads are still plenty effective.
In today's world, I'd agree with you: when you want something, you search in Google. But the trends might change (and that's the interesting part about following how social ads fare nowadays).
Provided there are incentives for people in social networks to list the commodities they own, it would be rather nice, when you're about to buy a commodity, to get (on-demand) feedback from friends that already have this type of commodity (as opposed to the feedback from the whole community). Example: how to choose among the 5 different types of GPS'es? If a friend tells you that model A works flawlessly, you might just stop cross-analysing all available models on the market and just buy model A (via a sponsored link, next to the area where you exchange feedback in your social network).
The whole web 2.0 trend with user-generated content is nice, but it's limited because one does not trust anyone equally. You need personalization (a trend in web 3.0) and/or small communities (where people can relate to each other easily, and not "to the whole world"). Hacker News is an example of the latter, where I'd say the users are much more homogeneous than those on Reddit (and that's probably the main reason why people migrated from Reddit to Hacker News).
All in all, I do see potential for social ads, but in an improved form of what we have today.
This is why I'm in no rush to port my app to FB, I did some trials and worked out how the FB api works with some test apps, but as far as making money from ads I don't see it.
You have to somehow get people from FB to your own domain where you can really hit them with adverts :)
[+] [-] joshwa|18 years ago|reply
The real comparison is whether ads placed on social sites do worse than Google's display (AdSense) networks.
If they do (and it sounds like they do), it's likely because the majority of social sites don't show up in search engine result pages (SERPs). My understanding is that most/many of the clicks on AdSense come from people clicking search results, and then seeing an ad relevant to their on one of the pages they click through.
Display will never equal search; intent isn't there. The only real money to be made in display is a) via SERPs and b) branding/influence ads, whose effectiveness is not easy to measure, since it isn't about clickthroughs.
And the social sites will need to move either to brand ads or to truly social ad concepts (ala facebook fan pages) that become part of the app’s experience and don’t draw users offsite.
[+] [-] eusman|18 years ago|reply
[+] [-] Alex3917|18 years ago|reply
Facebook social ads are lame because they don't start conversations. People complain about YouTube's plan to show preroll commercials, but honestly I don't think it's such a bad idea. Except instead of showing ads in front of all videos, only show ads in front of the movies that you've favorited. Why? Because when you watch a movie that's in your favorites, it's usually because you're showing your friends. So then there exists the potential to start a conversation. And the other 90% of the time when you're watching YouTube alone the ads never bother you.
[+] [-] TheTarquin|18 years ago|reply
[+] [-] aswanson|18 years ago|reply
[+] [-] mechanical_fish|18 years ago|reply
You see, kids, back in the Elder Days, when a commercial came on, you had no choice but to watch it. I mean, you could click to another channel, but then you ran the risk of missing part of the program that you were originally watching.
Nowadays, of course, I can easily go for years without seeing a TV commercial, so I guess you're right: an ad on Facebook, however ineffective, is better than an ad I never see. But TiVO users are still a minority in the world, so TV and radio ads are still plenty effective.
[+] [-] aaco|18 years ago|reply
Simply people with commercial intents, willing to spend money on something, are more likely to use a search engine than a social network.
[+] [-] cawel|18 years ago|reply
Provided there are incentives for people in social networks to list the commodities they own, it would be rather nice, when you're about to buy a commodity, to get (on-demand) feedback from friends that already have this type of commodity (as opposed to the feedback from the whole community). Example: how to choose among the 5 different types of GPS'es? If a friend tells you that model A works flawlessly, you might just stop cross-analysing all available models on the market and just buy model A (via a sponsored link, next to the area where you exchange feedback in your social network).
The whole web 2.0 trend with user-generated content is nice, but it's limited because one does not trust anyone equally. You need personalization (a trend in web 3.0) and/or small communities (where people can relate to each other easily, and not "to the whole world"). Hacker News is an example of the latter, where I'd say the users are much more homogeneous than those on Reddit (and that's probably the main reason why people migrated from Reddit to Hacker News).
All in all, I do see potential for social ads, but in an improved form of what we have today.
[+] [-] agentbleu|18 years ago|reply
You have to somehow get people from FB to your own domain where you can really hit them with adverts :)