Advertising in Social Networks. A Waste of Money?

Besides of constant rumour of Twitter and Facebook planning to make their users pay for the platform, we know they are not going to do it. Why? Because it would simply not work.

According to the 2010 USC Annenberg Digital Future Study (PDF) on Twitter, a stunning 0% of the interviewed users said they would be ready to pay for the platform. And it is not difficult to imagine that a similar percentage would be ready to pay for Facebook.

So, if the Social Networks cannot charge the users, how do they cover their costs and get so rich?

Yes, you guessed right: Advertisers are happy to pay. But is it worth it? Does the money companies pay for ad space in Social Networks really bring a strong ROI?  According to Jeffrey I. Cole, the director of the Center for the Digital Future at USC’s Annenberg School for Communication & Journalism, “users express strong negative views about online advertising, but they still prefer seeing ads as an alternative to paying for content. Consumers really want free content without advertising, but ultimately they understand that content has to be paid for — one way or another.”

So the users do not like the ads, but they can stand them. But is not the whole point of Social Media and advertising to engage the users, make them love the brand and get them excited of seeing your ad?  Sure, “Banner ad blindness” is not new, but should the advertisers pay thousands for Social Networks if the ad they place there will be barely tolerated?

Maybe it is better to sit down and write on a piece of paper the real reason why you got involved with the Social Networks in the first place. If you wrote down “Because everyone does”, think again. You want to sell your product or service, right? Social Networks are the perfect way to engage with the consumers, to forget the one-way discussion and have a real conversation with them. When the consumers have an emotional connection with your brand, they will buy your product or service. AND recommend it not only for their real friends, but their Twitter followers and Facebook” friends”.

I am not ruling out the banner ads, of course. But there is a big difference whether the banner is seen as an ad or as a way to communicate with your consumers. One of the mistakes many companies do is to concentrate only on ads selling their products in Social Networks – it is better to use other sites for that. Main point here is to reduce the amount of money you pay for Social Networks on direct, pushy advertising, use these ads on other more targeted sites and shift your focus on Social Media engagement. If you have to pay your eye off for a small ad space, make sure it will work. Invite people to your site, offer them an application or a tool, funny game, or contest instead of a banner that says “Buy this today”.

It might not be a waste of money to pay for ad space in Social Networks, but it would be useless to place an ad there that does not work.

Pauliina Jamsa

I am Pauliina Jamsa, a digitally disruptive marketing rock star with International business experience hard to beat - I have lived in 5 countries and speak 7 languages. Based in London, I am currently working as Global Senior Online Marketing Manager at Siemens. Remember these are my own opinions only. Thank you for checking out my blog, feel free to get in touch! Twitter: @pauliinajamsa LinkedIn:

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