Digital Marketing, Social Media Strategy

3 Reasons Why Social Networks Are Bad Ad Buys

A recent article by Michael Estrin in iMediaConnection asks whether social media has lost its luster from an advertising standpoint.

Traffic and usage of the major social networks continues to soar, with traffic to Facebook and Linked In up considerably in the past 30 days. In fact, LinkedIn which is considered to be the least social of the social networks but the most popular among more seasoned business users, is up 187% year-over-year.

However, based on Estrin’s article, online media buyers are increasingly shunning social networks even though their audiences are huge and impressions are plentiful.

Pack Mentality, or Performance Issue?

For some media buyers, this poo-pooing of social media ad buys could be a herd effect. “people are saying social media isn’t a good buy, so I’m not buying it.” For other online media types – including yours truly – there’s another fact at work….

Historically, Ads on Social Networking Portals Don’t Work

I have personally supervised the purchase of many ads on MySpace and Facebook, and the performance of those ads has been consistently terrible when compared to the same ads targeting the same people running on different sites. I believe there are 3 reasons why this is true.

#1 – Proprietary Formats

Have you really looked at a social network page lately from an advertiser standpoint? It’s just an absolute mess. Facebook encourages users to cram as many applications and widgets as possible onto their profile pages, making for significant tunnel vision. Who can even notice the banner, when you’re being invited to play “Can you Name This Candy Bar” by a long-lost high school flame?
facebook jason baer 300x256 3 Reasons Why Social Networks Are Bad Ad Buys

Not to mention the fact that the Facebook “banner” format is not really a banner at all, but a text-heavy, seemingly contextual ad that purports to serve up relevant offers based on your profile data. However, I seem to get an ad for liposuction every third visit, which while debatably necessary, doesn’t endure me to Facebook (nor to my Wii Fit which give me the “you’re obese” message when I log on – I love being ridiculed by my gaming system).

So, considering you can’t do anything remotely creative within the Facebook ad area, is it any wonder that the ads don’t pull? Why can’t Facebook use IAB standard ad formats like everyone else?

#2 Too Much Clutter

The second issue is the inability to determine if an ad is actually an ad. This is the biggest problem with MySpace, which has page layout regulations approximately equal to Chinese air quality standards. Lax, at best.

As the screen shot below for Paris Hilton Zombie demonstrates, the folks at University of Phoenix are not likely to be getting a lot of solid eyeballs on their banner, which even if it sprayed acid out of the computer monitor would be less arresting than the rest of the page.
myspacecom paris hilton zombie 31 female va wwwmyspacecom downtownj 300x278 3 Reasons Why Social Networks Are Bad Ad Buys

#3 Lack of Relevancy

The success of the social networks in attracting huge audiences that pile up the page views actually hurts the sites from an advertising perspective. To even remotely fill their massive inventory, these sites are accepting run-of-site, low CPM deals as long as the advertiser meets a minimum overall spend ($10k+ in most instances).

As a result, the ads you see on these sites (especially MySpace) are frequently mismatched with their viewers. Considering heavy social network users view 30+ pages per visit, it takes about 2 visits to realize that most of the ads on the site are not targeted, nor relevant, therefore why bother paying them any attention? Imagine if every Super Bowl commercial was for discount embalming services. By halftime, you’d be ready to tune out.

While this trend is perhaps most egregious on these sites due to their millions of page views per hour, the explosion of ad inventory online is an industry-wide problem. I don’t blame sites for trying to monetize their content, even if it’s at $1 per thousand impressions, but the subsequent lack of ad relevancy trains users that banner ads usually don’t have anything interesting to say, and that hurts all advertisers.

The media buyers that are still buying social network ads are contributing to the problem by not implementing impression or frequency caps. I saw the same University of Phoenix ad about 9 times in a row on MySpace. That’s not an efficient or smart media purchase.

If you’ve got examples of good (or bad) social network advertising, leave a comment.

Related
  • http://twitter.com/andismit/status/868227539 Andrew Smith

    Google Shared: 3 Reasons Why Social Networks Are Bad Ad Buys: A recent article by Michael .. http://tinyurl.com/5o2lpt

  • http://www.santy.com/ Steve Koch

    Jason – Everything you say is right on. I would be hard pressed to ever imagine a situation where I would recommend a buy on myspace for a client. I have done small buys on facebook that have had success. In those cases, we had a very specific call to action that was targeting specific audiences (for example, teens in Colorado.) Click-through wasn’t through the roof, in fact it was barely average, but since we were paying per-click, it was a very efficient method of reaching our goals.

    But in the big picture, the name of the game is engagement on these sites. Brands need to understand that there will be few situations that you can generate sales solely on a facebook or myspace campaign, but if done correctly, you can build a relationship with your audience. Two great examples of that are Target and Dunkin Donuts on facebook. Target has a dynamic presence that engages without being a hard sell and Dunkin has been one of the best at using the event feature. Their recent free iced coffee day had over 100,000 RSVP’s on facebook.

  • http://www.santy.com Steve Koch

    Jason – Everything you say is right on. I would be hard pressed to ever imagine a situation where I would recommend a buy on myspace for a client. I have done small buys on facebook that have had success. In those cases, we had a very specific call to action that was targeting specific audiences (for example, teens in Colorado.) Click-through wasn’t through the roof, in fact it was barely average, but since we were paying per-click, it was a very efficient method of reaching our goals.

    But in the big picture, the name of the game is engagement on these sites. Brands need to understand that there will be few situations that you can generate sales solely on a facebook or myspace campaign, but if done correctly, you can build a relationship with your audience. Two great examples of that are Target and Dunkin Donuts on facebook. Target has a dynamic presence that engages without being a hard sell and Dunkin has been one of the best at using the event feature. Their recent free iced coffee day had over 100,000 RSVP’s on facebook.

  • http://www.notwillsmith.com/ William Smith

    MySpace yeah, no brainer with that one. But Facebook.. Well, it has at least some potential. The user base seems to be a little… older? More disposable income? Plus their targeting is very good.

    Beacon had the potential to be awesome.

    Banner ads just aren’t the way to go in general imo (coming from a search / social guy). With social, you need to approach it in a completely new way. Like Steve said, engagement.

  • http://www.notwillsmith.com William Smith

    MySpace yeah, no brainer with that one. But Facebook.. Well, it has at least some potential. The user base seems to be a little… older? More disposable income? Plus their targeting is very good.

    Beacon had the potential to be awesome.

    Banner ads just aren’t the way to go in general imo (coming from a search / social guy). With social, you need to approach it in a completely new way. Like Steve said, engagement.

  • Sean Rogers

    Point #3 – relevancy – is probably most significant. Does your content and product match the audience base? In the case of MySpace – for the right product it can be an effective place to be. It depends upon your goals – traffic building or revenue generation? In the very social world of MySpace, for example, where people are frequently looking to connect with members of the opposite sex, a buy for an adult store might be very relevant. I experienced a great deal of success driving traffic from MySpace for an adult retailer. Unfortunately, the buyout of the site by Fox put a stop to future buys and limited the kinds of ads they would accept.

    Perhaps it’s a matter of MySpace, and similar sites, owning up to who their audience is, what’s relevant to them and helping advertisers get real value for their buys. Of course, the market has a way of facilitating this.

    I also agree that, with respect to social media, paid advertising is far less relevant than exploiting the tool as a user rather than an advertiser.

  • Sean Rogers

    Point #3 – relevancy – is probably most significant. Does your content and product match the audience base? In the case of MySpace – for the right product it can be an effective place to be. It depends upon your goals – traffic building or revenue generation? In the very social world of MySpace, for example, where people are frequently looking to connect with members of the opposite sex, a buy for an adult store might be very relevant. I experienced a great deal of success driving traffic from MySpace for an adult retailer. Unfortunately, the buyout of the site by Fox put a stop to future buys and limited the kinds of ads they would accept.

    Perhaps it’s a matter of MySpace, and similar sites, owning up to who their audience is, what’s relevant to them and helping advertisers get real value for their buys. Of course, the market has a way of facilitating this.

    I also agree that, with respect to social media, paid advertising is far less relevant than exploiting the tool as a user rather than an advertiser.

  • http://facebookbanner.org/ facebook banner

    That was pretty much good information. Thanks for all your inputs. I must agree with those top reasons for all social networks.

  • letstalkandchat

    I just found a great company that builds websites for info products. To keep your costs low, they’ll mentor you on how to create your site, design a marketing funnel (one of the guys works in Hollywood and makes really slick videos), and the other guy programmed Myspace. If you’re looking to have professional web design for your small business and not waste any time or money then check their site out. Check them out: http://www.mikelmurphy.com/easy-info-product-site-system/

  • kathrinegoodrum

    You guys should check out this new social network http://www.formvote.com , it’s pretty awesome.