But in a February call with financial analysts, Google cofounder Sergey Brin conceded that the investments “didn’t pan out as well as we had hoped.... I don’t think we have the killer best way to advertise and monetize the social networks yet.”
Neither has anyone else, apparently, even though millions of people worldwide are spending more and more time on these sites.
“It’s been a huge disconnect between traffic to social network sites and revenue,” says Debra Aho Williamson, a senior analyst for eMarketer.
The challenge is almost hard-wired into the business plan, says Gary Stein, director of strategy at Ammo Marketing in an e-mail. “Although you’ve provided the infrastructure, the network and all the interactions belong to the members,” he says. “That is, they feel like the space and the networks are theirs, and are very uncomfortable with you, as a company, taking too much advantage of it.”
Conventional “click on me” ads haven’t been seeing the same success they often do on search engines such as Google.
Mark Brooks has placed ads on MySpace and has been “amazed” at the low response rate, even on large, well-placed ads. The veteran marketing consultant says the puny results were almost “unbelievable.”