I have recently seen discussions on the use of social networks for marketing purposes. This not only involves companies advertising on sites like facebook, but also many organisations putting themselves to be followed via twitter and the like. Newspaper websites (we could consider them for a while social networking) all have adverts (on the side of a page or appearing when you click on things). The social interaction is mixing up with advertising.
Advertising of course is a form of social interaction, but with some science behind (hopefully, without aiming to have a go at advertisers). There is always a continuous battle of spaces between advertising and social networking. We have heard this week that in the UK the ban for TV programmes to use adverts in their content (for instance a soap opera character drinking a coca-cola and showing it) has been lifted. A colleague who is expert in marketing suggests this is a positive move, given that the advertising industry is in need of new channels, and that audiences are mature enough not to be totally driven by what adverts suggest (you drinking coca-cola because your favorite TV character does it).
Things are still in the balance. Whilst advertising tries to catch up with audiences, audiences always devise new ways of socialising without the intromision of advertising. It would be better if we understood a bit more the complexities of both. Just learned that advertising on the internet has different revenue models if you are hosting a website. You can charge advertisers for the space, for the number of clicks on their ads, or for the redirection that you give to potential customers to the advertisers own sites.
Also learned today that sites like facebook are finally breaking even (if you do not count capital investment), and could be making money soon. How? self advertising (advertising to those fitting the profile); selling advertising space to direct users; virtual gifts (linked to the real ones); micropayments (small transactions if you buy real gifts).
mmm, it sounds to me similar to what I heard in a conference last week about the credit crunch structure: you have a portfolio of income sources, some of them riskier than others. That is all fine up to the point where there is a big external change. In the case of the credit crunch, there was a drop in property prices (big external change), so even if you had the best portfolio of mortgages (in terms of risk), your losses came from all products. The customer does not see a good value in what you offer. What could this mean for sites like facebook? It needs to be careful not to lose its appeal as a social networking site, not as a commercial site, that is to people like me a good value. Or maybe this means that any big change can come at any moment, and in a couple of years time we will not be thinking of facebook, maybe something else. If this is the case....things are still in the balance, hopefully for good.
