September 2008
Greed in the Social Networking Space
by Charles H. Green on Monday, November 19, 2007 (post #206)
It took the advertising industry about 150 years to get to the point of putting ads on the inside of bathroom doors. It took considerably less for the commercial vultures to zero in on the social network phenomenon. Except this time, it’s an inside job.
First, MySpace. In July of this year, Rupert Murdoch’s News Corporation bought MySpace, making a few more mega-zillionaires out of kids who were in it for kicks. Murdoch knew better, and immediately set about “monetizing” his investment.
How’s it going for his target audience?
In the words of a college freshman, Marshall Green:
MySpace is going to end up just like Friendster. Except for bands, some high school kids I know still use it but the trend has shifted to Facebook.
I think the main reason is the site design. MySpace just has a terrible interface that continues to deteriorate as the developers tack on extra features that Facebook integrates better.
The thing that Facebook does well, finding other people you know and connecting with them, are more of an afterthought on MySpace.
Instead of using AJAX and web 2.0 technology to update the page without reloading the whole thing or taking you to a new page, MySpace makes you jump through a bunch of screens to do simple things like leave comments. This is basic stuff that MySpace has neglected to do because they are lazy!
What's worse is the amount of ads. Most ads on MySpace are sketchy, and in the past have linked to adware and spammers. Half the time when you visit their front page, the entire background is a giant ad for a Fox TV show or movie. It's obtrusive and detracts from the experience.
It all gives you the sense that the company doesn't care about delivering a good experience, they just want to make a lot of money with as little work as possible. The interface was never spectacular, but I noticed more ads and a slowdown in new features following the Fox takeover.
(Full disclosure: I am related to young Mr. Green by marriage; his mom’s to me).
That was several weeks ago. On November 6, the “good guys” in this space—Facebook—announced their new approach to incorporating advertising into that ostensibly wholesome society.
The gist of Facebook’s idea is to allow Big Advertisers in to make “friends” of existing users, and to build their reputation by demonstrating the “trust” that one’s “friends” have in the product being advertised.
As one wag put it, “so it's like spamming your friends?”
You know you’re in for it when language gets reinvented, a la doubletalk like this from Mark Zuckerberg, Facebook’s CEO and new gazillionaire:
Q: “Are you worried this will make Facebook too commercial?”
Z: “Actually I think this will make it less commercial because the ads now are [more generic].”
For a deliciously cynical take on this, see Nicholas Carr’s blog .
Marshall’s view?
If I start seeing notifications and friend requests everywhere from Coca Cola and Exxon Mobil, then Facebook will be on the way out for me. There are already some sneaky ads that masquerade as friend notifications. They trick you and I've nearly clicked on them several times before realizing they were ads.It’s been clear for centuries that you can always find success by going more down-market in taste than the last guy; more negative in political advertising than the other guy; and more overtly commercial than your competitor.
If it gets as bad as MySpace people will find something better. There will obviously be another new trend in social networking sites in the future anyhow.
The question is: where’s the bottom?
When trust is just a tactic, “friends” are not what they seem, and social networks are flipped into cynical mouthpieces for corporate America, it feels like we’re pretty low.
Maybe Marshall’s right in thinking his generation will reject the hype.
But as H. L. Mencken said, “Nobody ever went broke underestimating the taste of the American public.”
I wouldn’t short Murdoch and Zuckerberg just yet.
Charles H. Green, author of Trust-Based Selling and co-author of The Trusted Advisor, is a consultant and speaker on trust issues for some of the world's best companies. He has written about trust in business relationships at Trust Matters since 2006. Read more...
posted in Trust in Leadership Development and Strategy, Trust-based Selling
Gab, the Facebook lover said
http://seoroi.com/facebook
IMHO, the Facebook advertising platform is incredibly innovative and will probably be a success for advertisers. It seems they've solved the CTR issue and the pricing issue. The bids were at $10B for it recently, based on somewhat sketchy valuation mechanisms. Look for it to be valued at slightly under that based on proper valuation by early 2009 (less because they're overvalued and because internet advertising is going to hit a recession due to the excessive supply, imho).
posted on Wednesday, November 21, 2007