Why advertising in social networks does not work?

Wild web’s hottest property, Google admits that it is having a tough time monetizing social networks.

Ditto with Yahoo! and Microsoft.

So, what’s the big deal about social ads? Why is monetization still a huge challenge for social networks?

The answer lies in user’s intentions.

Intention? What’s user intention?

“An agent’s intention in performing an action is their specific purpose in doing so, the end or goal they aim at, or intend to accomplish.”

Look at the keyword – ‘purpose’ and ‘end goal’.

Now, lets take an example of user intention and importance of ‘purpose’:

What is your intention when you are searching at Google/Yahoo?
You are searching for an answer to your query; and that’s why your chances of clicking on a contextual link, be it a sponsored or part of serp (i.e. search engine result page) is very high.

What are your intentions when you are surfing Orkut/FaceBook/MySpace?
Chances are that you probably know where to go – which link to click, where to read scraps..in essence, your intention is not ‘exploration’, rather a typical non-search activity and more of ‘hanging out’.

Which means your ‘intentions’ of clicking on an ad may not be very high.

monkey reading ad?

To cut the long story short, you opt-in and choose your social network, while you hop to search engines only when you are seeking information.

How is your end-goal related to monetization?
Isn’t your end goal clearly defined while performing a search? But not when you are surfing a social network? And that’s why, you will be spending lot more time at a social network site rather than search engine.
Infact, Google prefers short time-per-visit per searches, while FB would love to have you till eternity.

Why time-per-visit becomes a major parameter for advertisers?
For social networks, the longer the stay, better is your awareness about the site (and it’s structure). And because of this, social networks are lesser attractive for advertisers (and maybe a good candidate for only banner ads).
Compare this with search engines- within a blink of an eye, you should be able to find the relevant answers for your search query (be it thru’ the serp or sponsored links) and that results in ‘exploration’ of links.

Moreover, shorter time-per-visit results in displaying ads to more searchers and possibly, better RoI for advertisers.

What do you think? What’s your opinion?

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