Monetizing Social Networking

Monetizing social networking sites is still proving problematic. This article in The New York Times summarises some of the issues that Procter & Gamble have been encountering using Facebook.

It is interesting that just 3 percent of Internet users in the United States would willingly let publishers use their friends for advertising. Yet there is research that users are KEEN to publicise their views and experiences with products. According to research from DEI Worldwide 63 percent of consumers would like to share their opinions about a brand or product with a representative, and 67 percent are likely to pass along information from a brand representative to other people. Bit of a difference between 3% and 63%!

Personally, I suspect the major problem for advertisers is that social networking sites are about social interaction and not product placement - when conversing with friends and family, banner ads just seem a little inappropriate. If we aren't careful, banner ads are just going to make users feel like shills.

Interestingly, many organisations seem committed to monetizing social networking sites (asides from the social networking sites themselves that is), but only time will tell if this will work. Either way, I suspect that it is going to take longer that anyone thinks. In the meantime, users will continue to wield new found consumer powers.