There was a good article in the New York Times on Saturday: Advertisers Face Hurdles on Social Networking Sites. It charts the problems social media sites are having in making advertising work for their clients and therefore converting traffic their own traffic into cash.
The following paragraph sums it up well:
When major brands place banner advertisements on the side of a member’s home page, they pay inexpensive prices, but the ads receive little attention. Seth Goldstein, co-founder of SocialMedia Networks, an online advertising company, wrote on his Facebook blog that a banner ad “is universally disregarded as irrelevant if it’s not ignored entirely.”
For me it is increasingly obvious that unless the adverts hold some kind of interest for consumers then they aren’t going to work well. As the NYT article notes that can take the form of good old fashioned promotions, but for me the more interesting approach is to get the community excited about (and discussing) some aspect of the brand or it’s products. Further, brands who build profiles on social networks are unlikely to succeed unless they find ways to genuinely engage with their potential customers – see this NYT write up on Cartier and Myspace.
Which really means that the advertising becomes content.
I have long been sceptical about the notion that advertising can be content, but I have been changing my mind in recent weeks. My reasons for scepticism are that it is really hard to turn brand messages into interesting content, but the new news is that people are starting to make it work, and, as shown in the NYT articles I linked to above, the seemingly easier alternatives are proving ineffective.