What are ads worth on social networks? Here’s some more info

September 15, 2008 | Eric Eldon | Comments | |

Earlier this year, Google complained about how little money it was making from the search and keywords ads that it runs on MySpace. But advertising on social networks is still being figured out. MySpace itself, along with rivals like Facebook and a range of startups, are trying to develop forms of ads that attract more clicks and more monetizable actions from users. So here are a few related news tidbits:

Today in New York, Nick O’Neill of the blog AllFacebook has organized a conference that examines a number of social-ad issues, like the role of widgets, opportunities for brands, and best practices in social ad measurement. It’s happening now, so if you’re located nearby, check it out.

Meanwhile, RockYou a leading social network application developer, has just launched an informational site about its various advertising products (see screenshot, above). RockYou has grown large through creating simple widgets, but it’s been aggressively cutting deals with major advertisers, including movie studios. The company lets advertisers sponsor its applications, run text and multimedia ads within them, or create branded parts of an ad.

Back to MySpace. The company is planning the launch of a new music site, MySpace Music, in the coming weeks. It has already signed up four major brands, McDonald’s, Sony Pictures, State Farm, and Toyota, to sponsor features on the site. MySpace has already been making millions by letting advertisers run ads covering its homepage, MySpace.com — ad space that’s apparently too valuable for a third party like Google to manage. While MySpace hasn’t led the way in terms of social network product innovation, it certainly has in terms of monetization. It expects to make nearly a billion dollars this year, far more than what’s expected of any of its rivals.

Somewhere in these social networks, there’s money to be had.

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About the Author, Eric Eldon

Eric currently covers digital media technology and business news, especially what's happening on social networks and their platforms. He also writes and edits stories about venture capital, and lots of other stuff, too. He started at VentureBeat in the spring of 2007, half a year or so after Matt Marshall left his reporting job at the San Jose Mercury News to found the site. Eric previously cofounded a startup called Writewith, that was building editorial software for newspapers and other groups of writers. The startup didn't work out, but he learned a lot.

  • Maybe Google didn't got much revenue from myspace in terms of advertisements; however, we cannot neglect myspace because its one of the largest in this industry. the only point i think maybe that google ads were'nt so aggressive to ask the visitor to click it. lolz, its easy to blame others if you dont win, haha!
  • I think share of big companies like Google, Yahoo, and MSN is a little in such social media. I think they are earning (myspace) too much already so they don't care about others. It is the same as Technorati, I have been reading about their own advertising plans which were about to come and were in beta(I don't know if they announced it officially or not). Perhaps it is a caution for all others to do something better than those old conservatory ads.
  • Typical Google, complaining they aren't getting enough money!
  • Start shopping early
    in reference to google and the complaining they are doing. They really dont have much right to complain. In researching internet marketing and the why's and hows, I have found a few ” little secrets” of my own as to why they aren't making money. As a busines owner using ad words for example, after a months time I was paying roughly $100.00 per click, deepending on whether they wanted to turn off my key word until i paid a higher price. its rediculous that someone cant experience life in the world of social site marketing becuase they are coming up out of pocket just for one or two words.
  • Some reports have revealed that the main reason why social networks cant attract as much CPC is because the user is often focused on the task at hand and ignore the ads. If we look at search engines, those keywords that earn the most are ones that are related to transaction terms. User has an intention to transact, like buying property, buy car, etc. Therefore, for social networks to get more attention to their ads, the underlying principle is to align the user's intent with the ad's intent.
  • Myspace music is going to be a HUGE hit...trust me ;)
  • Great post. In my opinion Google to needs stop complaining, they are making plenty of money. I think a lot of the social networking sites like myspace and facebook are doing great in terms of the ads - they can target their audience so narrow for specific ads it only makes sense that they would see very high click throughs. Thanks for sharing.

    Cheers.
  • rockyou sounds like it could be a winner
  • I wouldn't rate them very high...
  • google is a beast... but there is plenty of room for the social new sites
  • Google man. Always trying to make more money. Hmm. I think about the money I have made on AdSense and then I think to myself, "Of that money, how much did Google make?" Too bad we don't get 100% of the revenue. ;)
  • nice post
  • nothing can be campared to google
  • Great post. In my assessment Google to needs stop complaining, they are authoritative affluence of money. I anticipate a lot of the amusing networking sites like myspace and facebook are accomplishing abundant in agreement of the ads - they can ambition their admirers so attenuated for specific ads it alone makes faculty that they would see actual top bang throughs. Thanks for sharing.
  • lovely info................
  • Clearly there are going to be a number of fortunes made in the social networking space, and regardless of the "how", advertising will be a main part of those fortunes. As the original post here points out, it's the how that will be the most interesting thing to follow.
  • I did not know that. That's crazy. Thanks!
  • (Gotta love the "I did not know that. That's crazy. Thanks!" comments! Don't they know this is going to get deleted? Geesh!)

    Sort of agree with that last "real" post from Industrial Journal. There are already fortunes being made online in social networking. And I'd venture to say that there are riches that are not being reported back to the community at large (vs. the standard P&L's that public companies are required to publish).

    Just my feeling, I could be wrong, but think that history would support my position on this one.
  • Poor Google - like they don't rake in enough millions every year already. If they don't like their slice of the pie they should get out and go back to improving their search engine algo. Sure they're the most popular SE but it's still not perfected by any means...

    Just my $.02... ;)
  • nice post
  • Tom
    I agree, myspace music should be a lot better than the advertisements. Judging by the ads I've seen the people who frequent myspace arent really going to click on them.
  • Google has got some nerve complaining about not making money online when they do everything in their power to destroy small business online. Having said that, I still love Google!
  • It is hard to believe that MySpace needs to figure out ad space when then are estimated to make one billion dollars. Evidently they have figured something out right. That kind of money online seems unreal when you figure how young they really are in business time.

    I have been online as long as they have been and I no way even come close to six figures.
  • such a shame that everything has to make money.
  • Great post. In my assessment Google to needs stop complaining,
  • no good times for google. today I read that google is about to shut some services down and even some developer centers will be closed too.
  • Well I am not sure why google is complaining about not making enough money on Myspace. They are still making money from myspace, and it is a great sales tool for their advertising publishers. Myspace could partner with another advertising firm if they wanted too. Google should be happy with their slice of the pie.
  • rolexwatches
    Thanks for posting, I truly enjoyed your most recent post. I think you should post more frequently, you clearly have talent for

    blogging! Rolex Air King.
  • I still find that advertising at social network is too expensive relative to the effectiveness. I definitely won't go there now.
  • google is always complaining about money
  • seoforums
    really dont know what they are worth, frankly i have been using social media to promote and shout my sites and products, and havent paid anything besides my time. so when they allow you to shout, why do you need a banner?
    Vin
    SEO Forums