AdSense Failure: Social Networking Sites (MySpace + Facebook)
You have been working with MySpace for a while and to get a better sense of what you have learned, how monetizable these social networking sites are out there and as these social networking sites engagements are growing so quickly, are you concerned that that could be a point of entry on the web?The answer indicates the current failure of Google AdSense on these social networking sites as well as the potential for a new form of social advertising:
We’ve been very pleased with our partnership with MySpace. We’ve been pleased with the advertising performance. It has been a lot of work and innovation, actually. I know you might not see it from kind of a the user interface point of view that you see, but we are developing really new technologies and I think these social networks are going to require a different kind of targeting technologies, difference concepts of advertising.Ignoring the hype right now surrounding sites like MySpace and Facebook, the current model of contextual advertising simply doesn't work. Pages on these social networking sites have no unifying theme to match ads via contextual targeting. Any AdWords advertiser can see this by examining the new placement performance report. Consider this example:
We’ve already made big strides. It’s obviously a challenge because there is so much inventory, people can be distracted by very many different things and it is very personal, so there are a lot of things that make it hard.
But our technology, our targeting, all those things are actually coming along very well and we are really happy. We view it as a great opportunity. I mean, it is just so much more inventory that if done correctly can create that kind of win-win I was talking about between advertisers and users.
Note the massive amount of myspace.com impressions but the horrible CTR. Either MySpace users aren't interested in ads or the contextual targeting of the AdWords/AdSense system does not work on social networking sites. Perhaps both. Kara Swisher cuts through the Facebook hype with these insights:
Facebook is not Google: Although many in the tech sector make the comparison to the search giant, it is simply incorrect.Yep. AdSense doesn't work on MySpace. Note to all AdWords advertisers - you might want to block myspace.com via site exclusion.
Is Facebook like Yahoo a bit? Certainly. A newfangled version of AOL? Absolutely! A very well done media play with all sorts of interactive bells and whistles hanging off of it? Yes, ma’am.
Indeed, it is growing its media business nicely, with $30 million in profits on $150 million in revenue.
But in comparative terms to the search giant, Facebook is a lemonade stand. Google brought in $3.9 billion in revenue in just the second quarter alone and, um, is increasing its dominance over the search sector in a mighty scary way.
Facebook, on the other hand, gets half its annual revenue right now from a sweetheart guaranteed revenue deal with, drum roll, Microsoft. No matter what either Facebook or Microsoft says, it is a money-losing deal for Microsoft so far.
How do I know this? According to many sources, Google is struggling to make ends meet in its own sweetheart guaranteed ad deal with Facebook rival MySpace, which is much larger, and Google has the best monetization engine out there.
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Tags: adsense, google earnings, facebook, myspace, social networking sites, kara swisher, social advertising