I think we past the point of looking at social networks as a fad right? I mean if fortune 100 companies are out there trying to figure out how to write blogs or engage in other forms of social media then we can pretty much agree that social networks are not going to disappear any time soon. But what about advertising? Along with the increased popularity of social networks comes the rise in advertising.
Look at the chart closely, notice how the estimate for advertisement spending in 2008 is 1.40 billion. This figure is supposed to go up by over 25% next year! and almost doubles since last year. So this raises an interesting question, how much advertising can we handle? I see plenty of advertising as it is, do I really need to see more? I’m already a bit annoyed with some of the continuous ads I see.
Right now social networks are very popular and attract millions of users a day. Let’s say these social networks start aggressively running advertisements, what do you think will happen to the number of users? My guess is that the number of users will go down, just take a look at what has happened to myspace, recently I mean they are pretty much a spam haven now! Their traffic has plummeted.
If ads continue to increase across social networks then users are going to diminish thus eventually killing of the social network itself or drastically reducing the amount of people that use it. Advertisements are becoming the plague of the online marketing world.
If companies spent their online advertising budgets on relationship building then they would have much higher conversion rates. It always amazes me how a company can throw millions of dollars each year on banner ads instead of trying to create spreadable content across channels such as youtube, twitter, facebook, etc.
Do you think that eventually companies will realize that advertising budgets are better spent on other things? or will the increased advertising spend trend continue?
Check out these articles on social network advertising:
Thanks for reading
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