Will Madison Avenue ever figure out social networks? Facebook, MySpace and the rest have plenty of page views and users, but have yet to figure out how to extract much value for them. MySpace is trying to use personal data on the networks to hyper-target ads, and the jury is still out on whether that’s working. Facebook thought it could get “friends” to market their favourite products to each other, but Beacon blew up in its face.
Ian Schafer, founder and CEO of interactive ad firm Deep Focus says things won’t change soon. SAI spoke to Schafer, best known for online campaigns for 20th Century Fox and HBO, about the social networks’ struggle to sync up with advertisers, and vice versa.
Silicon Alley Insider: It seems everyone believes social networks’ advertising potential is huge. So why have their recent attempts been so clumsy?
Ian Schafer: Advertisers don’t have a clear grasp of how to advertise in social media, and social media doesn’t know how to sell it. Consumers react differently to advertising in social environments, but big media buyers aren’t trained to think that way. Instead of buying reach or frequency they need to start with a blank slate and use media dollars to create engaging, positive experiences.
SAI: Facebook botched the introduction of Beacon, yet clearly Facebook must be ad-supported. How should they have handled it?
Schafer: They need to figure out how to strike the right balance between respecting a user’s privacy and making their experience on Facebook better. To me, what the social networking properties should have is a relationship expert or a user advocate who would also work with the advertisers. You need someone to be able to go in there and and help advertisers create lasting relationships with consumers. Facebook would reap benefits from a role like this.
SAI: Fox has been successful selling MySpace, but are they over-selling it?
Schafer: MySpace could do a better job of attracting long-term advertiser committments. Fox is their greatest asset and greatest liability. They’ve been content to just bring in the money in short bursts instead of explaining [to advertisers] why they should make long-term commitments to communities. What is their long-term social networking strategy? How do you keep a community activated over time? It’s a constant battle for attention; the best way to get attention is to constantly give people something to respond to and to make them feel listened-to.
SAI: So, what would a successful advertising relationship look like?
Schafer: Mattel had 500,000 people playing Scrabble on Facebook [via Scrabble ripoff Scrabulous, which it’s trying to shut down]. Don’t be surprised if Battleship, the Facebook application, is the next to get burned by litigious intellectual property holders. Why not just throw a bit ‘o money at the two chaps that built the app and claim it as their own, and maybe even improve on it? Why create malcontents out of passionate players? These should be your best customers. The beast should be fed, not put to sleep.
Business Insider Emails & Alerts
Site highlights each day to your inbox.