7 billio n almo st all o f this f ro m pay per click

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Unformatted text preview: o rk we were do ing [in so cial media] didn’t pan o ut as well as we had ho ped.”“Everywhere and No where,” Eco no mist, March 19, 2008. GM pulled a $ 10 millio n acco unt f ro m Facebo o k just days bef o re the so cial netwo rk’s IP O, claiming that paid advertising o n the netwo rk was simply no t ef f ective.J. Muller, “GM Says Facebo o k Ads Do n’t Wo rk, P ulls $ 10 Millio n Ad Acco unt,” Fo rbes, May 15, 2012. Why has advertising o n so cial netwo rking sites been such a to ugh nut f o r so me to crack? Firms f ace two key challenges: cont ent adjacency and user attentio n. The co ntent adjacency pro blem ref ers to co ncern o ver where a f irm’s advertisements will run. Co nsider all o f the questio nable titles in so cial netwo rking news gro ups. Do advertisers really want their ads running alo ngside co nversatio ns that are racy, o f f ensive, illegal, o r that may even mo ck their pro ducts? This po tential juxtapo sitio n is a majo r pro blem with any site o f f ering ads adjacent to f ree-f o rm so cial media. Summing up industry wariness, o ne P ro cter & Gamble manager said, “What in heaven’s name made yo u think yo u co uld mo netize the real estate in which so mebo dy is breaking up with their girlf riend?”B. Sto ne, “Facebo o k Aims to Extends Its Reach acro ss Web,” New Yo rk Times, December 1, 2008. An IDC repo rt suggests that it’s because o f co ntent adjacency that “brand advertisers largely co nsider user-generated co ntent as lo w-quality, brand-unsaf e invento ry” f o r running ads.R. Stro ss, “Advertisers Face Hurdles o n So cial Netwo rking Sites,” New Yo rk Times, December 14, 2008. No w let’s lo o k at the user attentio n pro blem. Attention Challenges: The Hunt Versus The Hike In terms o f revenue mo del, Facebo o k is radically dif f erent f ro m Go o gle and the high-value catego ry o f search advertising. Users o f Go o gle and o ther search sites are o n a hunt—a task-o riented expeditio n to co llect inf o rmatio n that will d...
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