Ad Effectiveness Is Slowing Online Ad Market


Ning is no laggard: 1.3 million social networks ranging from the professional to the frivolous have been created using its site building tools. (By the way, that is a new number. Ning’s site still boasts 1 million.)

The company also has a post Web 2.0 business model: $24.95 a month will bring you a social network without the ads the company has traditionally relied on to make money.

Business oriented networks – perhaps one for accountants from Cleveland – appreciate Web pages without the ads – and are willing to pay.

But according to co-founder Gina Bianchini (she co-founded the site with Netscape wonder boy Marc Andreessen) it didn’t have to be this way.

Ads might have carried the load at Ning and social sites elsewhere if they had been more successful. In fact, the march of advertising from offline (think television and print) to online has been slowed by the lack of more effective marketing, Bianchini argued Thursday evening at a Churchill Club gathering in Mountain View.

“We need a new advertising unit” for 2009 and beyond, she said. “I think we are still figuring out what (that) advertising will look like.”

There is no lack of trying. Facebook has spent considerable energy in the past several years trying to evolve an ad model for its massive social network.

Just this week, Twitter released a best-practices document with suggestions on how businesses can use its micro-blogging property for their benefit. And earlier this month, Google said it is finally making some progress with You Tube, which has long resisted monetization.

Clearly, though, the final fix is not in. According to Bianchini, one key rule is authenticity. Brands need to be authentic in their appeal to people on social sites, she says.

In its 101 guide for businesses, Twitter also suggested companies need to provide value, perhaps a coupon or smattering of useful information.

Both are good pieces of advice. Advertisers also need to become part of the conversation and lose their identities as corporate marketing machines. It’s a big task. That is why it is taking so long.