I was recently asked by a reporter what I thought the chances were for Facebook, and other social sites, to monetize their assets through advertising. Here's what I said:
The real issue for anyone trying to make money from advertising is whether the ads are regarded as generally positive or as an intrusive – even creepy – nuisance.
Ads for offers someone genuinely might be interested in, that are funny or intriguing, or that provide genuinely useful information are typically quite welcome by consumers. What other rationale could there possibly be for the existence of channels like QVC??
The problem is that poorly targeted, dull, heavy-handed or as I said, even creepy, ads are far more often the norm. Facebook will never be able to monetize its reach and access if it can’t raise the game on the quality of the advertising on the site. Myself, I get wierded out when I get ads for “female consultant? Click here to learn the 7 secrets of..” or worse yet, “are you a woman business owner?”. It’s also tedious to be bombarded with ads for products one is not in the market for, that are a poor fit for what you do, or which are just plain completely irrelevant. The company that can change the business model of advertising from ‘throw it against the wall and see what sticks’ to ‘here’s information about what we do that you will actually welcome’ is the company that I suspect will do best at monetizing their social assets.