Advertisers Making Few Facebook Friends
Internet users are spending less time on social networking sites. Why? Because they are fed up with excessive advertising; although sites like Facebook and MySpace are still increasing their audience, the average time each user spends on the site is falling overall.
The average MySpace visitor now spends 203.9 minutes on the site each month, while Facebook visitors are logged in for an average 172.1 minutes. Though Facebook has had more 'online buzz', its users appear to be getting bored with the various applications. Meanwhile, MySpace has copied some of the more popular Facebook features, such as a news-type feed covering all events concerning a user's friends. (Source: mashable.com)
As for advertising, it seems the big marketing ambitions of some of the web's most powerful companies are proving less lucrative than anticipated. Although total ad spending on the sites is expected to rise from $1.2 billion to $2.1 billion next year, Business Week quotes several users who've abandoned the sites because there is too much advertising.
Statistics show that social networking users are a particularly poor target for ads. As little as 4 people actually click on the average ad for every 10,000 who see it, a response rate just a fifth of that for websites in general. (Source: businessweek.com)
Google signed a guaranteed $900 million deal to be the exclusive provider of adverts on MySpace, but admits the results are disappointing (There are rumors they have actually lost money on the deal thus far).
It seems sites will either have to switch to results-based ad sales (which means their income will be unpredictable) or do a better job of making sure adverts are targeted to individual users (which could boost the response rate). However, the risk is that making advertising more obtrusive or invasive could make users feel even more jaded about the sites.