Should there be advertising in social media?

There is a happy medium that needs to be reached when looking at a social media platform’s need to monetise and actually turn a profit and the end user who needs to be exposed to advertising in order to fund the social network they are socially invested in.

Revenue Generation
Each and every social network is largely out there for one reason and one reason only. To make great big bags of cash! Now most of the networks are doing this in much the same way — with sponsored PPC style advertising.

Looking at arguably three of the largest social networks there is a very similar pattern. Facebook has its ads which are served on the right hand side of the user’s profile page. Twitter has Promoted Tweets, Promoted Trends, and promoted Profiles. YouTube has its own mechanics of advertising either whilst the video loads or as a bar at the beginning of the video as well as a few others.

Each of these networks has its own advertising engines and mechanisms for how adverts are charged and targeted towards users. For example, Facebook ads are demographically targeted based on:

• Profile information.
• Group information.
• Recent comments and activity on Facebook.

As a user, should the above match with the criteria set by an advertiser then their ad will be triggered to show on your profile.

So where is the problem?
Social media, at its very core, is about conversation and interaction of people with people. Sharing ideas, knowledge and above all, experiences. Experiences with places, sights and sounds, but also with products and brands. Their conversation is free and unhindered by the social platform on which it is happening as there is no brand bias on the part of the platform. What I mean is that the conversations are not policed and edited to sway them towards the brands.

Should the brand have an interest in online and are employing online reputation management methods, then it will comment and share its side of the story, but largely the interactions are free and two-way conversations.

Advertising is not a two-way conversation.

Advertising is one way broadcast communication. Its purpose is to persuade the audience to take some action with the product, service or concept. Now the argument is that the advert can be there to persuade the audience to get involved in the conversation and to join the group to share their ideas and experiences; which I will buy in to. Unfortunately, by and large, advertising on social networks is not limited to this kind of interaction.

What do the numbers say?
When looking at the CTR (click-through ratio) of social media advertising, the numbers are incredibly low. There is a discussion board on Facebook discussing the low CTR’s experienced the numbers average between 0.02% and 0.05% (that’s zero point zero five). These numbers pale in comparison when looking at a Marketing Pilgrim article that quoted Google AdWords CTR with an average of around two percent.

Where is the balance?
I’m not sure if there really is a balance that can be struck. The underlying sentiment is that social networking platforms need to make money from their platforms; they have staff salaries to pay and yachts to buy. Their mechanism for doing this is to create a place where advertising can be sold. The more popular the network, the more potential advertisers this will excite and the more potential advertising can be sold.

What this does not necessarily correlate to is a better user experience for the average social media user; but that is the cross that we need to bear until such time as a new revenue stream can be created for our favourite social networking platforms. A new revenue stream that gets rid of traditional advertising jargon and methodologies that users can buy into and that truly gives them a better experience when engaging with brands online.