Week 6 - Advertisers Face Hurdles on Social Networking Sites

So here is another article that makes you question how companies are even making any money on the internet other than selling the tangible and intangible items. This article is old (end of 2008), but I have a feeling that Facebook still has the same issues. Advertisers want to be where the people are so that the people can see their product and want to buy it. People can very easily ignore the ads, especially on Facebook. The only advertisements I have seen on Facebook that are Facebook sponsored are the banner ads on the side. There is so much information on a single Facebook page, and users know where the important information is, so people can easily block out the ads.

I thought it was humorous when the NY Times article brought up the example how an 11-month Fan page campaign P&G was doing with Tide on Facebook generated only 18 submissions. It might have had many "fans" join for a contest or something, but there were only 16 (minus the P&G submissions) or even 15, or 14 (minus The Onion's submissions) for the actual campaign. I have definitely become a fan of a particular company or brand on Facebook just because of a drawing or a free give-away. It is effortless, but if I never remember to remove my fan status I continue to get emails from that company for future promotions, etc. Maybe the Facebook presence does work after all. In that scenario, the company theoretically didn't have to pay Facebook any advertising dollars to run that promotion. It sounds like the online advertising in social networking sites might be a highly debated topic in Marketing department for years to come.

Week 4 - Economics of Giving it Away

This is what the tech bubble of the late nineties was, right? I guess I was unaware of the major websites we have been discussing in this class having any financial problems. I thought because there was so much traffic on these websites and just about every website other than them having links to their sites (search through Google, Tweet this, add to your FaceBook page, etc.) that the advertisements alone would bring in the bacon. Well obviously Twitter doesn't have any ads on it, but it took me awhile to realize the Twitter doesn't have ads. I just assumed it did. I think Twitter should charge companies to have official company accounts. I mean it is great to see what is happening at your favorite companies, but they are getting the free publicity out of it. They are in business to make money and should help subsidize the rest of us freeloaders Tweeting.

When FaceBook launched awhile back (I think I joined in the end of 2003), I really thought it would be a college networking site and no more. Now that we have all these companies using FaceBook, and the like, as free advertising hubs, they should be subsidizing for the average user. I could see an argument for a site like FaceBook to start charging for application use, like the iPhone apps, but it probably isn't very likely because people are trained to get these for free. Plus a lot of the apps I see on Facebook are games and there are so many free gaming sites out there (my personal favorite is addictinggames.com).

Maybe we are just not there yet. Maybe television will be extinct as we know it in 5-10 years. I do enjoy Hulu. All these networks made billions by advertising, not by charging for their channel (OK well some of them do, but the big networks don't). Why would we even broadcast through the airwaves in the future, just stream everything via the web and have one place where everyone goes for their own tastes. Then the revenue dollars from advertising will be realized, and you would start seeing more subscription services (maybe even bundles for certain sites, like TV packages now). It is fun to speculate.