Kara Swisher

Recent Posts by Kara Swisher

Social Networking's Advertising Dilemma: Which Came First, the Ad or the Consumer?

Another day, another article about how social-networking advertising has a steep uphill ride to get to any kind of decent pinnacle of profitability.

This time, it’s the New York Times’s Digital Domain columnist Randall Stross weighing in yesterday on the experiments going on between Facebook and the world’s largest advertiser, Procter & Gamble (PG).

Unfortunately, Stross did not appear to actually talk much to either party about the specific results, except to make his own nonscientific determination of two seemingly lackluster advertising efforts around P&G’s Tide and Crest brands on Facebook.

Thus, to my mind, the article represents the high-water mark of the Facebook-Is-Dead theme. This is characterized by the theme of the hot social-networking site running out of money and doing down rounds from its once-touted $15 billion valuation (a valuation that was fiction then and only more so in this weak economic environment).

That plot was, of course, preceded by the Facebook-Is-Immortal story, in which the start-up could do no wrong.

BoomTown did not buy the latter, as readers of this column will recall. But I certainly don’t accept the former either.

Instead, hopefully, we can now reset all our expectations and keep it simple: Facebook has impressive growth and terrific products, which everyone should admire.

Now, it and other sites like it have to come up with innovative ways to monetize their services.

And that is not impossible, as the article in the Times–which would surely trade Facebook’s challenges for its own in the ad market, I would guess–insinuates.

How does it arrive at this conclusion?

By referencing a sizzling quote last month by Ted McConnell, manager of interactive marketing and innovation at P&G, of course, who said at a conference: “I really don’t want to buy any more banner ads in Facebook” and also, “I don’t want to be best friends with a brand…It’s just stuff.”

Along with this less-than-smoking gun, the article also lists all the alleged problems of advertising in a social-networking environment, most of which are very old news for anyone paying even the slightest attention over the last year.

To wit: People on social networks like to hang with friends rather than brands; ads on member homepages are cheap, but no one looks at them anyway; to get people to pay attention, you need to fork over too much or do dumb prize contests; consumers are not interested in being brand ambassadors; and, of course, advertisers don’t like putting their brands next to possibly nutty user-generated content.

While a P&G spokesperson later told the Times it was committed to its “strong” Facebook relationship, Stross ended with this zinger: “When Facebook convinces advertisers to stage Super Bowl-sized entertainment every day, its future will be assured.”

Thanks for the heads-up, except the premise could not be further from what it will likely take for the Facebooks of the world to succeed.

Rather than think on these kinds of mass terms, the ad industry is going to have to get used to a much different paradigm if it wants to reach young consumers. It is a Twittery, SMS-rich, Super-Poking world, in which the message will have to be drastically changed to work.

And it is incumbent on Facebook and the ad industry to come up with new kinds of ad formats–yet uninvented–and new means of engagement.

Now, Facebook–which never met a buzzword it did not trot out too early–is using this “engagement” term to try to excite advertisers, which it should not do before such a thing actually works.

Instead, it has to slowly and quietly make inroads on a variety of fronts, much as Google (GOOG) did way back when it was not profitable, and then tout the results.

Until Facebook does that, though, expect more of the same it-won’t-work mentality across the landscape.

That is, until it does work, of course.

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There was a worry before I started this that I was going to burn every bridge I had. But I realize now that there are some bridges that are worth burning.

— Valleywag editor Sam Biddle