It’s no secret that social networks, like Facebook and MySpace, have had a relatively tough time selling their inventory. Much of the discussion has been around advertiser skittishness and poor targeting, but a new study by IDC suggests there is something different about social network users themselves: they are simply less likely, compared to overall Web users, to respond to online ads.

At first blush, it looks like it’s a simple matter of social networks enjoying a lot of repeat traffic, which dilutes CTRs and eCPMs. However, the study states that only 57% of users of social networks have clicked on any online ad over the previous year, compared to 79% of the Web at large. Furthermore, ad click-throughs led to far fewer purchases among social network users: 11%, compared to 23% among the Web at large. This indicates that it is not a matter of the social networks themselves or the advertisers that use them, since, presumably, social network users used non-social networks as well, and simply didn’t respond to ads on those sites as much, either.

That different types of online users respond to online ads differently is not new: I wrote last year of a “natural-born clicker” profile that clicks on ads far more than the general online populace.  I suppose it’s no surprise that if there’s a group that clicks more than average, there’s probably a group that clicks less often. Pity it’s a group that is so large and spends so much time online.

Why do social network users respond less? Here are a few guesses of mine:

• Because they spend so much time online on a particular network, ad blindness is more likely to set in. They are far more likely to know where ads are placed, and to filter them out.
• Since social network traffic is of a browsing nature rather than a searching/information gathering one, users are more likely to find ads irrelevant or uninteresting than those reading content sites
• Within the sheltered confines of their social network gathering place, ads, whether targeted or not, might feel intrusive of users’ sense of privacy

IDC concludes that social network advertising will continue to underperform until social networks take on a more content-oriented dimension like portals like MSN and Yahoo. It appears simply building a platform where users communicate and share with each other might not be enough.

This entry was posted on Wednesday, November 26th, 2008 at 4:12 pm and is filed under Online Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.