Social Networking Site Advertising

A lot has been said about social networking sites being huge opportunities for advertisers. There is a captive audience who navigated to a particular website, and they spend countless hours meeting up with friends, sending messages to friends old and new, and building their own online homes. It would seem like a great place for advertisers to get their messages out and attempt to generate interest in their brand or product.
The social networking sites typically have the consumer base, and the advertisers wish to reach these consumers. The problem is converting these users to paying customers, and that might be harder than first imagined. I haven’t heard about or seen a very successful business model that is mutually beneficial for the website, the advertisers and the website’s visitors. I know there are countless people trying to monetize this traffic, but what happens if they can’t? I sure hope someone can identify a successful model integrating social networking and ad spend, because there is a lot of money banking on it.
For me, I am sticking to the “old fashioned” directory type of site. It will evolve with time, but I think there is still a place for it even in 2008 and beyond.

Elliot Silver
Elliot Silver
About The Author: Elliot Silver is an Internet entrepreneur and publisher of Elliot is also the founder and President of Top Notch Domains, LLC, a company that has closed eight figures in deals. Please read the Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest. Reach out to Elliot: Twitter | Facebook | LinkedIn
  1. I agree Elliot – it isn’t easy to sell someone a hotel room when they are looking at pictures of girls, or trying to see what their friends are up to.
    I prefer sites that are about a product, or that have a specific business objective for the consumer (find them a good restaurant, find them a rental car) – you can always sell that type of advertising.

  2. Agreed too. Social traffic is not the same as commercial traffic. We have yet to see a social site command valuable ad rates, unlike the generic stuff that gets around to target MySpace.
    Attention is getting tighter and tighter online as things speed up. And a business model that tries to steal the attention – as opposed to being *permitted* to use it – is not one I would bet on in the long term.

  3. Well said Elliot. I think that best case, advertising on social media sites may be useful “for brand awareness for some products and services”. This type of advertising is a long-term commitment to the chosen target group that needs repetition, consistency, and visitor engagement to effective at all. This type of campaign works much better when combined with other more “search” oriented strategies where visitors are more motivated and ready to purchase.
    A month or so ago you mentioned edirectory in one of your posts.. we are looking more and more at directory-based monetization. Have you used edirectory with success before? and if so how does it compare with custom-built directories in terms of costs vs. benefits?

  4. I used edirectory once for a project that didn’t take off, and I liked the guys there quite a bit – they did a lot of custom work for me and seemed pretty fair. I can’t compare it to anything else though.

  5. The problem with social networking sites is they are not targeted enough. They are general in nature, with no targeted traffic, No purity. Once companies discover how to segregate this traffic into seperate SNS, it is then that conversions will sky rocket and advertisers will get bang for their buck.
    For instance, should have different SNS platforms. One for dating, one for business, one for socializing, one for music, etc. Time consuming yes, but the rewards will be well worth it, and they will make much more on advertising revenue.
    Targeted Communities equal success. More to come on this topic in the months to come and experiments. The proof is always in the pudding.

  6. There are the kids that party and trash the house or the adults that have the Tupperware party. Which would you choose to make money? Having an open house with loads of people walking through will make your address popular but will not make you rich and you might get cleaned out.
    Many of our sites have qualified traffic that comes the first time, bites, makes us money, then leaves. There is always someone looking for what we offer that are new customers daily. Many do not come back until they are ready to buy again which may be a long time. Case in point is which has had a steady flow of people looking to start a daycare and also parents that are looking for daycare for their children. They bite once either finding that daycare for their child or there are the future operators that need to find material to start a facility. They are not going to be coming back again for some time. It does not matter that we have to keep them there but we always have that steady stream of quality new traffic that makes us money.
    The software we use is custom made for what our visitors need. Their needs are specific and stay within a few verticals. They find, buy and then leave. It’s a win win. I would rather have 25 buying Tupperware than 2000 just hanging out.
    A point could be made that is worth billions with millions socializing there for free. At some point they have to monetize that space. It will not be easy.

  7. Like every online business social sites succeed when they have a focus. And contrary to what domainers, microsoft and others think, the web doesn’t exist to serve ads. The best example is where millions of dollars in business have been transacted, and a billion industry spurred without a single ad or type-in of the generic nature where someone types in looking for info on Lowell or looking for information on day care.

  8. Michael,
    I love that example. My best two sites are the ugliest things you have ever seen (to the extent that I get lowball offers all the time because they think I am some kid in a basement with a crappo site).
    But these ugly sites have good information about product X followed by big prominent links to where to buy them. Time spent on the site is horrible, but my advertisers renew month after month.

  9. Hey Elliot..
    I believe the social networking business model is very different than many of us might think.
    I mean, it’s easy to understand why Michael is satisfied with a steady flow of visitors – especially since he and his advertisers can “guess” with some logical certainty why the visitors have come. This, of course, is the power of prime generic domain names.
    But it’s unreasonable to expect teens and young adults to type in or when they need to buy a watch or a pair of sneakers. They just aren’t as focused on their task as a parent trying to find daycare.
    If you can believe that, then you imagine the difficulty associated with grabbing the attention of teens and young adults today. So how DO you get them to stop and look at your product or service?
    You don’t.
    I believe you have to throw your advertising right in front of them at the exact time they want or need your product or service (or a competitor’s similar product or service). And of course, there’s currently only one way you can predict that type of thing with any certainty… That’s right, profiling!
    Sure, it’s illegal for the government to do it, but not for corporations trying to sell you shoes and a watch. It’s certainly not illegal for a website – especially if users have agreed to such terms of service.
    And of course, profiles are built from aggregate data. So, if you can build something kuel enough to get a cagillion people to hang around for long periods of time, then you have the ability to collect massive aggregate data. And remember, the more data you have, the more accurate your profiles will be.
    So… if you build an extremely popular social networking site and collect massive aggregate data, you can compile it, analyze it, filter it, and then sell it to your advertiser friends as complete user profiles – profiles with buying patterns that can be predicted with amazing accuracy.
    And let’s not forget “scale”. Looking back at Michael’s, I think he would agree that it could never scale into a facebook-sized behemoth. As he said, people go there, hook up with an advertiser and they’re good to go. If they move to a new area next year, you’ll see them again, but otherwise, they’re too busy to hang out with you at
    If you’re selling Kool-Aid in front of your house, a sign on the stand is probably good enough. But if you’re selling Pepsi globally, you need massive campaigns that interact with millions.
    Coming from a pre-Internet network-handyman background, I’ve never been excited enough about the math and science involved in profiling to be interested in competing in the arena. For me, the dynamic nature of the Internet made domain names the ideal tools for building on my creativity. But it is an interesting field.

  10. IMO, Nathan’s comment (#3) above is right on the money.
    However, in order to sell ‘branding’ or ‘brand awareness’ ads to potential advertisers, a social networking site would have to be addressing a specific niche interest, as Steve has mentioned at comment #6 above.
    Also, in all likelyhood, only major companies would be interested in spending on branding, so one will need a lot of traffic/large user base in order to attract such advertisers.
    Finally, ‘the social networking business model is very different than many of us might think’, as rightly said
    by ASN5 (comment #10).
    All in all, this is a pretty interesting thread, with some valuable comments.
    Cheers to all.

Leave a Reply

Recent Posts

How to Buy a Domain Name That is Owned by Someone

For a domain investor, buying a domain name is second nature. Investors hand register domain names, purchase domain names via expiry and private auctions,...

My 2023 Domain Industry PMC Jersey

For a number of years, I have created a domain industry Pan-Mass Challenge jersey to raise funds for Dana-Farber Cancer Institute. Many domain industry... Profitably Resold for 8 Figures

In March of this year, I reported on the sale of The domain name was acquired by HubSpot Co-Founder Dharmesh Shah for more...

First Look at my 2023 Domain Industry PMC Jersey

This August, I will be riding in my 10th Pan-Mass Challenge ride to raise funds for Dana-Farber Cancer Institute. I will be riding...

Just Add “The”

I went to the post office the other day to buy stamps. I had a brief conversation with the person working at the counter,...