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The Social Web Economy: Advertising Professionals

Posted by Nick O'Neill on August 15th, 2008 10:48 AM

This is a continuation in the series on “The Social Web Economy“

In order for there to be an economy, there has to be money and advertisers are the ones that hold it. Advertising dollars are probably the most prized possession in the social web economy. Without it there is no business and all that remains is venture capital dollars. The advertisers spend money with four out of the five types of companies in the social web economy: agencies, ad networks, widget & application platforms, and media companies.

Advertising dollars are coming from two primary sources: advertising agencies and from brands directly. While some developers are paying other developers for installations, this amount should be considered negligible in the long-run. Advertisers are the life blood of the social web economy and it is one group of people who attract advertiser dollars: sales people.

So who are the advertising professionals working for? They work for the agencies and the brands. In the current economy they tend to be at the forefront of advertising when they invest advertising dollars in social media. One of the biggest challenges for these individuals is convincing traditional brands that they should be advertising in non-traditional channels (social media). Fortunately for these individuals, within the social web economy there isn’t much tension. Life is nice when you are the one that holds the money!

The primary challenge for advertising professionals is reporting back the results of social media and social networking campaigns. New metrics solutions are emerging to make this easier but the industry still struggles to quantify “engagement”. When you report to a brand that is used to spending money via the television, how do you explain advertising on Facebook’s news feed?

This is an industry wide challenge that all parties need to work together on improving.

Next post in series: “The Social Web Economy: Business Development and Sales People“

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    Nick, you hit the nail on the head - measurement, i.e. proof of impact on the metrics that have proven to move the sales needle are the biggest gating item for ad growth in this sector today. Rich media is not a bad parallel for thinking about how to measure engagement - they have their own metrics, however those metrics have become meaningful only because they are now correlated with results from brand studies. It's particularly challenging to conduct these studies in social media because the advertiser may not have a direct relationships with the site on which the ad is running, whether app or widget, and exposure is not one ad to one user. Addressing these challenges is part of the fun of figuring out a new landscape; things move quickly and we all just need to stay away from knee-jerk judgements and take the time needed to work through it all to get the info we need to mature the space.
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    Glad you posted this today about the advertising industry. I was gonna suggest u reach out to that group for the social network conference in NY. While I do enjoy learning about new tools and the latest start-ups, etc., the business side and where the cash flows are currently being decided are in the agencies. Thus, if at the conference, I would want to hear from the agencies, what their clients have to say, their experiences, success stories, etc. Jeremy Owyang just released a very helpful report on the best and worst of social networking that looked more on this side of social networking, rather than the developer side.

    Thanks Nick!

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