58 percent of nearly 800 users of social networking sites say that very few of the ads and offers they're currently seeing on social networking sites match their specific interests and preferences, and another 29 percent say none of them do, as reported in a recently released Prospectiv poll. Only 13 percent say that "most" ads meet their interests and preferences.
56 percent polled said the quality of their online experience would be improved if social networking sites provided more targeted advertisements and offers tailored to their specific interests and preferences.
According to the survey, consumers said the types of tailored ads and offers they would respond to are:
One-off coupons and discount offers from the brands and products they buy (62 percent)
E-newsletters featuring coupons, discounts, news and tips about favorite brands (24 percent)
Invitations to join interactive email groups, online forums and social networks for sharing and communicating (14 percent)
85 percent of consumers said they are more likely to join a free social networking site supported by advertisements and offers targeted to their interests rather than a paid social networking site without commercial advertisements. The report says that:
54 percent of consumers never click on advertisements on social networks
39 percent of consumers occasionally will respond to ads
7 percent will often respond to ads
Jere Doyle, Prospectiv's CEO, concludes that "... members of social networking sites are open to offers and promotions as long as they are targeted to their interests... the web publishing industry seeking to monetize their online communities (needs) to improve ad relevance..."
At the same time, a recent eMarketer study says that "Social networks... show some promise in developing new forms of online advertising. MySpace's HyperTargeting initiative, for example, has helped double CPMs at the site, and 75% of advertisers that have tried it have come back for more, according to News Corp..."
The eMarketer projections say that combined, MySpace and Facebook are expected to account for 72% of the total US social network ad spending pie this year. Spending at all other online social network sites, including general social networks, niche networks and marketer-created networks, is expected to reach $370 million, while widget and application ad spending is projected to rise to $40 million this year.
US Online Social Networking Ad Spending (Billion Dollars)
Social Network Ad Spend