It's not secret social networks have had a problem from the moment they appeared on the Internet scene, in that they offered everything for free, which created a wild west mentality among its users.
The results are so much garbage content, that on a large scale the networks may never attract big advertisers, according to analyst firm IDC, cited by vnunet.com.
Karsten Weide, program director for IDC's Digital Marketplace: Media and Entertainment says: "Social networks cannot guarantee a brand-safe environment. Advertisers do not want to see their ads displayed alongside illicit content, for example.
"The dilemma for social networks is that, if they start to control what content users can post, they will lose the popularity that attracted advertisers in the first place."
I think what MySpace is doing is probably the way general audience social networks will have to go. Niche social networks are actually positioned to take off as they are a known entity, and what they stand for is reflected throughout the network and content.
With MySpace, they're starting to create professional content channels or partner with professional content producers. It is there where their ad strategy is being put into action.
What does that mean? They are attempting to wean users off the amateur content onto the professional content in a way that won't alienate them. That's how they're trying to combat the dilemna Weide mentions above on concerns over "illicit content."
This could work because studies have shown people overall prefer professional versus amateur content.
Even recently we talked about YouTube is also introducing their overlay ads on professionally made content only.
It makes me wonder where the user-generated content will end up in the future. If it can't be monetized, it can only be used temporarily to gather people together. Once that happens, the costs prohibit the model to continue on.
The upcoming joint venture between News Corp. (NWS-A) and NBC Universal (GE)called Hulu is beginning to show more promise as it approaches its launch. If the two companies can work together over a period of time, they could have a goldmine of monetized content to offer advertisers looking to safely enter the online advertising space.
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