Devoted to online marketing, viral marketing, and web marketing

Continuing on from last post, we'll look a little deeper into whether targeted ads on social networks will increase their ad prices. 

The catch-22 for portal-type sites is if they try to get more niche, they cease being what they are and turn into something else. The Internet is no different than broadcast TV when cable came along. There will be niche channels and their will be general interest channels. Broadcast is general interest and cable is niche.

Web portals and social networking is the same thing. It doesn't matter what the flavor of the month is, whether MySpace, Facebook or whoever comes next: they're still general sites for a general purpose. Facebook decided to step out of being a niche when they changed into a general audience site. While their numbers of grown, the unique audience they served no longer exists. It won't matter what little gadgets and widgets they add, it's now just another form of a scaled audience attractor.

That's not bad or good, but it does define what it is to advertisers.

If prices go up at these notoriously low-priced social networking sites, what will their differentiation be? The answer is there won't be any (unless it's a niche social network). But the big ones will never be that.

The question that emerges is this: Will targeted ads take the place of niche web sites? I don't believe they ever will. That's why targeted ads are being pursued by the huge companies so badly though. They're hoping they'll nail niche interests of consumers in a general audience environment. They won't be able to do it.

This doesn't mean they won't attain some success, or get some areas where ad prices can be increased. But it probably won't be what the hype about it maintains.

I think the closer content is to a person's interests, the more likely they'll be interested in what advertisers have to offer.

To be just hopping around and interacting on social networks and then suddenly have an ad appear that happens to be connected to a customers interests, is no different to me than watching broadcast TV show and having a commercial come on that happens to be related to my specific interests.

Even if I'm interested in the product, it's still an annoyance to me. That doesn't go away. But if I was watching a show on building hot rods say, and a commercial comes on connected to that interest, I would be in that zone at the time, I would be more apt to watch and pay attention because it doesn't cut across my flow of thinking and what I'm currently processing.

I don't think in the end targeted advertising will be able to replace niche sites and niche-related advertising. There will of course always be a place for advertising general-use products to general audiences, but they'll never command the prices niche-related interests can.

Targeted advertising will be interesting and helpful, but I think niche sites will still draw the best ad prices over the long haul.