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BizReport : Social Marketing : October 19, 2007
Social networking sites hard to monetize
Making money from social networking sites could be a lot harder than imagined and would be a real turn-off for users, according to a new study by Parks Associates.
Almost three quarters (72 percent) of 18-25 year old users of social networking sites would discontinue using a site if a fee of just $2 was introduced, found the study titled “Digital Media Habits II”.
What consumers say and what they actually do aren’t always the same. For some, the websites are a second life and I would imagine it would take a hefty charge for them to abandon their daily habit and hundreds of online friends.
Forty percent said they would stop using the site if advertising was too heavy, posing a problem for site owners as this is currently the only way of monetizing social networking.
Apart from users aversion to intrusive advertising and subscription fees, social networking sites tend to attract a broad range of demographics making it harder to sell to advertisers. "Sites aren't able to sell a hodgepodge mix of consumers for very much," said John Barrett, director of research at Parks Associates.
"It's one size fits nobody."
Tags: monetization, social networking, targeted advertising
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