Why Facebook and MySpace Stink for Ads

I wrote yesterday about the always-declining print ad pages and urged ad firms and clients to investigate online alternatives, but not every Internet outlet is optimal. Today there was a very smart article by Michael Estrin over at at iMedia, "Are advertisers killing Facebook?", which turned a skeptical eye towards social networks as good online advertising platforms:

Long the darlings of Silicon Valley, sites like MySpace and Facebook have presented the world with nothing short of a phenomenon -- and advertisers with the promise of a massive audience with members who are both highly engaged and quick to reveal personal details about themselves... Last month, The Economist ran a story on how social networks, which had received high praise from advertisers throughout 2007, still suffer from an inability to find a monetization model commensurate to their total number of page views. Google, too, has grumbled about social networks, and speculation has run rampant that the search giant is looking for a way out of its deal to sell inventory for MySpace.

At their core, social networks are closer to a telephone conversation or a meeting in a coffee house than reading a newspaper or watching TV. For Smith, that means sites like MySpace and Facebook are probably good places to deliver marketing messages, but not specific ads. Precisely what that means isn't certain, but according to Smith, social networks are in danger of being destroyed by salvos from Madison Ave.