WPP's Sorrell Is Running Out of Patience With Social Media: No Ads? No Future
With Twitter conspicuously failing to unveil its new advertising model, WPP (WPPGY) CEO Martin Sorrell has poured cold water on the usefulness of social media for advertisers, suggesting that its personal nature may be "intrinsically" forbidding for brands.
He may be right. We're certainly in a social media bubble right now: While Twitter and Facebook look set for long-term survival, there's an irrational exuberance surrounding all the second-rung properties that crop up daily, like weeds on your lawn, such as Foursquare and Chat Roulette. And those are the bigger brands. Want to know just how many social media startups there are? Check this list on Wikipedia. Too many to count. With names like imeem, Ibibo, Itsmy and MOG, the whole sector seems to be screaming, "This was 1999!" (Disclosure: The war wounds still hurt -- check the last paragraph of this page).
Sorrell told India's Livemint:
... it's not a medium that really lends itself to commercial exploitation. And when you look at the times that people have tried to commercially exploit it, it's not always failed but often failed.
These are extremely powerful channels and new media. The more you try and invade it with commercial messages, the more at risk you are. Everyone is keen -- They get the hits and get the traffic but it's very difficult to monetize.
It may be intrinsically due to their personal nature; they are not media that lend themselves easily to what we're talking about.Sorrell went on to mention two recent social media flops that everyone thought would be huge, Second Life and MySpace. While the latter was enormous, it's in financial difficulty and traction for advertisers is limited:
The other thing is that a few years ago, we would have been talking about Second Life and virtual reality sites, but we aren't now. MySpace was obviously in a much stronger position, two or three years ago than it is now. So, there is going to be a lot of oscillation and a lot of it will be about fads. There will be a lot of volatility.He might also mention Tribester, Friendster, and my favorite, TheGlobe.com. I had an email account and a web page at TheGlobe in the mid 1990s. Everyone did. We used the chatrooms and all that stuff. It was, in essence, no different from Facebook or MySpace except for how inelegantly designed the whole thing was.
Look at TheGlobe now. It still exists ... as its own "in memoriam" page. There's a lesson in there somewhere.