Social media sites yet to capitalise on ad revenues
Despite the fact that social media sites are increasingly been viewed as prime host pages by advertisers, the majority are failing to capitalise on their new-found status, a new report claims.
Research from IDC claims that sites such as YouTube, MySpace and Facebook have yet to realise their potential as advertising media. Despite this, their revenues should rise to $1 billion this year, up from $400 million in 2006.
In the future they will use a mixture of business models, including advertising, subscriptions and e-commerce, to drive growth, the report says. But when attracting advertisers, social media sites will have to solve one difficult problem, according to IDC’s Karsten Weide.
"Social networks cannot guarantee a brand-safe environment. Advertisers don’t want to see their ads displayed alongside illicit content, for example," she comments.
"The dilemma for social networks is if they start to control what content users can post, they will lose popularity, which is what attracted advertisers in the first place."
