Wednesday, December 10, 2008
Individual Blog #5
Recession Affecting Online Social Networking
I would not have guessed that the recently downed market would have such a major impact on online social networks like MySpace and Facebook. I know that these websites make their money off of the advertisements that are run on these sites, but I guess that is the trend for just about any industry. Businesses are advertising less to conserve money, which I have to say is not a smart move. You have to spend money to make money.
If a potential consumer doesn't know that your product or service exists how the hell are they going to know to buy what you have? Online advertising especially is valuable. The younger generation feeds off of the Internet and social networking sites. And typically, the cost to run ads online is significantly less than any other medium so only a few people clicking through to your site and buying your product will have a quick return on investment. Not only is it quick to turn your spent money into a profit it is also highly targeted so that you get your message to a very precise audience with less chance of reaching too broad of an audience.
This is exactly why I am so surprised to see that MySpace's advertising income has dropped 22.5% in 2008 and Facebook's 20.8%. These companies are expecting an increase in 2009, but I personally think that the companies that were not running ads should have focused more on creating effective ads not running fewer ads. Just my thoughts.