Social Networks Lose Advertising Impact

There is an interesting article in Business Week on the decline in effectiveness of ads on myspace.  The article highlights a growing problem in the on-line advertising space, the diminishing ROI of on-line ads.  For those who follow the convergence of media, the evolution of technology and the advancement of the Internet – this should come as no surprise.

The fundamental problem with the on-line advertising model is that it is based on a one directional, on dimensional advertising concept developed for traditional media.  Is it surprising that customers continue to “tune out” advertising as highlighted in the article?

With Microsoft (and possibly Rupert Murdoch) attempting to purchase Yahoo, it is clear that there is still a great deal of evolution that needs to occur before the market finds a new equilibrium of how business communicate with consumers.  There is a great deal more change to come, and it will profoundly effect every company and organization.


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