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It's still a work in progress, at least based on the middling experiences of Google, which is not accustomed to the middling of anything. As you may recall, Google cut a three-year contract to sell advertising space on Bev Hills-based MySpace, which is part of Fox Interactive, which is owned by News Corp. As part of the deal, Google is guaranteeing $900 million. Trouble is, Google doesn't appear to be generating enough ad revenue to cover those guaranteed payments. "We have had a challenge with social networking inventory as a whole and some of the monetization work we were doing there didn't pan out as well as we had hoped," Google co-founder Sergey Brin told analysts. Ad formats for YouTube, also owned by Google, also are proving difficult. To the graybeards among us, it's not a huge surprise; Advertisers have been slow to ramp up their social networking dollars because they don't know exactly what they'll be getting - or where they'll be next to. From the WSJ:
New Line Cinema created an ad campaign on YouTube last summer to promote its movie "Hairspray." While New Line found that the ads performed well, it has had a hard time finding enough relevant videos on YouTube where it could put its ads. Internet and media companies report that they are having success selling ads next to commercial video, such as television shows and clips. General Motors Corp. also has hesitated to run video ads next to videos uploaded by users. The auto maker is testing advertising on social-networking and online-video sites. But "when you're in a testing and learning phase, it doesn't lead to consistency in every campaign," says Curt Hecht, executive vice president and chief digital officer for GM Planworks and Starcom Mediavest Group. "That doesn't translate to ad spending or revenue."
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.