Advertising has become a multibillion dollar business on social networks, but Wired.com's John Abell wondered today whether the model is "sustainable."
Abell moderated a panel this morning at Advertising Week, so his remarks were probably intended to stir up conversation. He argued that there's a "social compact" on a site like Facebook—people get to use it for free thanks to advertising, but at the same time, as these sites become more ad-driven, they "no longer serve the consumer in that mythical way."
Barbarian Group CEO Benjamin Palmer agreed that if social networks "prioritize the advertisers over the users," they'll run into trouble, but he said that right now, the two groups seem to be "meeting in the middle." He also noted that there's a "game" aspect to the way brands can race each other to amass more fans on Facebook.
"It's all out there, it's all very public," he said.
Karl-Heinz Land, chief evangelist and senior vice president at MicroStrategy, added that social network ads can be useful for consumers, too. Rather than presenting someone with offers for a flood of products, brands can use social data to match everyone with the one offer that's best suited to them.
"Marketing becomes a concierge service," Land said.
Not all of the panelists were comfortable with that. Socialistic CEO Colleen DeCourcy argued that Land's suggestion doesn't take advantage of "the potential of the medium." Advertising isn't just about giving someone a soda when they want a soda, she said. Instead, it's supposed to create "meaning" and "culture."