This is a continuation in the series “The Social Web Economy”
Social web agencies are the companies that help develop branded products on the social web. Currently large traditional media companies are the most prevalent organizations on social platforms and elsewhere on the social web but that is slowly beginning to change. These agencies specialize specifically on leveraging the distribution platforms for exposure and the product companies to purchase reach.
The social web agencies sell the development of a product and user exposure to those products as advertisements. This is because there is no way to guarantee that an application (product) is going to succeed in the long-run. In the best case an application will take off and maintain and active user base. How that works for the brand beyond their initial install buy will depend on how the contract between the agency and the brand was structured.
There are some fundamental challenges facing the social web agencies though including those suggested by Seth Goldstein this morning. When advertisers and brands are used to buying IAB-standard ads itÃ¢â‚¬â„¢s an uphill battle in convincing them to build custom, non-standard applications. Thankfully large brands and advertisers in general are willing to experiment.
The agencies have tension on two fronts: distribution platforms and ad networks. The reason for tension is that these companies are taking away ad buys directly from the platforms as well as the ad networks. While some agencies combine ad buys with development, there are many clients that simply seek the development of high quality applications.
That’s not to suggest that there isn’t enough room for all companies to exist but in many circumstances each company is offering an advertising option that can be substituted for the other.
Next in this series: “The Social Web Economy: Ad Networks & Sales Teams“