Posted by: Rob Hof on January 31, 2008
Social networking sites, at least in the U.S., are seeing a slowdown in both new members and time spent on the sites, according to numbers my colleague Spencer Ante got from comScore. Leaving aside whether comScore’s numbers represent reality, and the fact that they’re U.S.-only when most of these sites have lots or even majority overseas members, I’m wondering what the slowdown actually means. …
Is it Facebook and MySpace fatigue, as a lot of folks are saying? Maybe. I certainly find myself a little overwhelmed in trying to keep up with friends and other contacts on MyLinkedFaceTwitPownceNing.
On the other hand, I still use several of them on a daily basis. I'm just not fooling around on them as much. Honestly, I don't really want to be drawn even more into them, because I'm busy enough. But I guess that may make them less attractive to advertisers, so maybe it's a real concern, especially when you have a $15 billion valuation to live up to.
But Andrew Lipsman at Comscore also pointed out to my colleague Heather Green than fewer minutes of engagement is natural as social networks grow because newer members generally are lighter users. Maybe it takes new users awhile to learn the ropes and get engaged, or the newer users are people (older, employed, have a life) who have less time to spend on these sites. Either way, if that's the key factor, social networking fatigue, which would affect established users, wouldn't be the main cause for the numbers to fall.
Another colleague, Catherine Holahan, points out that ads themselves, or at least the widgets that ultimately are intended to carry advertising on sites like Facebook, could be turning people off. We certainly see that anecdotally in comments on our blog posts and stories on Facebook and other social networks. Again, not a good sign for advertisers.
In fact, I'm wondering if these visitor and engagement numbers may prove to be the least of the concerns of advertisers when it comes to considering social networking sites for marketing. So far, there's little evidence that they're very good places for ads of any kind (except widget companies advertising for other widgets). It seems like social sites will be challenged to match the buying intention indicated so clearly by people’s searches. In other words, Facebook isn't Google yet. For now, at least, that could be the bigger challenge for social networking sites than what their numbers are doing month to month.
Update: Indeed, on Google's conference call today, CFO George Reyes just said, "Social networking inventory is not monetizing as well as expected." In other words, Google couldn't find a good way to sell enough ads on MySpace. Jonathan Rosenberg, Google's senior VP of product management, says it hasn't yet been able to slice up all that inventory into useful demographic chunks. Whatever the reason, this is not good news for any social networking site.