Social Network Ads have crap CPM shlock horror

From the Experience triumphs over Hope dept:

Jason Calacanis points to a study that confirms what what we all knew, just that no social marketeer wanted to admit (some wilfully ignored in fact - do we need a blacklist for blogspammers?). Sez Jason:

Social networking sites are probably not going to figure out a way to insert advertising into people's conversations--just like message boards, chat rooms, and IM didn't.

We could have told him that (we did, actually - try here or here). Ever since we have been tracking online Advertising 3 years ago its been clear that its only sites with valuable content that get valuable advertising because (shock horror) they attract quality time from quality people. Serve schlock to schmucks and you make sch....

As the study Jason refers to notes:

"Among the verticals, Social Networking led the plunge with monetization dropping 47 percent, from 37 cents in March to 19 cents in April, below January lows of 22 cents. Entertainment monetization dropped 17 percent from 40 cents in March to 33 cents in April. Gaming and Sports were down marginally (4 percent and 5 percent, respectively). Technology remained relatively flat at 83 cents in April vs. 82 cents in March, but is still off January highs of 92 cents."

Note that small websites (hypothesis - those that target customers with more high-value content) get CPMs an order of magnitude higher - may only be a dollar odd, but thats better than $0.18!

No mention in the study, oddly, of the single most blindingly obvious reason for this state - too much inventory chasing too few Ads. While the number of pages to put Ads on grows exponentially, the number of Ads to fill them does not increase at anything like that rate (given that the overall internet using population is roughly static now) thus the value per page of the online massvertisers plummets.

Maths - strange subject I know, but you can't beat it.