Regular readers of this blog should know by now that one of my primary areas of research is currently around advertising in relation to things like social networks (here, here, and here) and YouTube (here and here). As you can see from my posts so far, I’m not really for or against it per se – and if anything the key finding is that it’s not a black & white issue. However, there does seem to be more and more people speaking out against the potential of advertisers leveraging social networks and user-generated content, and what they are saying points towards some interesting questions.

For example, today Dan Herman forwarded me this AdAge story where Ted McConnell, GM of interactive marketing and innovation at P&G, speaks out against it. Very early on he offers up an interesting quote:

“What in heaven’s name made you think you could monetize the real estate in which somebody is breaking up with their girlfriend?”

This statement really gets to the heart of what people are struggling with. They’re called social networks for a reason – people see them as a social space to interact with friends. In turn, is it an appropriate place for advertisers to try to engage with them?

But here’s where it’s not really cut and dry. Yes, some people do use Facebook to break-up with their girlfriend (or at least announce the break up to their network of friends if their privacy settings haven’t been changed). I think most people would agree that advertisers may want to tread lightly here. But it’s also a piece of real estate where, for example, many of my friends play games with each other – is it inappropriate for advertisers to engage here? And as I’ve noted in recent posts, not only have many Facebook users created self-organizing groups around particular brands, but often hundreds of thousands opt to join company-controlled fan pages for the same brands. Are such people not implicitly inviting companies to engage in this real-estate?

While there might be implications for the type of advertising that is appropriate, saying that all of the Facebook real estate is inappropriate for advertisers seems a bit off. For example, I would probably agree with him that buying a banner ad on Facebook isn’t the best idea right now… but there are many other current and potential options.

McConnell also digs into the issue of “consumer-generated media”. To quote him again:

“I think when we call it ‘consumer-generated media,’ we’re being predatory. Who said this is media? Media is something you can buy and sell. Media contains inventory. Media contains blank spaces. Consumers weren’t trying to generate media. They were trying to talk to somebody. So it just seems a bit arrogant. … We hijack their own conversations, their own thoughts and feelings, and try to monetize it.”

So let’s dig into this a bit. McConnell’s first “requirement” for defining media is “something you can buy and sell”, arguing that “consumer generated media” isn’t, in fact, media. But here’s the definition of media from Dictionary.com:

The means of communication, [such] as radio and television, newspapers, and magazines, that reach or influence people widely.

Now personally I would argue that this definition is out-dated due to the use of traditional examples. You can simply the definition to The means of communication that reach or influence people widely. I would also argue that consumer generated media can, but not always, fit this definition. As noted in the YouTube research, while the vast majority of consumer generated media is niche / long tail content hardly viewed by anybody, some of it does have great reach and influence.

But perhaps the bigger question is whether this adjusted definition is still flawed. Does an individual piece of content have to reach or influence a “wide” audience? And what is considered “wide”? Again, this definition developed at a time when a mixture of technology limitations and oligopoly industry models dictated that only a scarce few people could ever get their message out to more than an immediate circle of people that they spoke with regularly, so it worked quite well. That has changed. Should the definition of media change with it? Might a thousand people that each have an audience of a hundred more “influential” than one company reaching 100,000 people? And what is it that dictates these people don’t want to allow marketers to monetize the conversations, so long as they get a share?

Where I 100% agree with McConnell is in the notion that while marketing dollars will continue to flow online, it won’t necessarily be a boon for online publishers. He elegantly describes the reason as fragmentation thwarts artificial scarcity – online display inventory continues to grow faster than the demand for it. I would actually take this a step further – not only does fragmentation thwart artificial scarcity, but what we consider marketing to be is fundamentally changing.

As a great man once said, the medium is the message. Social networks and consumer-generated “media” represent a new medium where the message is one of collaboration and engagement. Traditional advertising models are built on broadcast messaging, a notion that things like banner ads try to carry over. But the importance of these is declining (because they don’t match the medium/ message), while the importance of companies actually engaging with customers (and leverage N-Fluence networks) is increasing. And what I think companies are going to increasingly find is they don’t neccesarily have to pay for this engagement – at least in terms of the CPMs and the like.