Will social networks ever figure out how to make pay per click advertising work for them? An article by Janet Meiners sheds some light on the subject at Market Pilgrim.
I haven’t used SocialMedia Networks so I can’t speak to their offerings, but I agree with Janet that you have to figure out how to make your ads within the social network appealing to the users of those networks, who are more often than not turned off by the traditional display advertising model.
StumbleUpon seems to have done this well. For 5 cents per click, advertisers can target their advertising to particular groups or types of users. But you can also advertise by video on SU, not a unique idea but one that works for StumbleUpon.
One thing is for sure: If you are going to advertise on the social networks, you need to know your audience.
As an advertiser I love pay-per-action; especially when what I really want is for the searcher to take a specific action like signing up for a newsletter, requesting more information or buying something. Very nice; I pay only when the searcher gives me what I want.