Social <> Advertising?

Interesting analysis by Catharine Taylor of the challenge of advertising in a social web context, arguing that "Maybe Advertising In Social Media Should Be An Oxymoron." She highlights the very engaging Dell ReGeneration campaign (current big brand on social site poster child), and an example from the other end of the spectrum: a hair loss cream ad running on Facebook.

I've seen those ads too. They are terrible. They don't seem to be using any of Facebook's Social Ad targeting parameters, especially if a woman is seeing them. Unfortunately, lousy, lazy advertising like this is being taken as evidence that effective advertising on social sites is not possible. Or worse yet, that Facebook's social ads platform doesn't work.

Here's the most optimistic reading possible of these lazy ads, in an effort to highlight the opportunity of social performance marketing that's currently being overlooked:

• these lousy ads mean the Social Ads platform is delivering cheap clicks to advertisers in a highly optimizable fashion. If these hair loss ads are running on a self-serve, PPC platform, maybe they are actually working for the advertiser. The clickthru rate may be 0.01% but with millions of impressions and cheap CPCs, the ad could be driving some decent ROI. What direct marketer would spend all that money on all those impressions with no return?
• maybe the ads appear lazy but are actually being targeted by age/gender or other targeting parameters. A non-lazy advertiser might start serving a single general ad to multiple audience segments, tracking costs and results to specific segments, and later honing in on the segments that work.

I agree with Taylor that advertising on a social network is fraught with peril. But hoping that we'll see a social network do for advertising on social sites what Google did with ads on search: make those ads so relevant that the ads actually enhance the user's experience. The platform is coming that will let advertisers target social users with incredibly relevant ads. The question is whether advertisers will put in the extra effort required.