People Won’t Pay To Use Social Networking Sites

    October 18, 2007

Not many people are interested in paying a fee to use social networking sites, according to Digital Media Habits II, a new survey from market research company Parks Associates.

The online survey of Internet users found that 72 percent of social networking users would quit using a site if they were required to pay a $2 monthly fee. Close to 40 percent of survey respondents said they would stop visiting a site if it carried too many advertisements.

Parks Associates says the findings create a challenge to companies in the social networking space. The firm found 80 percent of broadband users ages 18-25 use social networking sites on a monthly basis, but monetizing these users can be difficult.

"Having a big base of loyal users is not enough," said John Barrett, director of research at Parks Associates. To really succeed he said that social networking sites have to consistently offer advertisers a desirable consumer demographic, hopefully when they are about to make a purchase decision. For instance a site that is focused on musical instruments offers clear advertising opportunities while sites that are too broad in scope cannot command a premium.

"Sites aren’t able to sell a hodgepodge mix of consumers for very much," Barrett said. "It’s one size fits nobody."