Social Media threatens ad shop revenue

The Financial Times points out today the growing disruptive force that Social Media is becoming for advertising agencies around the world. The more media comes to be dominated by non-traditional publishing space, the less these ad agencies are going to be able to rely on traditional ad work to keep them up and running.

There are a couple of genius ads, of course, like the Cadbury Gorilla one mentioned in the article, but:

not enough agencies are adjusting to the online world, the IPA warned. In its worst-case scenario, the resulting decline in paid-for advertising space could see £16m ($23m) of revenues lost by the industry by 2016, if agencies fail to create new products and services to cater to the social media world.

The good news is that this is a problem on both ends: advertisers are looking to create new advertising products that work in a social media setting (and make them money), while at the same time social networks like Facebook are going to be scrambling to find effective ways to monetize their pageviews.

It seems likely that they’ll end up finding some answers in the middle, out of necessity if nothing else.