Businesses need to formulate new ways of making money from social networking as research has suggested that traditional ads do not work on the platform, it has been advised.
According to a new study by IDC, while usage of social networking services is increasing among the US internet population, ads on such sites have a lower click-through rate than those on other websites.
Social networking ads were also found to have a lower conversion rate compared with traditional ads elsewhere on the web.
IDC suggested that publishers need to get social networking users to do more than simply communicate with each other in order to find a viable revenue model.
"If the major services succeed in doing so, they will become more like portals, such as Yahoo! or MSN, and they will come closer to the audience reach of the top services," it said in a statement.
A recent survey by the Association of National Advertisers revealed that 28 percent of marketers believed social media integration would offer the biggest brand growth opportunities in 2009.