The underlying concept that you're struggling with is trust. Will people trust your new social media startup if it is monetized?

It seems odd that huge sites such as Google and Twitter don't display traditional banner advertising. Why don't these sites display ads?

The Answers:

1)
Will people trust your new social media startup if it is monetized?
Maybe - it depends on your site, your product, and importantly, your users. The bane of many new (and even old) online companies is that they think they "know" their users. They don't. The best that a CEO, developer, etc can hope for is to have a short glimpse of their users.

For this reason, it is important to use tools like Google's Website Optimizer to preform split testing. In short, tools like these will allow you to integrate ads into your website and show those changes to a small portion of your traffic. This allows you to carefully measure, analyze and maybe even survey how people react to these changes.

Every website is different and every combination of users is different. This is part of the reason why community building is so important. Specific to your advertising concerns, knowing that every website is different and that every group of users is different, you should understand that only through careful testing and analysis can you determine what people will think of advertising and how they will react to it.

2)
Why don't sites like Google and Twitter display ads?

For different reasons, there is an obvious lack of advertisements on Google, Twitter and a few other popular websites.

First off, Google does have ads... and they have lots of them. Their main page (google.com) only displays text link ads for Google's other products. They change these ads regularly (expect a Google Wave mention soon) but they only use their powerful index page to advertise their products and services. This is an effective method of self promotion and early on, allowed Google to differentiate itself from Yahoo, MSN, AOL, etc.

On the search engine result pages, Google displays large blocks of ads that people buy from them. They do accept banner and text ads but only as part of their AdSense program. Sometimes, folks say things like, "there aren't _any_ ads on Google" and that's just not right. Google is made up almost entirely of ads.

Twitter is a creative and interesting company. I say creative because right now, they're trying hard to define how their company implements advertising. Biz Stone commented that Twitter simply doesn't like banner advertising. They have this luxury because they are very well funded. A less vested company would have likely displayed banner ads long ago.

Beyond money, I think that Twitter is trying to redefine how advertising and monetization work. Twitter is one of the first websites to be wildly popular in both traditional and mobile spaces of the Internet. Since they have the luxury of money, it makes sense that they would carefully take their time to pioneer new and interesting ways to display ads. Remember that Google didn't become crazy rich until AdSense and AdWords were released.

3)
Some sources and more information.

This blog asked the question, "Do Advertisements Affect Traffic?"
http://traffikd.com/making-money/do-advertisements-affect-traffic/

The owner carefully monitored the success of ad placements over the course of a month by measuring new subscriptions. He concluded that there was no affect on subscriptions.

This webmaster wondered if placing ads on his site would effect not only his traffic, but the users perception of his site:
http://www.webmasterworld.com/webmaster/3984558.htm

Communityspark ran an article about this back in 2007. It is still relevant today:
http://www.communityspark.com/advertising-choices-affect-your-sites-credibility/

AdAge mentions why measuring only clicks isn't the only metric that you should measure when preforming tests such as split A/B:
http://adage.com/digital/article?article_id=134787

4)
Conclusion

• It might not be a bad idea to ask for the help of a front end designer with real experience in conversion marketing and lead generation
• Split A/B testing and care monitoring is very important.
• Don't rely on simple metrics such as clicks to determine user acceptance. Develop a combination of elements such as signups, downloads, navigation clicks, and ad clicks
• Online, people _expect_ to see ads so if you can "do it classy", your users won't think disparagingly of your startup. In all likelyhood, your traffic will not be negativley affected as long as the ads are appropriate and well implemented.

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