“…Half of the social media start-ups at Tuesday’s Under the Radar Conference won’t exist next year.” Full Story at CNET: “Social Media’s Uphill Advertising Climb.”

…That was the dour prediction of an advertising executive after a day of start-up presentations from a tongue-twisting list of tech companies–including Verismo, Mytopia, Loud3R, Jacked, Sometrics and PutPlace.

Not that the start-up pitches were boring or hard to swallow. It’s just that similar to the dot-com heyday (and eventual bust), the success of many social media companies is tied to online advertising spending. And guess what, after nearly 10 years of hand-wringing over Internet advertising models, traditional brands are still not spending the many millions of dollars online that they regularly do on TV commercials.

Even more relevant to social media is that traditional advertisers are especially cautious when it comes to the idea that their brand logo might appear next to an image of a marijuana leaf posted by a 16-year-old. Never mind that Facebook’s audience rivals that of some television networks.

“Take a look at history, and the way Web 1.0 worked…publishers didn’t make it until the ad dollars started to scale. The same mistakes are being made in the social media space today,” said Jeff Stiers, senior vice president of business growth for JWT, a major traditional advertising agency that was founded in 1864.

His skepticism–and hope for Internet advertising–was matched by other ad executives on the panel, which included Tom Bedecarre, CEO of digital advertising agency AKQA, and Chris Colborn, executive vice president of its rival R/GA. Internet companies must take the hand of traditional advertisers to get them to spend online, the executives said. But they agreed that there’s continued uncertainty in interactive advertising and reluctance on the part of big advertisers.