In a special report on online ad Spending
and Usage, the market research group eMarketer effectively
demonstrates how social networking is not a fad. As reported,
the idea of a "social graph" of connections among
Internet users (i.e. the way people interact with one another
and spread messages through social networks, along with the
kinds of self-expression that social network sites make possible),
will remain an "Internet staple," in the years
to come.
In terms of online advertising and marketing, companies
have a lot to gain by investing in websites like MySpace
and Facebook, the current two "network giants." In
fact, with more marketers experimenting with this new medium,
worldwide online social network ad spending is projected
to jump from $1.2 billion in 2007 to $2.1 billion in 2008.
By 2011, it is projected to be at $4.1 billion.
How are marketers using social
networking?
When MySpace and Facebook announced plans last year that
they would deliver targeted advertising based on user profile
and purchase information, they moved social network marketing
into a new realm and pushed the envelope of online marketing.
Their promise to marketers?
That brand messages will spread "virally" among
network members via peer recommendations, becoming much more
effective by reaching a larger target audience.
MySpace's new Hyper-Targeting platform, for example, allows
marketers to target ads based on up to one thousand different
interests and hobbies that members describe in their profiles.
Already, it has reported click-through rates at 300 percent
higher. This is phenomenal compared to the fact that average
click rates across the web are 0.2 percent. (Source:
Eyeblaster)
By the end of 2007, more than 50 major marketers launched
campaigns using MySpace's new HyperTargeting platform.
Both Facebook and MySpace employ advertising that takes
advantage of the information that users share about themselves.
Both also have "self-serve" ad systems that allow
for any company to create and manage their own ad campaigns.
At Facebook, the number of ad campaigns is doubling quarter
over quarter, and the average spending for each campaign
is increasing 25% to 35%, said Mike Murphy, vice president
of media sales at Facebook, in an interview with eMarketer.
Facebook's innovative advertising service allows any business
to create their own branded page, for free. Businesses then
purchase targeted display ads to drive users who would be
interested in their service (based upon their interests,
purchases, and networks) back to their branded pages.
Facebook is placing its bets on the premise that consumers
will appreciate marketing messages more if they are somehow
connected, or "attached," to their friends. Its
advertising strategy may be risky - consumers could become
alienated if they perceive marketing messages as invading
their privacy - but it also stands to have a greater payoff.
As eMarketer aptly puts it: "Instead of ad messages
being pushed from marketers to consumers, consumers become
part of the message."
"Social networking sites have a precious commodity
on their hands, namely, the "thoughts, words, likes
and dislikes of millions of consumers." Respect, will
therefore be the watchwords for any form of marketing to
them," state authors of the report.
Although attention is primarily centered on Facebook and MySpace, eventually
social networking will extend beyond a single "destination site" such
as Facebook or MySpace, and gain reach into other areas of the Internet.
Profiles will eventually become portable. Consumers will need to create only
one profile and will be able to use it in many places on the Web. Likewise,
small applications that can be added to a user's profile (called "widgets")
will be designed to work with any number of website. So far, thousands of
these applications have been developed and are highly successful, and advertising
models are still in development stage.
The reality: social networking will remain an integral part of consumers' lives
in 2008 and well beyond. Marketing opportunities will therefore continue
to grow and change.
Although marketers seem to recognize the power of social
networking, they have been slow to engage with them, concludes
a 2007 report from public relations agency Manning Selvage & Lee.
Recent surveys studied in this report indicate that 16%
to 25% of US marketers use social network marketing. Among
these, more were likely to have used Web sites than they
were to have used social networking tools.
"Marketers who think that asking for consumer feedback
on a Web site represents cutting-edge new media tactics are
missing tremendous opportunities for their brands,"said
Mark Hess, global CEO of Manning Selvage & Lee.
Yet more and more marketers are including social networking sites in their
long-range planning. Among media and entertainment executives surveyed by
Accenture in early 2007, 38% said social network sites would be the most "attractive
area" for their online ad budgets over the next five years.
Overall, US Marketers invested $920 million in social network
advertising in 2007, followed by $170 million in Europe and
$100 million in the Asia-Pacific region. Canada spending
is estimated at $25 million, followed by Latin America at
$5 million.
Article Source:
eMarketer is "The First Place to Look" for market research and trend
analysis on Internet, e-business, online marketing, media and emerging technologies.
To learn more about subscriptions to eMarketer, call 800-405-0844 (outside
the U.S. and Canada, call 001-212-763-6010), or e-mail sales@emarketer.com.
|
