Advertisers Banking on Social Networking in 2008
If you look at all the hype around social networking, you might think that it’s a fad that will soon fade. Advertisers don’t think so. After seeing how many teens and adults (40%) in the US are on social networking sites, they are upping their budgets for the new year.
Last year, advertisers spent $920 million advertising on social networks. They plan to spend a lot more this year – 69 percent more, according to eMarketer – around $1.6 billion. It’s not expected to slow either. In the next four years the figure is expected to reach $2.7 billion.
Advertisers are still trying to see what works on popular sites like Facebook, MySpace and niche online social networks. In a report titled: Social Network Marketing: Ad Spending and Usage, author Debra Aho Williamson, points out that:
“In 2007, 37 percent of the US adult internet population and 70 percent of teens used online social networking at least once a month.”
Teens in the US are heavy social network users. eMarketer predicts that by 2011 some 84 percent teens who are online will visit a social networking site at least monthly. That adds up to about 17.7 million teens.
eMarketer predicts that by 2011 more than 85 million adults in the US who are online will be on social networks. That’s almost half of all adults online (or 49 percent). That’s pretty optimistic. They predict that most of that growth will come in 2008.
If you look outside the US, the numbers are also growing – 75% in this year alone. Starting at $1.2 billion in 2007 this is expected to reach $2.1 billion in 2008. Globally, social-network ad spending is expected to more than double over the next few years to over $4 billion in 2011.
A Love/Hate Relationship
Why do advertisers love social networks? They can easily get a lot of information about not only individual preferences but also your peer groups. You can target ads: by location, keywords, and interests. Another reason – people return to a social network (to interact) often. That means more chances to get your attention.
Advertisers also struggle with how to best market on social networks. People often ignor ads because they are on the site interact not buy. They don’t welcome being marketed to. Or worse, people find the ads obtrusive. Another issue is that the information people give may not be accurate. Many people make up information on their profile to protect their privacy online (and 31% do, according to one report).
The whole challenge of marketing to networks is that it’s tough to reach people in this context. Once you exploit a network it loses its appeal. A network’s value comes from its authenticity and from trust. Advertisers not only need to be transparent, they need to add value to the community (entertainment, fun, relevancy). It won’t work based on models of exploitation or mass marketing.
The truism of the web: people talking about you is far more effective than talking about yourself.
Here are some related posts on social network advertising:
Tips to Marketing on Facebook
Web 2.0 and Advertising: Do We See Eye to Eye? (be sure to watch the video with this post)
Nike+ a Lesson in Social Community Marketing