Wednesday, December 10, 2008

Social Media as an Ad Vehicle - "Is it working?"

Is Advertising On Social Networks Working

Posted on by dhirender

Even as traffic to social networks increases, a revenue model still seems to elude most of them.Advertising is pretty much what most social networks depend on, and it doesn’t seem to be working.

According to this eMarketer report, more than one-half of the US population surveyed uses social networking sites, but the ad dollars have not followed. More than 75% of social network site users logged in at least once a week and 57% did so daily. Moreover, more than 61% of those users spent more than 30 minutes per session on social network sites, and 38% remained parked for 1 hour or more.

However, only 57% of social network site users said they clicked on an ad in the past year, compared with 79% of all Internet consumers. Despite phenomenal growth, social networks have yet to reach online advertising nirvana—that heady place where behavioral targeting tools aim for specific groups with offers specially tailored to members’ interests. It’s a place where marketers are able to serve ads, promotions and offers to friends of friends based on a pal’s recommendation, and where word-of-mouth marketing spreads like a flu virus in January to create waves of self-selecting consumers eager to interact with marketers.

My Take

“Is Advertising On Social Networks Working?”

For some - yes.

It will work for every business when their social network IS their advertising.

Social media is growing due to its increased acceptance and its pervasiveness (mobile, etc.) As it replaces legacy media (print ads, Yellow Pages, etc.) it will replace advertising and become the
default form of search.

It will succeed over algorithmic “search engines” because it incorporates trust - not just ratings. It also supports affiliation and as such is a vehicle for involving the members in a relationship
with the service providers.