February 19th, 2007

Social Networks take over the Internet (and other hype)

When I spoke on interactive marketing as a panelist recently at a socially-responsible investing industry conference, I focused on the tried and true tactics we make work for our clients month in and month out, including search and email marketing. These have worked for years and continue to do very well for many of our clients.

The conference organizers wanted panelist presentations to be plain-english, digestable and implementable by all attendees, including their sometimes less-than-marketing-savvy ones. So, I was a little surprised to have one of my co-panelists telling the audience to forget these kind of tactics and focus on the newest of the new media, especially social networks, because “this is where everything’s going!” The marketing media have occassionally echoed that hype.

We have been using and closely examining various social networks in the last several months because of their increasing popularity. Measured by statistics such as page views, the biggest social-networking sites, like MySpace and Facebook, now certainly rival the largest traditional sites on the Web, like Yahoo.

But there are still no best practices in running successful marketing campaigns on social networks — from our perspective and experience, the medium is too new and finding out what works takes time and money. We suspect that for direct response results, which the vast majority of our small and mid-size clients want, social networks will be hard-pressed to rival search and email — at least for some time. For branding purposes, they could be useful now and even more so in the near future.

Even as social-networking properties are making some gains in ad revenue, they still lag far behind more established sites. Part of the reason is that social networking traffic shows big differences from traditional portals. Unique audiences (page views) are smaller, and the number of page views per person tends to be much higher. Page views are thus less valuable from some advertisers’ perspectives.

While the social networks certainly sell advertising, it is the ability for an organization to interact with other network members where their greatest marketing value may lie. After all, social networks represent the technological expression of word-of-mouth, where people make connections to other people, entertainment and services in increasingly varied and interesting multi-media ways. And most of the online ad industry’s metrics don’t really measure that. These audiences may end up being, in some ways similar to bloggers and blog readers, “influentials,” who are thought leaders and/or brand ambassadors in their networks, who pass on information to colleagues, friends and families.

Just as the foundation ad unit of a portal is the banner, for a social-networking site it’s the profile page, an area devoted to one advertiser, and the ability to form interest groups. What those areas and group organization functions offer can be as varied as advertisers themselves, but what they share is a desire to integrate themselves into the social-networking environment.

Guayaki Yerba Mate’s and Coop America’s MySpace pages, for example, each have just over 300 “friends.” Guayaki’s MySpace in particular allows its friends to join its network; sign up for and read its blog; communicate by email, instant message or blog comments; view videos and slideshows, and more.

The push by social networks to monetize their unusual metrics could have even more resonance with smaller, special interest social networks. Care2 Connect and the newer Zaadz are examples of these in our environmentally- and socially-responsible niche. These social nets more directly reach the audience that represent our clients’ best customers and brand ambassadors, and could become useful tools in the direct marketing mix over time.

For more on social networks, see a recent Media Week article.