Erik Qualman just released a „refresh“ of the socialnomics video published a few months ago. Since the numbers in social media developments are so quickly evolving, this refresh seems about time.
If you just want to see the numbers and stats, you can visit Eriks blogpost here. If you’re from outside the US, chances are that you might not be able to see the youtube-video due to music rights regulations in Europe.
(Note to Erik: Next time also publish a video without the music, which is the only reason for Youtube blocking the video).
In short: time spent on social networks is declining, for whatever reason – one could of course be increased advertising on these platforms. So this could be a problem for advertisers in the near future. Secondly: social networks need advertising, the same way media has always been ad supported.
But it’s not only the fact that user numbers are going down, ads on social networks are also less effective than on regular websites:
Many of the people who hang out on MySpace, Facebook, and other sites pay little to no attention to the ads because they’re more interested in kibitzing with their friends. Social networks have some of the lowest response rates on the Web, advertisers and ad placement firms say. Marketers say as few as 4 in 10,000 people who see their ads on social networking sites click on them, compared with 20 in 10,000 across the Web.
The solution to this is new targeting mechanisms, to serve users more relevant messages.
Last fall, both rolled out programs allowing marketers to pitch products to people in hundreds of categories of interest, such as fashion and sports. News Corp. President Peter Chernin said on Feb. 4 that response rates on MySpace improved as much as 300%.
Could be a solution. But at the end of the day, this whole approach still tries to use old answers to new problems. How about taking an approach that looks beyond plain advertising? How about introducing branded widgets, services, or exclusive whatevers to these platforms, so that brands can provide an added value to the interaction between users?
I am thinking of such things as the Red Bull Rosham Bull Challenge in facebook, which is a game that two users can play against each other. Or even just plain and simple things like the fact that you can sponsor digital gifts in facebook. There still is lots of potential for these kind of approaches.
Oh, and from a business model perspective: I don’t think social networks need advertising support. At least not to the extent that their business models are in danger if there is no proper ad solution in place.
Think about the German platform Xing.com. There you have a choice of paying a monthly premium for additional services – one of which is the fact that you don’t get to see any ads.
There could also be other models, like changing the business model slightly and starting e-commerce around certain product groups (i.e. certain information-based, digital products or even real products).
These problems are not really new. But what this whole discussion shows, is simply the fact that social networks have, all of a sudden, exposed the need for new marketing approaches much clearer than any of the previous developments on the web.
Pepsi always seems to play the big numbers in their promos. A few years back, they had a lottery for 1 billion dollars with a monkey doing the final draw (so I heard).
Now they started a cooperation with Amazon to offer 1 billion songs in 2008. The details of the promo will be announced during the superbowl. That should be interesting, especially since after the superbowl, there isn’t even a whole year left to give away these mp3s. It means that they will have to give a way more than 3,000,000 songs per day (roughly calculated for 300 days).
Considering the fact that iTunes sold 1.5 billion songs in the last few years, this truly is a big number. And it should resultin in an inflation of the mp3 market, lowering the value of digital songs in general. Don’t you think?