Blitz Magazine: On the Business of Media Communications

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Online Social Networking Gets Down to Business

Online social networking: by far, it has been the biggest marketing buzz term over the past couple of years. It seems that every speaking event, every conference, every webinar, and every marketing publication is making an attempt to understand this relatively new and unbelievably pervasive phenomenon. All marketers know that they need to consider this in their upcoming marketing strategies, planning, and execution, but many are left scratching their heads about how best to take advantage of the phenomenon. We’re curious too. To help marketers navigate these uncharted waters, Ipsos Reid created a special feature in our quarterly Ipsos Canadian Inter@ctive Reid Report to track activities, behaviour and attitudes of online Canadians.

First off, it’s important to understand the scope and size of the market. If we define this activity at the broadest level, then participation is nearly as universal as Internet access itself. Three-quarters of adult Internet users in Canada have participated in activities such as browsing online social networking sites, connecting with lost friends, participating in live chat, playing computer games live with friends or strangers, participating in forums/blogs, and other Internet activities that would classify in the broad- reaching category of social networking.

What is equally, if not more, significant is that the research shows that online socializing has captured a significant share of Internet browsing time – according to our estimates, as much as 50% of the average 18 hours per week that people spend online is spent on some form of social networking sites, including a significant number of ‘work’ hours. Consumers also rate these activities as being very important in their lives for connecting with friends, and as a meaningful part of their social lives. The scary thing is to think of all the more ‘marketing-friendly’ activities that this has displaced (online searching for news, sports, movies, health, travel, banking, etc.).

If we take a narrower, more defined approach to understanding who is participating in social networking, the numbers become a bit more manageable. As of Q2-2007, 45% of online Canadians have visited an online social network or community such as Facebook, MySpace, Classmates, etc., and slightly more than three-in-ten have placed a personal profile on one of these sites. These numbers increase significantly among younger age groups; two-thirds of 18 to 34 year olds have visited social networking sites, compared to only three-in-ten for 35 to 54 year olds, and just 20% of those 55 or older, with no significant gender differences within each age group. In a separate Ipsos-Reid report  (Inter@ctive Teens) conducted with over 2,300 online teens at the end of 2007, we found that 62% of teens had visited an online social network.  Aside from the youth component, our research has also shown that this market is attractive from the standpoint that these individuals are significantly more likely to shop online, buy online, click ads, and sign-up to receive permission-based email marketing.

So we’ve established that the market for online socializing is huge, and demographically and behaviourally attractive, but how does a company tap into this market? Other than the obvious banner ad purchases/sponsorships and other forms of online advertising, marketers are rather limited in how they can take advantage of this medium, and there are significant challenges to this approach.

Firstly, and probably the largest difficulty with this particular medium is the frame of mind consumers are in when participating in social networking activities. People are not very receptive to traditional marketing approaches in these social settings. It’s like the realtor who shows up at a Saturday night party, drink in one hand, and on the other, a stack of business cards, interrupting conversations and handing them out. It’s simply regarded as being inappropriate. As consumers, we are ‘used to’ being marketed to when we go to search for products and services online, or when we are browsing financial websites, looking up our favourite health/lifestyle sites, or checking out vacation destinations. But when we are talking to friends, we aren’t exactly in the frame of mind to stop what we are doing to check out the latest banner ad that sends you to a website to buy something. This poses a significant problem, to the point where many marketers have questioned the efficacy and ROI of traditional online advertising approaches on these sites.

Secondly, the choices that exist for marketers are relatively limited in this space. You have the Pacific Ocean, Atlantic Ocean, or a fish-tank to choose from.  Unlike the other 60 to 80 or so online activities that we have tracked over a 15-year period with our Inter@ctive Reid Report, online social networking is characterized by a few very dominant players – 28% of online social networkers pick Facebook as their favourite site, 24% choose MSN/MSN Messenger. After that, the choices are rather thin, Yahoo! is chosen by 8% as their favourite, followed by Pogo (4%), and less than 2% choose other sites such as Classmates, MySpace, or Plentyoffish. After that, the market becomes extremely fractured, with over 25% of Canadians mentioning niche sites that attract less than 1% of mentions as ‘favourites’. 

On the bright side, as marketers, we can learn a great deal about the types of activities people like to participate in when social networking. Those ideas can be incorporated into our traditional marketing approaches via our websites, our mainstream advertising approaches, and ideally, integrated campaigns that cross traditional and digital boundaries. Things like the ability to customize individual consumer choices, the ability for consumers to provide immediate feedback on product and service offers, the ability to exchange ideas with other consumers who are similar to themselves, and quick, interactive activities such as quick polls, interactive games, choice-based exercises, surveys, and the like. Many campaigns have gone as far as to give consumers choices about how the marketing message is actually delivered to them by having them pick alternate story lines or outcomes in the actual campaign, or the actual offer or call to action.

What is probably the most significant and fundamental lesson that marketers can take away from online social networking is that the marketing landscape has been forever altered by these tools. Gone is the one-way communication; the ‘smack you over the head’ with the singular message driven by what marketers want you to hear. We have entered the new marketing reality – the true one-to-one marketing approach that takes into account a very customizable offer where consumers have considerable choice in the way they not only want the message delivered, but in the way they are able to customize their own consumer choices as it relates to how they receive and process your brand, and your products and services.

Steve Mossop is President of Market Research Canada West within Ipsos Reid (Vancouver).

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