When last month Jupiter Research reported that many US brand managers were planning to advertise on social media sites in the next year, it was the fact that half of them were intending to do so that was so startling. For many people are uncertain whether social media can be used for advertising at all.
Social media has shot to prominence in the past year as a catch-all term encompassing blogging, video-sharing sites such as YouTube, and social networking sites such as MySpace, Bebo and FaceBook.
To take blogs and video sharing as examples, the models for advertising on these remain unclear – on blogs because there are so many of them and because most have a minuscule readership – and on video sharing because there simply aren’t enough ads to cope with the inventory that’s being created.
Social networking sites on the other hand have the traffic and crucially the desire to make money out of it.
Indeed according to recent figures MySpace, the giant in the sector, now has 166 million registered users, spending an average of 6.9 hours on the site a week. A few years ago old media companies, particularly US broadcasters, were forced to admit that young people had largely vanished from their radar. They’ve now turned up on social networking sites.
Of course all of this runs completely counter to the internet purists’ view. It wasn’t so long ago that the suggestion that social networking sites could be commercialised was dismissed by old Web hands. Their view was that as soon as the hand of business became visible, the users of such sites would just vanish to reappear on other sites unsullied by commerce.
That simply hasn’t happened, suggesting that the 18to 35-year-olds, who typically make up the audience for these sites, are much more comfortable with brands than the internet purists themselves.
In fact this is exactly the argument put forward by MySpace European senior vice-president of marketing and content Jamie Kantrowitz. She likens someone’s MySpace page to their bedroom, full of branded clothing and posters of favourite bands, films and cars. Brands, she says, are part of the way young people understand the world.
But it’s not quite that simple. For a start, as Kantrowitz herself acknowledges, there’s the question of control. Just as brands can’t control what someone does in their bedroom, they can’t control what they do on their MySpace page either. The brands that are having the most success on social networks are the ones that are allowing users to take the marketing collateral and use it the way they choose.
Another way to use social networking sites for marketing is to create a page for the property you’re promoting and persuade your target audience to link to it – in the jargon, to become its friends.
Sports brands such as Adidas and Nike have used this approach very successfully. But this throws up another issue for marketers. The only brands that seem able to use this approach are those that are cool enough to be accepted by the audience. And they have to be cool already. As Wal-Mart found to its cost, being willing to use this new medium isn’t enough to make you cool.
In truth it’s another manifestation of control. Media properties have always exerted control over which brands they allow to advertise with them to preserve the values of the property. With social networking sites the contest for control is much more Darwinian. If your brand isn’t cool it won’t get any friends and your efforts will fail. It’s the users who determine whose advertising survives on the site.
This was at the heart of a plea I heard at Microsoft’s strategic accounts summit in Redmond last spring. At a panel session on social networking one of the speakers, from an online insurance company, pointed out that he’d seen the opportunity back in the late 1990s. He’d launched an online business and, he said, successfully used online advertising. But now he was frustrated. “I know this social media stuff is the flavour of the month,” he declared, “but how do I use it to drive leads to my business?”
So is advertising on social networks open only to cool brands that are happy to give up control? Mark Charkin, Bebo head of sales for UK and Ireland, recently suggested a solution. According to him the secret for advertisers such as insurance companies is to provide “useful” advertising, something that by providing a service gets over the “cool” barrier.
There is another problem, however – one that last month’s Jupiter report highlighted. Research has shown that most online communities follow the same pattern. They consist of a small percentage of key influencers who lead the discussions, a slightly larger group who take part and disseminate the ideas, and a vast silent majority who just listen.
To really benefit from the power of social networks rather than just treating them as another media property, brands are going to have to target the influencers. And the more brands there are trying to do that, the tougher the competition is going to be.
Michael Nutley is editor-in-chief of New Media Age