This summary of the key marketing opportunities on social networking sites recently appeared in Catalogue & eBusiness magazine.
Social networking websites like Facebook and Myspace have been the focus of an almost unprecedented level of media attention. Partly this is to do with their incredible growth in traffic. For example, the latest Alexa statistics* for the UK shows Facebook as the third most popular website after Google and Yahoo! YouTube and Myspace come at eighth and ninth in the list and Bebo - the most popular social networking site for UK teens - is just outside the top ten in eleventh place.
Considering the relative youth of all these websites (Facebook for instance launched in February 2004; Bebo in January 2005) growth that rivals and often surpasses that of established portals like MSN and Yahoo! is genuinely breathtaking.
Social media sites will already be cropping up in the referrer logs of big sites as important contributors of web traffic. For instance, Hitwise research showed that topshop.co.uk now receives 2.5 times more traffic from MySpace than from Yahoo! and MSN Search combined.
So what's so special about social networking? At a simple level, all social networking sites are a set of applications that help users to map out and connect to people that they know. Many of the tools for doing this - like email, instant messaging, photo libraries - are very familiar - what is new is bringing them together in one place.
What really makes social networking sing is the ability to tag and share personal information like favourite books and films alongside digital assets like music, images and video. This makes it very easy to create connections amongst friends - and beyond this, groups naturally form around likes and dislikes.
These groups are already spontaneously forming around certain brands without any external 'kick'. For instance, Facebook now has over 200 groups associated with Pimms, some with many hundreds of members. These groups often seem to celebrate the notion of 'Pimms o'Clock' borrowed from Pimms' TV advertising which would please marketing departments. Less attractively, some groups feature animated discussions amongst members of the best supermarket own-label substitute for branded Pimms. Other activity is actively hostile to brands: the Facebook group "Fuck off Virgin Media I want my sky channels back" has 600+ members.
So regardless of whether brands take their marketing into social networks, their brands already exist here as they do within the non-virtual world. Which brings us nicely on to what brands could and should be doing on social networking sites.
The lack of control within social networks will concern many brands and companies. The recent controversy over big UK brands inadverently advertising on the pages of the British National Party on Facebook is almost bound to recur since Facebook seems unable or unwilling to remove content that breaches its own terms and conditions like the current group "Fuck Islam".
The code of conduct used to regulate network advertising is called IASH under which networks and publishers must certify that their sites do not contain inventory that includes hate content, obscenity, indecency, etc. Most social networking sites cannot guarantee 100% IASH compliance: instead they fall under "IASH Optional" which is a sub category created to cover primarily social networking, blogging and peer to peer networks, non of which can be policed effectively.
That said, most brands have overcome their reservations to this, attracted by the opportunity to engage with the massive user base of social networking sites.
From a conventional media point of view, the vast majority of display activity - banners, skyscrapers and the rest - is currently being bought on a non-targeted network basis. This is bound to change as advertisers wise up to the excellent targeting opportunities on these sites - most of which at a minimum offer effective targeting by age, sex and postcode. For example, Harvest Digital ran a recent campaign on behalf of Surrey Police using social networks to target teenagers within Surrey postcodes.
In the near future, we are likely to see contextual advertising along the lines of Google Adwords, where advertising is placed alongside relevant content. Almost inevitably this will lead to situations where a brand like Virgin Media will end up advertising on a community of Virgin Media haters - marketers will either need to hold their nose or take the pragmatic view that their brand message is reaching those most in need of it.
The majority of media spend in the short term will no doubt focus on conventional display advertising, but social networks also offer some unique ways to deliver marketing messages.
Bebo for instance offers advertisers a package of benefits, which would include hosting a brand page - which means that consumers can effectively 'make friends' with a brand just as they would with someone they met online. Normally a brand would make a range of digital assets available like music, photos, backgrounds and games. This is a popular approach with film companies who are now occasionally hosting their main film website within a network like Myspace rather than externally: Myspace now has its own cinema section at http://film.myspace.com/.
Content integration is another very interesting opportunity. For instance See Tickets has a tie in with the gig guide on music site Last.fm which allows users to click directly from news about a forthcoming concert directly to the ticketing site. The integration feels very natural from a user's point of view - almost as an additional piece of functionality rather than an advertiser's message.
More fashionable still is the current trend for Facebook Widgets. Facebook has opened up its platform to third party developers, allowing them to build applications that will run across the Facebook network. What's more, Facebook will share any potential revenues of any applications – making this a doubly attractive option.
A popular widget or application on Facebook is essentially 'seeded' across the network – you can see that your friends have added a widget and so are more likely to check it out for yourself. For instance, the "Where I've Been" tool is a simple map-based application which allows users to show on a globe all the countries they have travelled to. At time of writing, this application was being added by 700+ users per day – and rumours are that TripAdvisor has bought the application for a cool $3 million. TripAdvisor denied the story, but it's only a matter of time before a brand decides to buy into an established network of users rather than trying to build an application from scratch.
The most ambitious marketing programme in the UK so far is "Kate Modern" on Bebo. Inspired by, and created by the same team behind the cult hit "Lonelygirl15" on YouTube, "Kate Modern" is an ambitious attempt to create an interactive drama on Bebo.
The story advances through a series of 'webisodes' – short video clips posted by Kate and her friends. Kate and the other fictional characters appear on Bebo as 'real' people - so exploring each character's home page lets you see the drama enfolding from different perspectives.
At the same time, user input is encouraged. For example, a few weeks ago Kate suffered a blackout and appealed to her Bebo friends to identify her location from a handful of photos on her mobile phone. (Unsurprisingly she was 'lost' on Carnaby Street, just a few yards from Bebo's offices).
This feels like the online equivalent of a soap opera, so it shouldn't be too surprising that Bebo's commercial arrangements with sponsors sound like a TV deal. Bebo has signed up five principle sponsors (allegedly at £250,000 a time): Procter & Gamble, MSN, Orange Mobile, Paramount and Disney/Buena Vista. The sponsors are guaranteed prominent product placement within the webisodes: for instance, the camera phone is an Orange phone and characters arrange to visit the cinema on Orange Wednesday.
So where is this all going? Does this represent a marketing nirvana, where brands can interact with their customers at little or no cost?
My feeling is that the commercialisation of social media will come sooner rather than later. Facebook, even in its current state, has a market capitalization of $2bn – that will need to be justified at some point through revenue… and, as with Google, the advertising dollar is probably the most attractive and easiest to win.
Another question is what impact social media will have on other established digital channels. Email volumes must be under threat as users communicate using community tools rather than Hotmail or Yahoo! Mail. And even the mighty search properties may eventually be threatened by social search sites like Mahalo.com, which is using a combination of editors and users to hand-build search results pages for the 20,000 most popular search queries.
One thing is certain – social networking sites make the digital landscape more interesting and challenging for brands than it has ever been before. The rewards for brands that get it right are great – the pitfalls for brands that get it wrong are deeper than ever!
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