Despite social media being the biggest buzz topic this year, 2009 is not going to be easy. Yet another study says the amount of advertising revenue these sites were expected to pull in is going to sink.Emarketer says the social media phenomenon will continue to grow, but not the revenues being generated. It is almost a cause and effect scenario. People have been commenting all year that sites like Facebook and Twitter are exciting and offer new opportunities, but do not pull in the revenues.EMarketer has revised its projections for US social network ad spending down for 2008 from $1.4bn to $1.2bn.But its 2009 downward revision is much greater, from $1.8bn to $1.3bn - barely any increase on 2008. The two factors that have caused this to happen are slower-than-expected revenue growth at MySpace (still the big daddy in the US) and the recession. eMarketer has revised its forecast for MySpace and Facebook down. It had previously predicted that MySpace would bring in $755m in US adspending in 2008, but it has cut that by a whopping 22.5% to $585m. It has opted for a similar large cut at Facebook saying it will bring in 20.8% less than thought - $210m instead of $265m.It is really difficult to say what impact this will have on marketers. Experimentation in marketing can often be the first casualty when budgets are cut. Clearly this is even more correct when you have an area of the digital space such as social media that has yet to prove itself in a commercial sense. That said eMarketer senior analyst Debra Aho Williamson is warning marketers not to write off social networks completely."In a difficult economy it is usually easier to market to an existing customer than to acquire a new one. With a relatively small investment, companies can use social networks to cultivate relationships with customers who have already raised their hand and expressed interest in their brand or product."The eMarketer report follows one last month by IDC (U.S. Consumer Online Attitudes Survey Results Part III), that was critical of marketers' efforts in social media (it called them "stillborn"). Harsh, but there are plenty of stillborn efforts out there that have simply been abandoned, such as blogs that were started but failed to get traction and communities that were launched but did not have any errr community?In a way the problem is at both ends of the equation. Marketers are still not totally sure what they are doing or are going to do or how they are going to successfully work with these sites (or exploit the medium themselves) and social networking sites have yet to reach their destination in terms of defining themselves: what they are and what they offer.Maybe it does come back to the debate about how you can monetize someone's chitchat and social life? And, ahem, then there is the fact that not enough people click on ads. That was the message recently from Procter & Gamble's head of marketing, Ted McConnell, who said companies should not advertise on Facebook, saying social networks have no right to monetise their customer's conversations and that it is "arrogant" to monetise social networking platforms.Well tell Facebook and MySpace about it - they have enormous amounts of advertising inventory but have had a hard time selling it.In its report IDC said the way forward for social networking sites was to become more like portals, which suggests services like Facebook need to bolt on additional attractions. Does that mean services like Twitter? Twitter spurned it once, but a deal could still be done.At this rate Facebook could snap up what's left of Yahoo! and bolt its entire service on to a larger portal. There is also talk of Facebook launching some kind of TV channel. MySpace with its music offering is well on the way to doing something similar in owning that space.
Follow me on Twitter
I think one of the challenges facing new media opportunities like social media is they tend to get carried away with their own numbers. They need a more rounded perspective and better understand where they fit within the marketing mix.
For example, I hear social media campaigns proudly boasting of "55,000" content users in the first two weeks". All very good but only in the most highly targeted campaigns does it represent an impactful scale.
Social media needs to see itself not within the digital mix but within the wider marketing mix, it needs to demonstrate it's scale and it needs to prove it with reliable data.
The opportunity social media provides is targeting relevance and engagement. The way the channel is presented and positioned needs to focus not on the touchy feely fluff but on the ability to scale it and deliver the competitive numbers.
Would be interested to hear other views.
I think most of the problem is focused around a misunderstanding of what social media is - most people I speak to think it is social networks and "getting a Facebook group" or advertising on one of the networks is "job done" - the sooner that Clients (and perhaps more importantly agencies) realise that it should be an integral part of the planning of any campaign or comms activity the sooner it will not be viewed as a seperate channel or challenge. After all surely the holy grail of any marketing campaign is to create WOM and social media in its broadest sense is about exactly that.!
Gordon Macmillan
Blogging for:
Member since: 03 Jun 2008
Last login: 26 Nov 2009
Total Posts: 1,627
