The Failure of Advertisers in Social Networks

Posted on October 29, 2007. Filed under: blog, Social Network, Web 2.0 |

There has of course been alot of buzz about social networking. Cyber-bullying, child safety, personal information security, and the lot have all been hot subjects among consumers. For Big Business there has been one subject that has dominated conversation: How do we leverage social networks to make money. From an objective standpoint no one can blame companies for wanting to make money, otherwise we couldn’t check out <a href=”http://www.facebook.com”>Facebook</a&gt; email on our <a href=”http://www.apple.com/iphone/”>iPhones</a&gt;, or download the latest Justin Timberlake video to our laptops because we wouldn’t have jobs. From a subjective stand point, we don’t want a bunch of ads popping up all over our screen while we’re looking for nacho recipes for our Labor Day party.

There is no way that the medium of Social Networks will be able to avoid corporate intrusion. Radio was invented to entertain listeners between product ads, TV followed suit, and so has the Internet, all of it, for years. After all, you can’t get something for nothing right?

Much to the cheers of social butterflies, companies are having a tough time marketing online and to social networks in particular (<a href=”http://www.vnunet.com/vnunet/news/2196857/traditional-marketing-failing-social-networks”>VNUNET, Aug, 2007</a>). <a href=”http://www.alleyinsider.com/2007/08/confirmed-web-u.html”>The Silicon Alley Insider</a> recently published an article showing how web users avoid eye contact with online ads. Based on research from the Nielsen Norman Group’s recent <a href=”http://www.useit.com/eyetracking/”>eye-tracking usability study</a>, users gravitate toward content, no matter how flashy the ads are. While other <a href=”http://www.asiresearch.com”>studies</a&gt; have found that video ads get 34% more brand recall, my guess is that as those ad types begin to become ubiquitous, they will suffer the same fate as graphic and text ads. One promising statistic is that ads appear to do better if they are related to the content.

One argument may be that ads need to look more like content, to trick viewers, but I think the data so far leads to a bigger concern: the ability of marketers to keep up with consumer habits.

Many of us Internet geeks were very excited about the popularity of <a href=”http://www.secondlife.com”>Second Life</a>. Millions of people were joining, you could fly, build things. Then big companies started to market in the virtual world. Some expected it, others felt threatened. An interesting thing happened. Most didn’t care. No one visited big business’ stores or islands. Companies who were experimenting there started pulling out. Wired Magazine claimed that <a href=”http://www.secondlife.com”>Second Life</a> was dead. Really? Dead to who? The 9+ million users? The 1.5 million who have logged in over the last 2 months? What on earth does this have to do with banner ads Durwin? Well…

What happened to <a href=”http://www.secondlife.com”>Second Life</a> is that big business and advertisers left. Why? Because their tactics didn’t work. Why are banner ads failing? Because the tactic doesn’t work. Why will making ads look like content fail? Because the tactic won’t work.

The concept of consumer-driven advertising is a tough thing for most advertisers to swallow. For decades advertising has been about telling the consumer or user what to buy, where to shop, who to listen to. With so many choices, and the Internet as a “shop and compare” tool, consumers are no longer just buying what they’re told to. They are asking questions, they are demanding improvements, they are looking for options. According to a recent survey from the <a href=”http://www.centerformediaresearch.com/cfmr_brief.cfm?fnl=070827″>Center For Media Research</a>, 70% of mothers use search engines before making an online purchase and 57% do the same for offline purchases. People aren’t just surfing company web sites and online stores though. They are joining forums and reading blogs, they are talking to regular people about their experiences with products and brands.

In short, they are choosing how they receive information on products.

This effects social and virtual networks in the same way. In <a href=”http://www.secondlife.com”>Second Life</a> for example, why would avatars that can fly, build their own houses, and grow wings want to test drive a car, or buy a plain t-shirt? These may seem like good ideas in the real world but in virtual worlds they are pedestrian. Not only do marketers need to be more creative but they need to develop a deeper understanding of the cultures of Second Life. It’s not just one group of cyber-geeks, but many, many cultures living in a virtual space. Goths, v-sex addicts, gamblers, gamers, 3D modelers, furries and WW2 re-enactment fans represent just some of the denizens of <a href=”http://www.secondlife.com”>Second Life</a>. How can you appeal to all of them the same way? You can’t.

Social networks are becoming more and more niche. There are so many options that they can choose what advertisers to listen to. We’re not talking about a few people. When <a href=”http://www.Facebook.com”>Facebook</a&gt; added a user tracking feature several groups popped up demanding a boycott if the feature wasn’t removed. There’s not enough space here to go into to detail but at least one group was 20,000 strong and the uproar caused <a href=”http://www.Facebook.com”>Facebook</a&gt; to overhaul the new feature and apologize to users.

<a href=”http://www.myspace.com”>MySpace</a&gt;, the current reigning champion of social networks has done an exceptional job of providing marketing opportunities to users. Rather than redesign the site or add features no one wants, they are offering these as a choice to users. The recent Simpson’s movie campaign offered users the ability to Simpsonize themselves and their space. Users could edit Simpson-styled avatars to look like the comic show version of themselves. This, along with home page themes, games, sweepstakes, icons and ringtones made for the biggest marketing blast on <a href=”http://www.myspace.com”>MySpace</a&gt;. The home page was redesigned, kind of. The usually blank sides of the <a href=”http://www.myspace.com”>MySpace</a&gt; home page were Simpsonized as well. This cut down on the need to remove favorite features to advertise. In addition, all of the ad spaces were occupied by Simpsons ads. The combination was overwhelming. But no one complained. Why? Think about who they were talking to. Teens and adults that grew up on the Simpsons. The movie is funny, the goodies are hysterical. Alot of thought and time went into developing marketing assets that were a perfect fit for <a href=”http://www.myspace.com”>MySpace</a&gt; users. They didn’t just repurpose traditional advertising to jam down users throats.

As much as the Z-shaped viewing pattern of books has changed to an F-shaped pattern for web pages, advertisers need to change the way they do things from A-Z. Internet usage among future generations is increasing rapidly, while television viewing and book reading are declining. Consumers aren’t going to give up the power they now have over brands and advertising. That means advertisers need to learn to adapt and they need to do it quickly.

Social networks have had 110 million unique visitors in July alone, up 40% from the previous July (<a href=”http://online.wsj.com/article/SB118825239984310205.html”>comScore</a&gt;). Professionals are flocking in droves to social networks such as Sermo for physicians, InMobile for the wireless industry, AdGabbers for advertisers. New social networks for professionals are popping up quickly. Reuters is launching Reuter’s Space for traders and analysts, Integrative Practitioner for alternate healthcare specialists.

Next week I’ll be talking about how a new group of marketers are using alternate reality gaming (ARGs) to promote movies and video games to phenomenal success.

UPDATE: David Schatsky, president, JupiterResearch says, “While these (social network) sites may appear to be the most effective manner of delivering a message regardless of brand appropriateness,” he said, “by failing to truly understand the audience, viral marketers stand to alienate as many consumers as they interest.”

This was in response to an article detailing how “viral” email campaigns are failing when aimed at younger audiences or social network campaigns aimed at a broad range of audience. Younger online users don’t use email nearly as much as older users and certainly don’t forward advertising on to friends. Older users aren’t as effectively reached via social networks. Which will lead into the upcoming article on ARGs.

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