What’s the future of advertising on social networks?

One can’t underestimate the power of social networks. Isn’t that what marketers tell themselves and their customers? Use social networks to boost your online presence and reach more of your target audience, is the type of marketing advice we see with a fair degree of regularity. And it’s true. Social networking is growing. But according to Mark Walsh and IDC, a market research firm, advertising on social networks is one aspect of the social networking hype that won’t grow.

As a respectable and reputable research firm, IDC has the facts and figures to back up this claim. For instance, social network users click on ads less often than regular internet users. 80% of US internet users clicked on at least one ad over the past year, while only 57% of social network users could be persuaded to click. Fewer clicks = fewer purchases = lower ROI.

According to Karsten Weide, programme director of digital media and entertainment at IDC, “The fact that people use social networking services for communication puts them in a mindset that is less receptive to advertising than when they’re using other Web sites like Yahoo or Google.” For ads to work on social networks, they need to be more effective, and Weide believes that this means that users need to be encouraged to do more than simply communicate.

Karlene Lukovitz reports on a separate study by GfK Roper Public Relations and Media on behalf of Epsilon, which revealed that 55% of big brand companies (revenues between $250 million and $10 billion) had a low interest in incorporating social networks in their advertising campaigns, while 33% have no interest in the market at all. The perception of social networks as online teenage hangouts with limited appeal beyond college students continues despite the fact that social networks, such as FaceBook and LinkedIn, have also proven to be popular among older professionals.

And Ted McConnell, general manager of interactive marketing and innovation at Proctor & Gamble Co. has said that social networks won’t profit from advertising because they don’t really have a right to do so. McConnell says, “… We hijack their own conversations, their own thoughts and feelings, and try to monetise it.”

But that doesn’t mean that he’s against advertising on social networks, he’s just against inappropriate advertising that doesn’t suit the social network environment. This is an argument that resonates with John Battelle, who says, “No matter how good the targeting, marketing in a social environment will not work if it fails to grasp the nuance of a particular situation.” He adds, “as a brand, you have to understand how and when to have a conversation.” Battelle points out that marketing initiatives for social networks need to create or add value to conversations.

So, we need to add value to our marketing endeavours, that’s fantastic in theory (theory which we all should know), but how exactly do we do that?

Bob Garfield reckons that widgets are the answer. He calls them the refrigerator magnets of the Brave New World. But again, you need to know and understand your target market and how your services/products can improve or simplify their lives in some way, and then you need to sell it in cool packaging. And as far as widgets are concerned, packaging is at least as important as the service or product you’re trying to promote.

Garfield uses “Ding” as an example of a small, unobtrusive widget that isn’t useful all of the time, but has immense value some of the time. In the example Garfield uses Ding notifies travellers of exceptional air travel deals within pre-set specifications. It’s great, users will probably tell their friends how useful it is and it’ll seep slowly along the net, adding occasional value to the lives it touches as it passes. Then there is Miles, Nike’s little red demon avatar that is supposed to motivate would-be-athletes to leave their computer screens for the half hour it takes to jog around the block a couple of times. Miles also monitors your progress and lets you know about weather conditions and upcoming events that you might be interested in. Miles is in your face, but for a certain demographic group he has enormous value and he has potential for viral greatness.

Then there are the widgets that have only entertainment value, such In Style’s Hollywood Hair widget that allows users to test a number of celebrity dos on pictures of themselves. It’s fun; it’s fluffy and has no practical value whatsoever. But, it’s popular and people spend a fair amount of time testing out several different styles each visit. Its purpose has been served.

Michael Lazerow, CEO of branded-application house Buddy Media, calls the widget advertising phenomenon “app-vertising”. Whatever you call it, widgets, like all other forms of advertising/marketing, have a bunch of advantages and disadvantages, the important thing is how you exploit the technology so that it works for you. Jessica Greenwood of Contagious magazine says that a widgets value is “like a basic unit of utility. The marketing becomes part of the product.” Garfield says that at the very least widgets carry your advertising message wherever they go, and at the most they provide that much sought after connection between marketers and consumers.

It’s pretty difficult to convince marketers to try anything new, and in the current economy the job is twice as difficult, but they are apparently cheap as dirt and far more effective than banner ads have ever been. In the fight to attract new consumers, and even retain old ones, widgets could be the unsuspected missile launcher in your marketing arsenal. After all, by convincing consumers to download your widget, you’ve persuaded them to engage in something other than communication. What do you have to lose, really?

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