We need a standard for social network advertising April 25, 2007Posted by jeremyliew in advertising, business models, Consumer internet, Internet, social media, social networks, start-up, startups, user generated content, viral marketing, web 2.0, widgets.
On Monday Myspace announced the results of a research study that they commissioned, showing the effectiveness of marketing campaigns within social networks. It was widely covered. The key results were that:
— More than 40 percent of all social networkers said they use social networking sites to learn more about brands or products that they like, and 28 percent said at some point a friend has recommended a brand or product to them.
— Brands such as Adidas and Electronic Arts attributed more than 70 percent of their marketing return on investment to the “Momentum Effect,” which the researchers define as the quantifiable impact of a brand within a social network.
— Of those polled, 69 percent said they use social nets to connect with existing friends and 41 percent said they use the sites connect with family members.
— On average, social networkers spend more than seven hours per week on social networking sites, and that those hours are driving the growth of overall time spent online. More than 31 percent of online social networkers claim they spend more time on the web in general, after starting to use a social network.
The broader theme here, IMO, is that of users voluntarily affiliating themselves with brands.
Online, this is a relatively new forms of advertising. It gets instantiated in various ways – from “friending” Scion on Myspace to choosing an “American Idol” theme for your Rockyou slideshow to Photobucket‘s Spiderman skin that got them briefly blocked on Myspace. (NB Rockyou is a Lightspeed portfolio company)
Offline it’s the Nascar jacket or the Firefox T-shirt – not only does it advertise a brand, but users PAY for the privilege of doing so.
As always, when you see offline analogues to online behavior, it’s a good sign. But as I have blogged in the past, new forms of advertising are hard until standards emerge.
What the industry really needs is for the social media players to get together with the IAB and create some standards for “user affiliation” ad units. The widget makers (Youtube, Rockyou, Photobucket, Slide, Clearspring, Widgetbox etc) and the smaller social networks (led by Freewebs as this Washington Post story notes) are already trying to do this, but until Bebo, Myspace, Facebook and the big portals (AIM Pages, Microsoft’s Live Spaces, Yahoo 360, Orkut etc) get on board, it will be hard to get enough attention from the marketers who must also agree to the standard setting process. These big players, who already have relationships with advertisers, must start the conversation.
The IAB has been getting more activist of late, and it would be great to see them take the lead here as well. Their board is dominated by representatives from the big online and offline media companies, and they will need to lead the standard setting. (I’m looking at YOU Michael Barrett!)
Standards will be good for the whole industry. The sooner we get standards, the sooner social media/user affiliation marketing can go from being a custom business development deal every single time, to a line item in the spreadsheet of every media buyer at every agency.
UPDATE: Michael Barrett (Chief Revenue Office of FIM/Myspace) responds in comments