Consumers Embrace Social Media Ads
by Mark Walsh
Four in 10 online consumers have made a purchase based on advertising
they saw on a social media site, while almost three-quarters welcome brand
advertising on social networks, according to new research from Razorfish.
The Seattle-based agency's second annual "Feed: Consumer Experience Report"
found that people are actively embracing social media and new communication
tools like Twitter and are more open to advertising than commonly assumed.
"What struck us was the massive impact of search, social media and widgets and
feeds on the consumer landscape... and how that's creating a more distributed
experience for consumers, and they love it," said Garrick Schmitt, group vice
president of experience planning at Razorfish and editor of the study.
The agency's research was based on a June survey of 1,000 "connected"
consumers ( who spend money online and have broadband access) in four age
groups from 18 to 55. Participants were 44% male and 56% female, and were
located in 10 metropolitan areas nationwide.
Razorfish said it chose to focus on connected consumers to avoid duplicating
research on online user behavior by organizations such as the Pew Internet &
American Life Project and Forrester Research. This group of sophisticated Web
users also proved to be marketer-friendly--with 76% saying a wide range of
brands including Nike, Virgin and Bank of America should advertise on social
media.
Given the findings, one might expect social networks to be overflowing with ad
dollars. But social sites and Web 2.0 tools such as feeds and widgets have not
yet turned into advertising bonanzas because of the vast but fragmented amount
of online inventory they have helped create.
Top social networks such as MySpace and Facebook have introduced behavioral
targeting systems to help advertisers zero in on certain audiences, but such efforts
are still in an early stage.
The Razorfish report acknowledges that the various forms of emerging media are
"challenging publishers, advertisers and marketers to meet their needs in new,
distributed and largely uncharted territories--many of which have no analog
touchpoints--and to provide services that have no immediate monetization models."
Despite the hurdles, "people are reacting to brands in social media, whether paid
or unpaid, and it's influencing how they make purchasing decisions," said Schmitt.
The key is creating campaigns offering content and features that blend seamlessly
with social platforms.
"Content, in our view, will become advertising--both for brands looking to reach
and engage consumers and for publishers who will look at content as an
acquisition vehicle for a broader audience," according to the report.
For retailers, personalization of online stores via features such as recommendation
engines is a strategy for adopting social features to drive sales. The study found that
65% of those surveyed have made a purchase based on an automated
recommendation triggered by past purchases.
The same percentage of consumers said loyalty programs such as Amazon's Prime
and Best Buy's Reward Zone, which offer "points" or other incentives, influenced
buying decisions. "For retailers, it's not just about pure price, but value-added things
like recommendations that cause people to really engage," said Schmitt.
While the rapidly deteriorating economy is already having an impact on online ad
budgets, Schmitt doesn't expect social media to be affected. "We probably won't see
a pullback because it's still a very small percentage of marketer spending," he said. "
And every client I talk with is adamant about having a strong social media component
to everything."
Emarketer earlier this year reduced its forecast for social network spending from $1.6
billion to $1.4 billion, citing slower-than-expected growth at MySpace and Facebook.
That revision came well before the financial crisis hit this fall, further lowering overall
ad spending projections.
Mark Walsh
mediapost.com
Are you ready to get started on your NEW program or product.. for the holiday season; but don't have time to learn html? Need help with
your landing page? Consider the Econo Safari Package... customized to fit your
needs. http://rumblesfromthejungle.com/advchoices.htm
