Archive for February 2008

Do social networks need advertising?

Mitch Joel pointed me to a business week article about advertising in social networks. In the same post he also links to a blogpost claiming social media sites need advertising.

In short: time spent on social networks is declining, for whatever reason – one could of course be increased advertising on these platforms. So this could be a problem for advertisers in the near future. Secondly: social networks need advertising, the same way media has always been ad supported.

But it’s not only the fact that user numbers are going down, ads on social networks are also less effective than on regular websites:

Many of the people who hang out on MySpace, Facebook, and other sites pay little to no attention to the ads because they’re more interested in kibitzing with their friends. Social networks have some of the lowest response rates on the Web, advertisers and ad placement firms say. Marketers say as few as 4 in 10,000 people who see their ads on social networking sites click on them, compared with 20 in 10,000 across the Web.

The solution to this is new targeting mechanisms, to serve users more relevant messages.

Last fall, both rolled out programs allowing marketers to pitch products to people in hundreds of categories of interest, such as fashion and sports. News Corp. President Peter Chernin said on Feb. 4 that response rates on MySpace improved as much as 300%.

Could be a solution. But at the end of the day, this whole approach still tries to use old answers to new problems. How about taking an approach that looks beyond plain advertising? How about introducing branded widgets, services, or exclusive whatevers to these platforms, so that brands can provide an added value to the interaction between users?

I am thinking of such things as the Red Bull Rosham Bull Challenge in facebook, which is a game that two users can play against each other. Or even just plain and simple things like the fact that you can sponsor digital gifts in facebook. There still is lots of potential for these kind of approaches.

Oh, and from a business model perspective: I don’t think social networks need advertising support. At least not to the extent that their business models are in danger if there is no proper ad solution in place.

Think about the German platform Xing.com. There you have a choice of paying a monthly premium for additional services – one of which is the fact that you don’t get to see any ads.

There could also be other models, like changing the business model slightly and starting e-commerce around certain product groups (i.e. certain information-based, digital products or even real products).

These problems are not really new. But what this whole discussion shows, is simply the fact that social networks have, all of a sudden, exposed the need for new marketing approaches much clearer than any of the previous developments on the web.

10 billion videos watched in December

This is a groundbraking figure:

U.S. Internet Users Viewed 10 Billion Videos Online in Record-Breaking Month of December, According to comScore Video Metrix

Not sure, if this is really due to the writers strike as it si claimed there. Could be anything.

Other question: what is the total number of videos watched around the globe? And how does that compare to time spent in front of the TV, measured in total hours, for example?

Twitter is the top gadget of the forthcoming US election

Seeing this, reading how Jeremiah and Josh tracked Superbowl ads and thinking back to this tool here, I expect a huge twitter boom during the forthcoming US election. Lets just hope that twitter gets their server capacities up to speed. It will be interesting to see how this new communication mechanism will evolve!

Paid word of mouth by taxi drivers

Whenever I take a taxi, I am in no mood for a conversation. It’s either too early in the morning when I am on my to the airport, or it is late in the evening after a party… You know the deal. So I was a bit shocked, when I read about taxi drivers in London now being paid to start a conversation in which they try to explain the benefits of a certain product or service… Hope this doesn’t start in Germany. Don’t want a conversation in a cab and I certainly don’t want a sales pitch during a taxi ride…

The trick is organised by Taxi Promotions UK, who are apparently doing that kind of thing since 10 years, believe it or not!

A taxi ride gives marketers something they find increasingly elusive – a captive audience – at a time when consumers are bombarded with commercial messages and when digital technology gives them the power to skip TV ads.

The average London taxi ride lasts 16 minutes, said Asher Moses, managing director of Taxi Promotions. In a normal working day, a driver picks up 40 to 60 fares; multiply that by 10 drivers, for the 888 campaign, and the audience that can be reached in a campaign that lasts several months is sizable.

Scary? You bet. Who’s next, trying to sell us something, while we think we simply pay them for their services? Our hairdresser, our doctor, etc.?

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