Social Networking Forecast: Success can depend on your Circle of Friends

A recent report by eMarketer suggests that US social networking ad spending will fall by 3% to US$1.14 billion in 2009 from US$1.18 billion in 2008. Significant if one considers that year-over-year spending grew by an estimated 33% in 2008 and 129% in 2007. 

The major culprit for the overall decrease? MySpace. Due to a drop in recent traffic figures, eMarketer predicts revenue for MySpace to drop 15% this year to US$495 million compared to an estimated $585 million in 2008. However, there is some positive news out of this as Facebook is expected to increase its ad revenue to about US$230 million, a 9.5% over 2008. 

So, what does this mean to marketers? Two things:

First, not all social networking sites are created equal. Investing in a social networking ad campaign requires careful planning on targeting the right audiences, which means putting in the time to carefully weigh out your options and prioritize your dollars. Basic marketing fundamentals, I know. But it’s easy to get caught up in the social media frenzy and target sites based on their overall member numbers without looking deeper at the quality and relevancy of their demographics in regard to your objectives. 

Ask yourself, “Which site has the right members (demo + size) for our campaign?”; “Which site offers the right ad formats and placements to help deliver better results?”; “Are there case studies available (from the site itself or from customers)?” 

Second, now that social networking has been the buzz for a few years, people are getting savvy in creating and delivering their messages. Everyone understands that social networking sites are based on creating and maintaining friendships. No arguing that point. But it’s a key one to remember. For like all friendships, they take time to develop and nurture. Which means that most marketers who are successfully leveraging these sites are putting in time and resources into building lasting, interactive relationships with members based on trust and two-way communication. Rather than relying on ads (which still work for various types of campaigns), marketers are including social media relations in their strategy* and allocating budgets for people (in-house or outsourced) to manage these activities. 

Case in point, eMarketer mentions a survey by Forrester Research, which found that 54% of marketers plan to increase their investment in social media in 2009. So, although ad spending will decrease by 3% this year, marketers are still looking to increase their overall investment… interesting. This certainly highlights the importance of including social media relations initiatives, above and beyond ads, as part of your overall social networking strategy.

So, whether you’re new to social networking or a veteran looking to enhance your programs, keep in mind the old adage they say in the investment world, “the trend is your friend.”  And in this case, invest in your ‘friends’ wisely.

* Through an informal survey amongst some colleagues, it's interesting to note that there are mixed opinions on which strategy social media relations falls under: online marketing or public relations. Of course, diehards will support the notion that it's in a league of its own... regardless, this raises an important issue of budgeting and resource allocation. Time will tell.

- editor