Tuesday, February 12, 2008

Forrester is advising clients to advertise on social networks

E-consultancy had an interesting post about Forrester Research who are advising clients that a recession is the time to be advertising on social networks. As Forrester put it:

Social applications in particular, such as communities and social networking sites, are cost-effective and have a measurable impact on prospects’ decisions in the consideration stage, which will be important to companies under recessionary pressures.

This is an interesting position for Forrester to take as social networks have not exactly been a boon for most advertisers. In their paper Forrester makes two points why this is a good time to switch your advertising dollars to social networks. The first point is:

“Well-designed social applications are effective. Social programs leverage the voice of the customer to get messages carried further than ad impressions. If your message resonates with consumers, their word-of-mouth is a more effective medium than any of the traditional media.”

Yes a successful viral campaign can be much more effective than a traditional campaign (see the Barack video for an example of this). But isn’t viral marketing simply successful word-of-mouth marketing? You can plan on having a campaign go viral, but unless the message resonates with the consumer (and that is a big if), your message will go nowhere. Social networks can be a conduit to helping your message go viral, but it needs a good message and product in order to be successful.

The second point is:

“They’re cheap. Advertising campaigns often run into millions of dollars. But Facebook pages and blogs are two examples of social programs that you can start for next to nothing. Even more sophisticated programs like a full-blown customer community typically don’t cost more than $50,000 to $300,000 to get going.”

Just because it is inexpensive to advertise on social networks does not mean that the traffic you are buying is good. There is a reason why StumbleUpon lets you buy traffic at $.05 a click in even the most competitive markets. Social networks are notorious for providing advertisers with lots of ad impressions, very few clicks and even less conversions. One of the reasons for this is that users of social networks are not on social with a commercial intent. When I talk to my nieces who are heavy Facebook users, they all mention that they are never looking to buy something when they are on Facebook. They are there to socialize. They are blind to the ads.

It is akin to when you use Gmail. How many of you actually read the ads that go along with the email you are reading? You ignore the ads, because you are not looking to buy something. The same applies to broad based social advertising campaigns.

The only difference between a poorly executed cheap social marketing campaign and a poorly executed expensive marketing campaign is the amount of money that you spend.

Article source: http://social-media-optimization.com/

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