Marketers Pounce on Social Networking, But Users Shy Away

Social networking sites keep reaching new milestones. In fact, according to a new survey by industry research firm IDC, 54 percent of the United States online audience now acknowledges having used some form of social networking sites (or, in IDC's shorthand, "SNS") -- up from 43 percent not even a year ago. But if you think that level of penetration represents a tremendous marketing opportunity -- well, you'd be wrong. Most users of social networking, according to IDC's survey, hardly pay attention to ads on social networking sites -- a sentiment confirmed by dismal clickthrough rates.

The report, "U.S. Consumer Online Attitudes Survey Results, Part III: Social Networking," authored by IDC analysts Karsten Weide and Caroline Dangson, includes several other significant findings:

• Major services such as MySpace and Facebook now offer as much reach as mainstream services such as MSN or AOL.
• Social networking sites are no longer just for teens and tweens. Results show that the sites now engage older, better-educated consumers with higher incomes. General usership more closely mirrors the actual U.S. population.
• The most-frequently named reason for engaging in social networking sites is for communication purposes.

At first glance, the potential for marketing penetration on social networking sites would seem to hold remarkable promise. Results show, for example, that 76 percent of social networking users visit a site at least once a week, with about 57 percent visiting sites like Facebook and MySpace at least once a day. During each session, 61 percent of SNS users spend at least 30 minutes on the site or stay continually logged in.

"Without a doubt, SNS are tremendously popular," Weide and Dangson write. "What is less clear is whether SNS will fulfill the promises that have been made in terms of monetization through advertising." Indeed, at least one stat revealed in the report will give any marketer reason for pause: Ads on social networking sites have clickthrough rates that are far below those found with traditional online ads.

Here's something no marketer wants to hear: Nearly 52 percent of respondents say they find advertisements on social networking sites annoying. Seventy-nine percent say they click on an ad on a social networking site just once per year -- a pitiful rate considering the amount of time these users indicate they're spending on the sites each time they visit. The report makes clear that social networking sites can provide advertisers a broad and high-quality audience; effectiveness, however, is another matter entirely. The analysts venture that the reason is that social networking users visit sites such as Bebo and Facebook for communication purposes, and are therefore less receptive to ads and third-party messages.

Asked to name their top reasons for using social networking sites, respondents cited the following:

• To keep in touch with current contacts.
• Because my contacts use it.
• To find contacts I have lost contact with.
• To share pictures and videos with contacts.

At the beginning of their research, the IDC analysts predicted that users were treating social networking sites as disposable factors in their daily lives. "Our expectation going into this survey was that respondents would find SNS not very useful, despite the current fascination with them," they write. "This was because from our point of view, SNS do not offer a lot of true utility and could therefore even be characterized as toys." The analysts reached a very different conclusion once the results were tallied: The majority of respondents revealed that they find SNS "very useful" or "somewhat useful." To that degree, the authors question why so few sites integrate productivity and deeper communication tools such as email, instant messaging, and Internet Protocol telephony. The majority of users say they would, in fact, like to see new features related to communication.

All in all, IDC says that the research indicates a blossoming future for social networking use. Even so, the firm estimates the effectiveness of marketing will remain relatively low for the time being, unless publishers of social networking sites find ways to engage users as something other than simple communication tools. The analysts caution marketers to be clear about this in moving forward with social networking initiatives.

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