I think its fair to say that for the last 8 years new entrants and some established members of the digital marketing fraternity have been promoting the ‘next big thing’ in digital marketing to their clients at the beginning of each new year.
Often the lessons of the dotcom boom and bust cycle don’t seem to have been learned. In the past few years we’ve seen huge amounts of investment into online marketing ideas that are typically difficult to monetise. One of the most well known of these was Google’s purchase of You Tube. The last time I read a report on this they were losing millions of dollars on this venture. Now it may be argued that they can afford to do this, but in a slump will their shareholders continue to let them?
Social networking is being touted as the next ‘big thing’ in digital marketing for 2009. Some are claiming it is the answer to all of a companies online marketing needs. But the question is, how can a corporation be ethical in a social networking environment? A lot of the time their marketers actually end up causing damage to brands by creating salesy environments and in the worst cases create postings that their customers can’t even respond to! After all, as I understand it the whole concept of social networking is that you act as part of an online community that actively engages with what you have to offer. And like anything else in life, if it ‘ain’t interesting, they ‘ain’t gonna stick around.
On the other side there are literally hundreds of social networking venues sprouting up on the internet every week vying to add new users with various tools and gimmicks that seem great at first glance. But do they really serve any useful purpose to the average user?. The big question is how will the providers of these sites be able to monetise these ventures effectively. The standard tools of paid display ads, banners, video pre-roll and Adsense can only be spread so far? Do CPM rates drop through the floor because there’s so much potential inventory out there? Moreover, during a recession where eMarketer predicts UK display spend will drop hard through 2009, and where users of social networking sites don’t want and won’t react to intrusive brand advertising its going to make it even more difficult to run a profitable business in this market space. Will the big brands start to do the same to display as they have with TV, where there is a wider choice of effective channels, and they potentially have tighter verticals and niche audiences, start to demand much lower advertising rates, and distribute their brand messaging across a far wider total reach?
So if we look at where we are now, the main social networking sites such as Facebook, Bebo and MySpace have most of the users, and have developed advertising tools to match user profiling. As the social networking space matures will these become the ITV, C4 and SKY1 of the internet, providing mass appeal whilst newer social networking offerings begin to appeal to distinct verticals and build a niche audience allowing brands that match the overall profile to build trust, and sales with relevant activity within the network? Will that be the classic bulk methods of display, or will it be through a more integrated approach of interacting with users via expert analysis, forums, advice and customer support? I think the latter will see smart marketers reaping the big rewards.
And then there’s YouTube. What a conundrum. Amazing and fantastic idea, lets people share their home video, create awareness of bands, just be downright creative. But its free, and people don’t want to pay for it. Innovations like the BBC iPlayer have kind of stopped it from going into the mainstream broadcasting space, which could have generated more revenue, and pre-roll isn’t cutting it for brands. So what is the future for YouTube? 2009 will probably see some answers as Google suffers from reduced revenues due to less clickthrough across the Adwords inventory. Whatever happens you can be sure that the best brains at Google will probably come up with something very clever…
So, is Social Networking the next big thing? I think the answer is no. It’s already out there, its actually maturing, and if used as part of the overall marketing mix, and if marketers put some effort into it, I’m sure it can pay dividends as some our own experiences show. I think the next big thing in online marketing is going to be the same as its always been. Well planned content, delivering relevance to your visitors, and integrating the various tools to create awareness and increase reach cost effectively.
Some Social Networking Examples From Our Client Base
One client uses home made videos posted onto You Tube and linked from his MySpace and Facebook pages to educate his audience about new products and health and fitness techniques. But he can’t rely on the social network alone, he still has to use more traditional methods such as tracked email marketing and Google Ads to keep engaging his audience. Undoubtedly, once his audience start to engage with the videos he sees a sales spike, and being in a niche vertical with a number of UK exclusive distribution deals, there is less chance of people taking his infomation and performing price comparisons on the search engines.
The main point is that his analytics show that his best results are achieved when he uses an integrated approach, and his email and social networking activities are most effective in his retention armoury. Its also worth noting that this client is extremely effective in creating new and compelling content on a weekly basis which in turn makes his web site, social networking pages, YouTube channel and email effective.
We’ve seen some encouraging signs with clients in the traditional auction marketplace when social bookmarking tags are placed against lots in their web catalogues in combination with online PR as part of their SEO strategy. It would appear that browsers that come across interesting lots are keen to add them to Del.icio.us and Digg to let others know they are there. We have some plans to try and implement strategies using Twitter in the new year and will report back on those once we have some more data. Facebook works well in niche markets too, our client has seen a lot of people join as friends to find out more about their quality secondhand watch sales.
We have been seeing a higher proportion of client enquiries about the use of social networking in their marketing, and in the smaller SME market space its being seen as a low cost quick fix – which was to be expected. In a similar way to blogging, social networking will only be as good as the work put into it. It needs to deliver interest and not just become another marketing or sales message.
Our work with clients who are open to the social networking environment, and who have something interesting to say, that isn’t necessarily sales focused shows that a combination of social networking pages, social bookmarking and RSS feeds in combination with the classical methods of search and email pays the best dividends. But its not for everyone.