Two out of every three Internet users visit a social networking site each day, according to the web statistics company, Compete. This means that social networking sites are quickly approaching the traffic level of the big portals like Google and Yahoo. That’s a lot of new online ad inventory.
But a big question looming over the social networking horizon is whether or not that inventory is valuable for advertisers. To answer this question, we need to understand the target market and the environment—both of which are sure to grow and also change in 2008 and beyond.
Right now, social network visitors are relatively young. For this demographic, the impact of these sites is indisputable. Just as today’s Baby Boomers still listen to the Rolling Stones on their iPods, it’s likely that social network users will continue to make these networks an ongoing part of their lifestyle. Case in point: Though Facebook was launched for the university population, half of all current users are outside of college.
As site traffic levels continue to increase, does this growth translate to online lead generation success? Do these online visitors see the ads that appear on their blogs and profile pages as they are writing on walls, throwing zombies at one another, and uploading pictures, movies and music?
In fact, they do. Marketers have found that social network users not only see the ads, but interact with them. Members of this group are, after all, the ultimate multi-taskers. Which is why lead generation firms have found some of the new inventory available through social networking sites to be high converting inventory.
Is this the Holy Grail for online lead generation? The key is to craft creative that engages the audience. Active Response Group works closely with account managers at key social networks to identify trends that will benefit both marketers and publishers. At any given time, we can have dozens of different creative themes running.
Online spending for banner ads has increased considerably over the past six months. We expect it to continue to trend up, especially as more and more inventory becomes available through additional consumers creating accounts and using these networks.
Of course, there is a flip side to this phenomenon: Our piece of the pie can shrink as more advertisers become comfortable with the type of inventory that can be part of social networking sites, or as advertisers are given more ability to carve out the niche of inventory that they really want. And, of course, that is the direction MySpace and Facebook are heading.
I, for one, can’t wait to see how 2008 pans out. But like any growth industry, there are lots of unknowns on the social networking landscape. As always, the lead generation firms that will win big are the ones that have a good handle on this market as it continues to evolve and can develop solutions keyed to these market changes.
Brad Powers
Chief Executive Officer
Brad Powers founded Active Response Group in 2004. His mission was to provide marketers, agencies, and brand managers a way to simultaneously increase revenues, decrease costs, and get closer to their consumers. Under his leadership, ARG quickly became one of the leaders in the online lead generation space. Before starting ARG, Brad served as Executive Vice President, Sales and Marketing for eWOMP Technologies, a provider of customized email and viral marketing solutions. His clients included Microsoft, Town Sports International, Zone Perfect, Petersons, Thompson Learning, and Prometric. Previously Brad was Chief Marketing Officer for Wanakee Design and Products, a direct marketer of high-end cosmetic products. Brad received an MBA and BA in Psychology from Clark University.
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