Tuesday, May 6, 2008

The Key Trend for 2008

I think it's clear that the key trend for 2008 is social networking. Both MySpace and Facebook are maturing as platforms, both in terms of their demographics (both are growing most rapidly among the over-35 crowd) and as viable advertising channels. So, if you've already dipped you toe in the social networking waters, good for you! Hopefully it was a good learning experience. Whether you feel your initial forays were successful or not, at least you're on the learning curve. If you're looking to get into the social networking arena, wait no longer. Social networking is bigger than you realize, and its impact is here to stay. A few statistics of interest:

  • 8 – 10% of all time spend on the Internet in North America is now spent on MySpace.
  • Both MySpace and YouTube now far exceed Amazon.com in monthly visitors.

Where to Focus
Your focus this year should be on widgets and communities. Frankly, traditional advertising on social networks is unlikely to provide you with a reasonable return on investment. Click-through rates for ads placed in social network environments are a fraction of the already dismal rates you would get from running banners on a traditional site. Better targeting may improve this over time. Realistically, though, the social network environment is just not optimal for selling most products.

Brand awareness is a different story. I suggest focusing your social networking energies today on building fun, engaging widgets that make your brand relevant and interesting. Widgets are still novel enough that interesting new entries gain rapid trial, at little expense for the marketer. And joining channels or groups with shared interests may provide you with the opportunity to gain market intelligence, watch trends, and push viral promotions.

The Impact of Social Networks on Your Site
As users of all ages become accustomed to common social networking features such as widgets, User Generated Content (UGC), peer reviews and more, they are starting to expect these features in other sites as well. Would you believe that the Wall Street Journal now invites you to link your subscription to your Facebook account so you can see which articles your network finds most interesting?! It's true, and a great, simple way to leverage the network effect in traditional media.

As you plan your marketing investments for 2008 and beyond, start thinking of your site in terms of distributable functionality. If an application is valuable on your site, with the limited traffic that it receives, how much more valuable would it be as a widget that your customers can share with their friends? Or put on their phones? In short, if it's worth creating, it’s worth distributing.

What You Should Do This Year
The marketplace is still very dynamic, so experimentation is the key strategy for 2008. Establish multiple small pilots, set realistic goals, measure your results, learn from your mistakes, and make plans to build on your successes in 2009. And don't overlook B2B opportunities for leveraging social networks. If you’re looking for ideas, or to refine raw ideas into a successful pilot program, we will be happy to help.

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