Marketing Eye
Feature | by Brad Howarth

Australian Anthill Magazine, April/May 2008: Social networking tools, such as Facebook, MySpace and Bebo, are diabolical time-wasters. They suck millions of minutes from tens of thousands of people every day. But here’s the catch. If social networking isn’t part of your marketing strategy, the only person’s time you’re wasting is your own. Brad Howarth explains.

If you talk to employers, teachers, parents and almost anyone in a position of management, you’ll hear that social networks are a blight on the working lives of workers lucky enough to have access to them.

They’ll say that these places to swap pictures, share music, engage in gossip or play games are largely about distracting us from getting on with the serious business of whatever it is we are employed to do.

In fact, tens of millions people around the world – are wasting minutes and hours on social networking sites as you read this. So many, in fact, that you can guarantee a co-worker, friend or employee is using a social networking tool right now.

After all, it could be argued that email, instant messenger and the growing armoury of tools we use to manage our working days are all deployed in the service of social networking.

According to Wikipedia (another one for the list), ‘social networking technologies’ (or ‘social networking software’) are defined as a range of web-based software programs that allow users to interact and share data with other users. But, of course, that could mean anything. As such, web commentators generally revert to definition by comparison.

Online communities, such as MySpace, Facebook and Bebo, are the most commonly cited players. This is because they are the leading players in the associated internet phenomenon dubbed ‘web 2.0’.

Whereas the worldwide web of old (web 1.0) was rather static, characterised by ‘publisher-generated content’ (much like a newspaper or, dare I say it, a magazine), the new web is all about ‘user-generated content’ - bottom-up rather than top-down content dissemination.

In this world, aggregators and platforms are more powerful than publishers. And, of late, the social network is king.

A new level of marketing
Social networks enable people to share their thoughts and other content with friends or folk of similar interests.
Increasingly, they are being used by businesses to do the same. And if our new Prime Minister can harness the power of social networks to help win an election, how hard can it really be?

According to Mellissah Smith, chief executive of the marketing services firm Marketing Eye Digital, not all companies are naturals when it comes to using social networks. However, in the last 18 months, 90 percent of her firm’s clients have begun using social networks somewhere in their marketing strategies.

“We’re already used to using these tools as individuals on a regular basis, but businesses have been slower on the uptake,” says Smith. “But the fact that you’ve got mediums like Facebook and MySpace that are sitting on your computer 24/7 makes it so much easier to stay in touch with your client. It’s easy to use, and people of all ages are responding to that”.

Smith says she even has clients in their 60s who are on Facebook and MySpace and using them purely for business purposes.

In February, Marketing Eye ran a program through Facebook for a client in the technology industry to make its existing clients aware that it had opened offices in new territories, released a new product and expanded its services.

“They could have done a direct marketing campaign, but we don’t all necessarily read things that come in the mail, even from a known and trusted service provider,” says Smith. “But what they had done was convince all of their clients to participate in Facebook, and then set up a private network through which they could play a video and distribute PDF documents, as well as creating a link to an online tutorial. And everyone logged on, because it’s new and innovative.”

Smith says another client, an accounting firm, is using a social network to communicate with its staff and to organise training programs internally, as well as using it to communicate with clients on a daily basis.

“What it does is solidifies that relationship between the client and the service provider, as the client feels like they are getting more than they have ever gotten.”

And the final argument is the hardest to ignore - using these tools often costs nothing more than time.

“It makes perfect sense for any businesses, whether you are a one-man band or a large multinational, to use this medium.” says Smith. “SMEs are able to gain greater brand awareness by using this that they have never had the opportunity to do before.”

Storm in a teacup?
Social network sites such as MySpace and Bebo work by providing consumers with the tools to easily create fairly complex multimedia web pages, and have done so sufficiently well to attract users around the world in their millions. Those same tools are also being used by corporations large and small to essentially set up shop where those people gather.

Social network sites act as aggregators of an audience, in a similar way to sites such as ninemsn and Yahoo!7. The value for advertisers is in the personal information that consumers provide to the site operators, which allows advertisers to be far more targeted in their advertising.

The global online restaurant booking service Menulog uses social networks as a means of interacting with customers and reaching out to new ones. Consumers can share pages on their favourite restaurants with their friends on Facebook, and use it to click back to Menulog to find out more information and make a booking.

Menulog chief executive Gary Munitz says the goal is to both increase repeat business from its users and bring additional traffic to Menulog through the goodwill it has established with existing consumers. Munitz says the firm is creating fun applications that it hopes will spread virally among friends.

But he says finding the right idea is difficult.

“The fact that there are millions of people that use Facebook doesn’t help - you have to create an application that is going to get across to those people,” says Munitz. “It’s about taking the time to understand what it’s all about, and then taking advantage of it. It’s not easy, but they have millions of users, and you can share messages across those millions of users and bring traffic. And your only cost is your development time.”

The new marketplace?
There has been some suggestion of late that MySpace and other sites are a fad that will fade in time, as consumers become jaded with the concept and possibly disillusioned that their leisure activities are being monetised and sold to advertisers.

Earlier this decade, Friendster was the most popular social media site, but has since tumbled down the rankings. The possibility is always there that the same will happen with the current batch, as they are superseded by new sites and technologies, or users grow bored with the brands and politicians wanting to be their friends online.

But to date, if anything, people are increasing the number of applications in their busy social networking lives.

While MySpace is the strongest site, it does face challengers, including UK-born Bebo, which strangely enough is more popular than MySpace in New Zealand. The local director for Bebo, Francisco Cordero, says Bebo is particularly strong in the 13-21 age bracket, where it competes strongly for traffic with web portals such as ninemsn and Yahoo!7. Bebo has attracted advertisers including Coca Cola and various movie companies, and has even signed Bathurst Council for a promotion of a new skating park.

Cordero says that while it is easy enough for a firm to advertise on Bebo’s pages, better results come through actually joining the community and building a site of their own within Bebo.

“Why invest in a corporate website? Why not invest in Bebo, and let us do all the work for you?” says Cordero.

Captive audience
Similarly, many brands are now building sites within MySpace (called profiles) to interact with the consumers who go there. One of the most successful campaigns for MySpace involved the V energy drink brand, which set up a profile within MySpace for its V Raw marketing campaign. MySpace users were encouraged to upload a videoed job interview of themselves applying for a range of desirable but difficult-to-achieve jobs, such as assistant editor of Yen magazine, or a photographer for Rolling Stone magazine.

Consumers were then asked to add comments and rate the interviews. The eventual winner was put through the various job opportunities. Users could also add elements of the campaign to their own profile pages, such as graphics and animations, to help personalise their pages.

The general manager of Fox Interactive Median (the local owners of MySpace), Rebekah Horne, says brands are becoming increasingly familiar with using tools such as MySpace.

“They are so engaging, and it is also very measurable,” says Home. “You get that real time measurement of how the campaign is engaging an audience and how the brand is engaging the audience.”

In mid-2007, MySpace executed another campaign for the ice cream brand Billabong, intended to drive growth through an otherwise slow sales months. MySpace created a profile page for a fictional character called Wooden Stick as the front ‘entity’ for the campaign. Wooden Stick then went on a series of adventures with friends including Hot Chip. The animated adventures drew a strong following, with consumers again encouraged to send comments, even creating their own versions of Wooden Stick and sending in pictures.

“It was really entertaining and engaging, and great branding from Billabong’s point of view, and they were really happy with the result,” says Horne. “Brands are getting a lot more adventurous in terms of campaign that they are engaging with. And I think the benefit of these custom communities is that they enable that really deep engagement”.

But Horne cautions that when developing a campaign through a social network like MvSpace, advertisers shouldn’t simply repurpose a traditional campaign.

“It is one thing to talk about the phenomenon of social networking, but it is being able to create meaning and value for advertisers and for brands and to also create meaning and value for our users,” says Horne.

“It is all about finding a relevant, specific audience and targeting that audience with a message. We can now drill down deeper, so we can target consumers on age, location and gender, as well as if they are a horror film enthusiast.

“Therefore we are getting much more value and effectiveness for advertisers, but also, importantly, a much more relevant experience for our users, because what they are seeing is engaging and more relevant to them. I think that is probably going to be good value for those smaller brands that maybe don’t have the larger sort of advertising dollars.”

Beware the wolves
Just as marketers and businesses go where the people are, so too do scammers. Social networks are a relatively new phenomenon and, as with most new technological trends, many people are far slower far slower and, yes, more naive than those who seek to exploit them.

The amount of personal information the average user reveals on sites such as Facebook and MySpace make illegal shenanigans such as the Nigerian 401 scam and phishing attempts at identity fraud potentially more lucrative than ever for a nefarious techy.

The Australasian Consumer Fraud Taskforce recently suggested that online scammers have duped Australians out of more than $ 700 million.

Message: You might have more “friends” on Facebook than you do in real life, but you definitely have more potential enemies too. Not every poke is intended to tickle.

Facebook’s long shadow
Along worries over security, users have also recently privacy concerns.

This follows the revelation that Facebook retains a user’s private data after that user deletes their profile.

Facebook’s privacy policy states that this “backup” is retained for a “reasonable period of time to enable the reversion to the prior version of that information”.

Such language is sufficiently vague to have privacy groups up in arms, suggesting that Facebook intends to allow advertising partners marketing access to inactive users.

Trouble in paradise?
Could Facebook be losing its shine? Figures released earlier in the year by Nielsen Online in the UK and Hitwise in Australia revealed that from December’07 to January ‘08, Facebook suffered its first drop in users for 17 months, with rival sites MySpace and Bebo experiencing similar contractions.

Nielsen reported that Facebook suffered a five percent drop in the number of UK users from December to January, while Hitwise reported that Facebook’s share of the Australian social network market dropped from 18.36 percent to 17.95 percent over the same period.

While some commentators believe that it is not unusual for there to be a lull in usage over the holiday period, it raised alarms that “Facebook fatigue” — a phenomenon that has been gathering steam if you believe the water-cooler utterings of many former Facebookophiles — is a concrete reality.

So, are businesses rushing in to social networks just as the kids are moving on? Only time will tell. There are some poignant parallels with the fate of Second Life. It was the flavour of the moment not so long ago, and advertisers flooded in in search of a new marketing frontier on the back of a surge in Second Life registrations. Unfortunately, only a miniscule proportion of the people who signed up ever made it off the induction island. When this became apparent, the big brands began withdrawing to their first lives and the buzz about Second Life moved on to, well, Facebook.

Social networks go mainstream
The growth of social networks has been truly staggering. The most popular in Australia, MySpace, had 3.1 million unique visitors in December, which is generally considered to be a slower month, and is still adding between 5,000 and 7,000 users each day. Not bad for a site that no one had heard of only a handful of years ago.

According to the web ratings agency Hitwise however, while MySpace remains the most popular social networking site in Australia, it is facing a serious challenge from Facebook, which shows the strongest growth of any social network system. Strangely enough, Bebo remains the most popular site in New Zealand, followed by Facebook. These sites are also highly ‘sticky’ with consumers, with over the average period of time that a person spent on MySpace sitting at 27 minutes, compared to the average of just 12 minutes for regular websites.

But these three sites are far from the only players in town. Numerous smaller sites have also shown a capability for targeting niche markets and demographics.

Sydney-based The Sound Alliance operates a number of community social networking sites, led by the dance music community site Earlier in its development arc is 3eep, which is creating a platform for sports-related social networks based on fan and player communities around the world.

YouTube is also generally put into the social networks basket, given its capacity to allow consumers to post, rate and share content online. It has also been used by many brands (and politicians) to post messages to their communities, bypassing traditional media through a service that is essentially free to use.

There are also several business tools, including LinkedIn, Spock and Plaxo Connect, which allow users to manage and track contacts and networks. Although the ability for a business to leverage these for marketing purposes is limited, they can be useful in professions such as recruitment, to find job candidates. This was part of the thinking behind the foundation of the LinkMe site by Morgan & Banks Investments and Sensis as a career development social network site.