Social Networking - The Misunderstood advertising medium

It began with Internet Advertising in general, marketers found it a tough cookie to accept, and some marketers still do, and now as we are finally seeing a rise in online ad-spends proportions, this step-motherly treatment is bound to come up again – Social Networking being the victim. India has been witnessing a steep rise in online ad-spends across all genres, with FMCG being amongst the last ones to join in, with the likes of Clearasil also jumping on the Internet advertising platforms. Consider this - Alexa suggests that 3 in top 10 websites worldwide are social networking sites. Also, 90% users visit their profile everyday on these social networking sites and these sites reach out to more than 40% users online. This is one place where users login when they have time in abundance and hence, are most receptive to advertising. A marketer can target users by Gender, Age, Occupation, Interests providing one of the most accurate mapping of a consumer’s behavior. Couple this, with the availability to create virals, applications etc. On paper, this seems to be the best available option for all advertisers, and money should be pouring onto this inventory left, right and center. Now comes the reality check –
• Click through ratess are very low, so Cost per Impressions deals go entirely against the advertiser.
• How does the advertiser know whether people have actually noticed the ad?
• How can one gauze the success of the campaign?
These are only some of the apprehensions that agencies/ad-networks today are facing from marketers on social networking campaigns. Pilot campaigns have been carried out for advertisers of all kinds – Apparels, Sportswear, Cosmetics, Laptops, Jobs and others, but very few advertisers have adopted this channel as a branding medium as a Yahoo!, Rediff or an MSN homepage has been. With Internet advertising becoming extremely RoI focused, it has been a completely unfair treatment on the Social Networking Sites as a medium of brand building. “Internet is the medium to generate RoI while TV is best utilized for branding” – that’s what the CMO of a leading job portal in India suggested, with all their campaigns targeting maximum resume acquisitions. Social Networking as a medium has been dropped mostly because of the lack of advertising RoI obtained. A very fundamental error here being made is that while marketers trust TAM measurements, which is a rough approximation at best, a potential marketing goldmine, in these social networking sites is being ignored. This is inspite of the fact that it’s measured and targeted much better than how TV ad-effectiveness is. Also, what needs to be understood is the variety that each social networking site offers - Facebook users are more affluent and qualified to convert. MySpace attracts so many more viewers that “there's no way marketers are going to leave”. And Hi5 leads the race in the younger age group. Facebook proudly offers the healthiest female: male ratio attributed to the privacy and safety feature associated with it.
A key aspect here is also the impatience of advertisers with social networking medium. Virals, and even banner ad campaigns are run best on a long-term horizon so as to build communities on this extremely open medium to connect to the audiences. As people see the virals, and experience it, they trust it and as an inherent aspect of all social networking sites, people will listen and spread the word themselves. Brand advertisers like Auto, Apparels, Sportswear, Personal Technology, Portals, FMCG, Personal Care, Education and even classifieds should have social networking as a must have medium of all their marketing plans. If the medium is given more time and understood better as regards to the branding opportunities it provides, we can hope that perennial under-achieving inventory makes a come-back very soon and rules the dollars the way Spain ruled the Euro.