Tuesday, June 1, 2010

Social Networks and Marketing

Consider the following facts:

1995: the first social network is born - classmates.com
2004: Facebook appears with 1 mln users
2007: 50 mln users on Facebook
2008: 100 mln
2009: 350 mln
today: over 400 mln unique Facebook users

  • Facebook.com is 6th most visited site in the world with 300 mln unique users each month
  • 10% of total time spent on the Internet is in social networks
  • 3.3 full years of videos is viewed on YouTube every day
  • 40 mln messages is being exchanged on Twitter every day
  • March 2010: Facebook beat Google in the number of unique visitors

What is the secret of popularity of social networks? Maybe some geographical segmentation will provide us with some insights. Spain is # 7 in the world when it comes to using social networks (by unique users and traffic) and #1 in Europe. Spain numbers:

Does it mean that people in Spain prefer cyberactivity to going out and have a great time partying and chatting to friends? No way! This is one of the most sociable countries I have even been to. So what is this compensation in communication about? People don't spend time on the web just for the heck of it. There must be something bigger, more cruel, more addictive than merely reading up the updates on each other's profiles.

The emotional link people form with social networks is enormous. It sucks you in like a huge funnel and it is difficult to get out. You go about checking different electronic media in search of updates. You don't check you e-mail just because you feel like typing in your user ID and password. Well, maybe some people derive some sort of deviant pleasure from the process, but most of us do it to see if there is anything new the world has to convey to them. Aha! So that's what we are looking for - information. Same old trick. That's why newspapers are printed and TV programs are made. The world is still hungry for information but the distribution channels have changed. We are moving from the search mode (Google age) to the social mode (Facebook age). From statics to dynamics. In other words, 

instead of past orientation (origin) we reorient ourselves towards future orientation (destination). In terms of positive psychology, we co-create the reality ourselves in an emergent way by being part of these vast social groups. It makes us feel important. It links us stronger to the world. It makes us feel connected. Perception defines reality.

That all would have been fine, had it not been for evil marketers. They were among the first ones to spot the migration patters of information exchange behaviors and moved to social networks together with the rest of civilized world. Think about the types of contextual ads you see on your Twitter or Facebook pages. The sociodemographic information that you have shared with that particular network (age, location, languages you speak, interests, etc) is being traded behind your back to get your attention as a customer. Alternatively, how many funny ads (pictures, videos and audio files) get shared with you either via a social network or e-mail? Remember Will It Blend from my previous post? It's funny, it's just too good not to pass on. That is exactly what the companies want from you.

Another example. One of your friends bought a product. Let's say a Philips grooming system. When people are happy (and proud) of their new acquisitions, they want everyone to know about it. Thus, they would twit or change status or post an update that they are the proud owners of the new fantastic multi-functional Philips grooming system. Whom would you trust more - a commercial, a salesman or your friend (even if it is a virtual friend, but you sort of believe that it is a real person)? The answer is obvious and that is why social networks are a lucrative playground for marketers. 

There are some "cool" brands like Google or Apple, but most of brands are plain boring, and that's where the major battles take place - promoting "boring" brands via social network. Let's see what we have in the Hall of Fame:
  • Dell - the brand that has most followers on Twitter (more than 1.5 mln)
  • Obama - 7 mln friends on Facebook and 3 mln on Twitter
  • Reto Special K (Kellog's) - ROI doubled after their Facebook campaign
  • IKEA - Facebook Showroom - this is really cool, let's watch it 

Now, it's time for Hall of Shame or how social networks can significantly damage your business:
Conclusions. Social networks are already deeply ingrained into our daily lives. Playing "I'm above it" part will leave you on the curb. Spending hours on Facebook (unless you work for them) is from the area of sociopathy. Finding the balance and leveraging on the opportunities provided will help you to move through this Homo Informaticus stage. There are perils on the way. There are privacy concerns. There are ethics concerns. Even before you go to an interview, a recruiter will google your name. And of course the greatest peril: what do you do when you get a message: "Your mother-in-law" wants to be friends with you on Facebook"?

This post was inspired by David Gracia's lecture: "Oportunidades de Marketing en Redes Sociales"


  1. I think we have made ourselves way too available through text messages, social networking sites, email, mobile phones and instant messages. It has reached a point where one can walk into a restaurant and see half of the place on their mobile devices messaging away!

    I think a majority of peoples thinking is that it is important to respond to someone via electronic messages INSTANTLY and overlook the fact that the person with them has a verbal instant message - F-off!!!!!??????

    WOW what a fun date!

    Nice post Sergey!

    You U.S. FAN
    Curtis Lovell II

  2. Hey Sergey,

    Great post!!! I like it when you say "The world is still hungry for information but the distribution channels have changed." Its absolutely true.

    Regarding the ethics or privacy issues, I believe its only the older generation who is worried. Don't you think that at-least the newer generation is not at all worried about privacy. Maybe they are more open to sharing every small bit of info with the world around them. And we are in an information age or "Homo Informaticus stage" where maybe people create online data for a recruiter to google them!!! :)

  3. Yes, Pranitha, I agree that privacy may not be an issue in some instances, but I am concerned with property rights in case of Facebook, for instance. Since every photo that I upload belongs to Facebook, what do I have left? That is the reason why some of my friends are not using Facebook for posting pictures any more. This creates even more dispersion. Soon we will be using millions of different technologies to get to each other. Ag, I miss the times when the messages were exchanged with mail pigeons :)



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