Tuesday, July 21, 2009

Social media advertising

So, what's so compelling about this picture? Apart from it being an eye candy, it won the first Sugoi Facebook photo contest. Sugoi giveaway was a simple performance wear and its generated 100s of votes and fans on the Sugoi page. Talk about engaged promotions and "word of mouth" marketing.

Social media advertising is not about display ads , it all about engaging the consumers in the brand message.

There was a great article published recently from Josh Bernoff - Forrester analyst on media spend budget. I had made a conjecture around a year ago (when the recession started) that media spend on digital (aka internet) related ads will increase; and Josh fully concurs with this. Here are some interesting nuggets -
  • The result is that digital, which will be about 12% of overall advertising spend in 2009, is likely to grow to about 21% in five years. Along the way overall advertising budgets won't grow much
  • Social media, which will account for $716 million this year between social network campaigns and agency fees, will generate $3 billion in five years. And this doesn't even count displays ads on social networks (which are in the display ads category.) Of all the parts of digital marketing, social network marketing one is poised for the most explosive growth.
The key to social media advertising is engagement vs. the traditional "push" or broadcast model. Consumer are now looking to engage with and drive what they want to see in a brand vs. brand pushing its strategy to naive consumers. The world is beginning to change and the interesting thing is that its a global phenomenon.
Consumers , all over the world, are spending oodles of time on the social media vs. traditional portals (bad news for Yahoo). And this phenomenon is seeing the largest y/y increase. As per Nielsen report, the engagement is growing 6 times more as compared to other mediums. Currently, almost 10% of internet time is being spent on social media - and this is a global phenomenon.
So, my prediction is that social media type of "engagement ads" will supplant display ads in the near future and soon "search ad" budgets will decrease as well. That's definitely not good news for Yahoo or Google. But hey, there needs to be a change every decade or so and I can see it happening.

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