The rapid evolution of social media has led to consumers controlling brands rather than marketers. Influencing news coverage through press releases and media relationships is far more difficult now with news channels creating and depicting stories hand-in-hand with the general public. 30 percent of frequent social networkers trust their peers' opinions when making a major purchase decision, but only 10 percent trust an advertisement (1). 77 percent of online shopper's read consumer reviews before making a purchase (2).
Participatory websites like YouTube, Wikipedia, and Flickr now account for 12 percent of all web traffic (3). Content generation on social media sites is still low, with Hitwise report findings suggesting that less than 1 percent of internet users are generating content, with the rest only viewing the generated content (3). Sites that are simpler to edit like Wikipedia See user participation (editing / uploading) to the tune of 4.38 percent. However, content generation on video and photo sites is low (less than 1 percent).
Social Media spending was 7.8 percent of the total Online Marketing Budget allocated by US Marketing Professionals in Q3 2007 (4). Brand marketers are realizing the importance of social media. Monitoring social media sites like news and blogs to check any negative publicity and support positive publicity is crucial. Further, companies should keep track of emerging trends on social media sites and modify business strategy accordingly.
Social sites are also realizing the need for better advertising and tracking platforms. Google's OpenSocial platform and Facebook's SocialAds are steps in this direction. Google's recently launched OpenSocial platform has been grabbing a lot of attention. Social gadgets built using the OpenSocial platform will work across many popular social networking sites including Orkut, MySpace, hi5, LinkedIn, Ning and SalesForce. Google's portable social gadgets are poised to give tough competition to the broadly popular Facebook platform.
- JupiterResearch Press Release [http://www.jupiterresearch.com/bin/item.pl/press:press_release/2007/id=07.03.12-social_network_sites.html/]
- Jupiter Research – "Retail Marketing: Driving Sales Through Consumer-Created Content"
- Hitwise US 2.0 Research Note: Measuring Web 2.0 Consumer Participation, June 2007
- Coremetrics, "2nd Annual Face of the New Marketer", provided to eMarketer, October 30, 2007