The rise and rise of Social Media

All the evidence coming out at the moment suggests that the wise money is backing social media as the place to be for the foreseeable future, as sites continue to display popularity and success.

The stats

Here are some recent statistics ...

Usage

Some 30% of the UK's 37 million Internet users in 2007 (or 11 million of them) visited social network sites regularly (eMarketer)

60% of UK Internet users ages 16 to 54 have created a social network profile, more than double the 27% who reported having one in 2007 (Universal McCann).

Facebook is about to overtake MSN Messenger as the online application people spend the most time on, according to Nielsen Online. Between April 2007 and April 2008 the number of minutes spent on Facebook grew from 500m to 2.4bn, while minutes on MSN/Windows Live Messenger fell 3.2bn to 2.4bn (Bubble bursts for instant messaging).

Advertising

Adspend on social networking sites is expected to rise 77% from £65m to £115m this year in the UK, with a projected spend of £285m in 2012, a 148% increase over 2008 (eMarketer)

Valuations

$15bn valuation for Facebook implied by a Microsoft investment of $240m last year

News Corp paid $580m for the parent company of MySpace 3 years ago, just as social networking was taking off. This looks like a phenomenal investment.

This year, AOL paid $850m for Bebo, which claims more than 40m members

LinkedIn has just raised $53m of venture capital giving it a "pre-money" valuation of $1.015bn

(LinkedIn networking site joins $1bn club.)

A recipe for success

The conclusion is:

• Consumers are using them
• Advertisers are spending on them
• Investors are investing in them

This recipe for success ensures that social networks will remain at the forefront of developments for the foreseeable future.

An opportunity for marketers

Any media generating so much attention from consumers is an opportunity for marketers. Certainly a lot of brands are experimenting in the space, but as yet it is proving difficult to crack.

The challenge for marketers is that users of social networks regard them as their own. It is not that advertisers are not welcome per se (users understand that someone has to pay for the service), it is that users don't want advertising which intrudes into their personal space.

This means that the opportunity for marketers must revolve around adding to the user experience. Campaigns that make the experience better can be highly effective, while campaigns that simple push a marketing message are doomed to fail.

| Tom Barnes | 2008-07-07