Downturn in Social Networking?

According to Hitwise data issued last week (while I was on vacation), the market share of visits to social networking sites fell 19% between June 2007 and June 2008. What that means is that of all sites that people in the US visit on the Internet, people were less likely to visit social network sites than they were last year at this time. As of the first week of June, 6.82% of visits to Web sites were to the social network category, according to Hitwise’s blog.

If the downward trend in market share of visits continues, and is correlated with data from other researchers (comScore, Nielsen, Compete), then there could be trouble in the waters for social network sites. I’ll be watching that data point carefully.

The good news is that average time spent on social network sites continues to climb, according to Hitwise – up 9% to 27.5 minutes per month in June 2008 vs. June 2007. MySpace was still by far the dominant social network based on market share – but things look very different in the UK, where Facebook and Bebo are more dominant.

Vacation

On vacation this week – on deadline next week. Posting will be light.

Twitter’s Revenue Model: Charge Commercial Users

Twitter co-founder Evan Williams yesterday opened up to TechCrunch’s Michael Arrington about his revenue plans — details many in the Web 2.0 community have been eager to learn. Even Arrington expressed surprise about how revealing Williams was.

In a transcript of the interview (also in video), Williams says:

The broad strokes on the matter are obviously Twitter is being used for a lot of commercial purposes right now, in addition to social purposes. We think that works pretty well. We think there’s a lot of companies that we’ve talked to that seem to be getting a lot of value out of it. If that continues, if that becomes a rich world for users and the companies, we think we can extract some revenue from that.

And later, a revenue model that seems to suggest Twitter might charge for businesses to promote their specials or answer questions:

One scenario that’s kind of interesting and I’m sure you’ve noticed, [there’s a lot of] questions and answers over Twitter. You combine instant answers and mobility and the fact that people are traveling around me asking a question. Like, “Where should I have dinner in the part of San Francisco?” Or, there are companies now that are sending, they’re little cafes that are sending their lunch specials for today. If you can make that querriable or just allow users to opt-in to receive that kind of stuff …

Other models that Williams discusses: search ads (Twitter confirmed its purchase of Summize yesterday) and traditional ads (which Williams says he’s not really interested in doing).

Twitter has been gaining momentum for several months now and a lot of companies are active there – Southwest, Comcast, Zappos, to name a few. It will be interesting to see how Twitter defines what is a promotional tweet and what is not, and what is a commercial use of Twitter and what is not. If Comcast finds someone complaining about their service on Twitter and offers to help (as it did with Arrington), then should Comcast have to pay Twitter for that?

Ford’s Social Media Expert

Not too long ago I posted about Allstate’s new president of social networking. I couldn’t (and still can’t) fathom why the company needs someone in that role.

Now comes news that Ford has hired a head of social media. This time, the executive, Scott Monty, a former executive at virtual agency crayon, will head a 5-member group that’s part of the corporate communications department, according to an article in Adweek.

I’m not sure this is too smart either. On the one hand, it’s admirable that big corporations are realizing the importance of this and are not ignoring it. A president’s title is certainly an achievement. But a president of social networking? Sounds like title overkill to me. Or a Dilbert cartoon.

On the other hand, putting the head of social media in the corporate communications group, as Ford is doing, doesn’t seem to make sense either. Social media encompasses many facets of a company’s business, and relegating it to corp communications seems to say to the world that Ford views it merely as a way to manage outbound information, not as something that can support customer relations, marketing, advertising, product development and more.

As Forrester analyst Peter Kim says in the Adweek piece:

“The biggest challenge is moving away from thinking about it as marketing and PR. It’s about product development, it’s about IT. It’s got to cut across all functions of the company.”

Hopefully Monty will have the authority to work with these various functions and bring Ford fully into social media.

British Airways Has a Social Network. Why?

Why do marketers keep launching their own social networks? Is it vanity? A sense of control? An attention-getter that’s just a pawn in a larger marketing campaign? I can’t figure it out.

British Airways this summer will launch MetroTwin - a network aimed at pairing up New York and London and finding “twins” (similar neighborhoods, hot spots, etc) in each city. Apparently people who live in one of the two cities are supposed to join the network and tell others about their favorite places.

Why would this be interesting to anyone:? OK, maybe if there was an incentive, a contest, a promotion, it might get me to visit. But why establish a social network profile on an airline-sponsored Web site? Why? Why?

Banner Ads Get Widgetized

One of the online ad tricks that is gaining steam is making banner ads more dynamic. The idea is that when a consumer mouses over an ad, it changes in some way, or it offers different places where someone can click depending on their interests. Some ads are even designed to be “grabbable” – allowing consumers to place them elsewhere on the web.

All this pushes widget advertising in a new direction that I think makes a lot of sense. Much more sense than creating a standalone widget to promote jeans or a movie and hoping that someone interacts with it. A lot of these kinds of widgets get lost and forgotten in the sea of Web content.

Several companies are widgetizing advertising. WidgetBucks is one – it is delivering shopping links dynamically within a self-contained ad. VideoEgg is another: Its AdFrames program has several new features to allow consumers to pass along ads or grab them, and to add shopping details to banner ads.

“We need to replace the banner with portable media experiences that leverage the power of video, feeds, maps and localization,” VideoEgg’s CMO Troy Young told MediaPost’s Online Media Daily in an article today.

I haven’t been a big fan of the widget ad business thus far, but the closer widgets get to looking like amped up banner ads, the more likely it will be that major brands will be interested in using them.

Social Media Ad Spending Still Growing

Magna Global is out with its Emerging Media forecast (oddly, it considers search an emerging media). US ad spending growth on social media was 61% last year to $1.1 billion, Magna says. But growth is expected to fall to 37% in 2009, to $1.4 billion.

Magna’s forecast takes a “bottoms up” approach and includes only media expenditures, not marketing costs or creative development costs. For this reason, the forecast is probably low, because a significant portion of social media marketing spending is not in the form of media buying but from creating integrated promotions, widgets, applications and other things that don’t look, feel or act like “advertising.”

Still, with very few companies putting out forecasts for social media ad spending, this one is definitely worthwhile.

Summize is Cool

This is going to make me — and a whole lot of other people and companies — use Twitter a whole lot more.

On a related note, why do people I don’t know keep finding and following me even though I haven’t posted a tweet in months (bad social media expert, bad, bad, bad)? Is anyone else disturbed by the image of strangers following you?

More on Google’s MySpace Challenges

Much has been made over Sergey Brin’s comments about the monetization problems Google has been having with social networking. Many pundits have used Brin’s comments as a sign that social network advertising doesn’t work. But it’s not social network advertising that doesn’t work. It’s Google’s search advertising on social networks that’s at fault.

Eric Savitz (who worked with me at The Industry Standard back in the day) discusses this problem, citing research by Pali’s Richard Greenfield. The conclusion that Greenfield and Savitz come to: Google’s algorithms are out of whack. A people search for “Dan” returns a search link for DNA test kits. A search for “Beth” returns Pottery Barn bath products.

I have my own example: recently my MySpace home page carried a Google ad for moving trailers in Chicago IL. I haven’t lived there for more than 10 years.

And if you search for “Sergey Brin” on MySpace, you get ads for Brink’s Home Security, ADT (also home security) and Brain Health from RevolutionHealth.com. Do the same search for Sergey Brin on Google’s home page and no ads appear at all. A search for “Dan” on Google turns up an inexplicable sponsored link for “Brushes for Sweepers” from www.Sajas-Group.com.

So is Google’s philosophy on MySpace that an out-of-whack ad is better than no ad at all? Or does it just want us to laugh?

A President of Social Networking … at Allstate?

Allstate now has a president of social networking. I’m not sure if this is a sign that social networking has truly infiltrated corporate America, or a sign that companies are still doing social network marketing the wrong way.

From the press release:

“In her role, Rogers will be responsible for building a social network that connects middle-market consumers—often alienated and confused by a myriad of financial products and services—with other like-minded Americans to share experiences, insights, and wisdom. Social networks are a new approach to harness the collective experience of consumers through interactive communities, affinity groups and new external relationships.”

So Allstate is building its own social network. I can see how some “alienated and confused” consumers might look to Allstate for information about insurance, but a social network on the Allstate site? I just don’t buy it. Very few companies can be successful in creating their own social networks, and the ones that are have products that inspire passion. When was the last time your insurance policy made you feel passionate?