Social Networks the ‘Movies’ of the ’09 Downturn: Netpop

Posted on by Chief Marketer Staff

Americans are spending almost twice as much time on social networks as they did two years ago, according to a new study by Netpop Research.

Activity on social networking sites favored in the U.S. such as MySpace and Facebook increased 93% between 2006 and 2008, the Web research firm noted in its new report, “Social Networkers U.S.: Who They Are and What They Mean for Next-Generation Online Advertising.”

The two networks now draw regular users about evenly, with 63% of U.S. social networkers using MySpace, 60% using Facebook and—perhaps obviously—34% using both. Facebook has posted strong expansion numbers in the last two years.

They’re not all just lurkers, either. Approximately 105 million U.S. broadband users, or 76% of the total U.S. broadband population, have actively contributed something to a social networking site: anything from publishing a blog or Web site to posting to a wiki or uploading video content. About 40 million, or 29% of that population, make those contributions regularly—outnumbering the 33 million who don’t contribute to social networks.

The growth signals a shift in Web use away from finding content and shopping and toward the Internet as a communications link. Netpop found that people online spent 10% of their time shopping, down from 12% in 2006. Time spent talking online and sharing information with others has increased 18% since 2006, according to the study.

And the typical user of a U.S. social network constitutes a very attractive demographic for brand marketers: Young (18 to 29), female, spending an average of $101 a month online—26% more than non-social media users spend online—and influential, connecting with an average of 110 people in a typical week.

“Social media will play the same role in this recession that movies played in the Depression,” Cate Riegner, Netpop vice president of research, said in a statement. “The growth of social networking is still accelerating and the bonds consumers are developing with friends and groups of like-minded people are just beginning to shape behaviors. Companies need to be there, talking to both their existing and potential fans.”

As the economic outlook darkens, some marketing research firms have predicted that advertisers will cut back on efforts in non-traditional channels such as social networks. Last December eMarketer became the latest forecaster to cut its prediction for spending on marketing campaigns within social networks. The firm now says marketers will spend $1.2 billion in those channels in 2009, down from an earlier projection of $1.4 billion.

“CMOs have been discouraged, understandably, by the poor performance of standard online as formats in social media spaces,” said Netpop president Josh Crandall. But current attempts at advertising in social networking environments have been limited to traditional display advertising. ..Understanding those environments and working on new approaches to advertising will become increasingly important as social media consumption grows.”

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