Social networks ideal forum to advertise, shows study

Social networks populated by dedicated and obsessed users may be great for advertising.

25 April, 2007

A study has revealed that over 70% of Americans in the age group 15-34 are actively using social networks, that a lot of this usage happens during ‘prime-time’ and that it is helping companies build meaningful and profitable brand connection with the users.

The study, conducted by the Fox Interactive Media, examined the growth and marketing power of online social networks.

Fox Interactive Media, which conducted the study in partnership with Isobar and Carat USA, considered feedback from about 3,000 internet users in the United Sates as well as MySpace clients.

The research brought out fresh details about the marketing opportunities that social networking sites are making available to advertisers. For example, 40% of the users of these sites said they are actually using these sites to get more information about brands and products they like.

According to the Fox Interactive Media study, Adidas, sports apparel manufacturer, and Electronic Arts, video game developer, attributed more than 70% of their marketing returns on investment to the ‘momentum effect’ – which is marketing jargon for how a brand spreads through a social network beyond the extent to which the company advertises, for example, by word of mouth.

Adidas, the research revealed, directly influenced 1.2 million people to buy its product and, after those people talked to their friends, influenced 4.2 million more people. Similarly, Electronic Arts directly influenced 1.8 million consumers and indirectly influenced 4.5 million consumers to say they intended to buy its products.

The inference from the study is that, with social network-based advertisements offering returns on investment far more than those of the average online advertising campaign and the overall average of televised ad-campaigns, social networking-based marketing strategy sells well.