• Embed Doc
  • Copy Link
  • Readcast
  • Collections
  • CommentGo Back
 
Close
Social networks threaten advertising growth
By Tim Bradshaw, Digital Media CorrespondentPublished: January 15 2009 01:41 | Last updated: January 15 2009 01:41
Two-thirds of advertising agencies are not prepared for the industry changes prompted by socialnetworks and new forms of digital media, a report has found.The Institute of Practitioners in Advertising, which will publish the “Social Media Futures” reportcompiled by Future Foundation next week, has warned that advertising agencies face growth of just 1.2per cent a year by 2016 if the industry fails to tackle the changes to the media created by sites such asFacebook, YouTube and Twitter.Social networks enable consumers to pass on information about products and services, andrecommendations from friends are more influential than traditional forms of advertising.Advertisers are already taking advantage of the trend, with the
Cadbury
“Gorilla” spot being viewedover 10m times on YouTube as well as being aired on television.The Dove “Campaign for real beauty”, which advertised
Unilever
’s cosmetics range, was also boostedby a YouTube video showing a high-speed transformation of a model’s natural face to the made-up andtouched-up final version which appeared on a billboard.But not enough agencies are adjusting to the online world, the IPA warned. In its worst-case scenario,the resulting decline in paid-for advertising space could see £16m ($23m) of revenues lost by theindustry by 2016, if agencies fail to create new products and services to cater to the social media world.However, the report says that two-thirds of that decline could be made up by creating new forms of webcontent that contains branding messages, and by analysing the data expressed on the web.Clients’ investment in new content and rapid data analysis will increase by around 5 per cent, accordingto the IPA’s survey. Other sources of revenue derived for social networking include consultancy ande-commerce.“The current downturn will accelerate these trends in agencies as everyone is looking to innovate andstand out from the crowd,” said Moray MacLennan, IPA president and chief executive of M&C SaatchiWorldwide, an agency.“I don’t think [social media] is a replacement for paid-for media, it is just going to be a challenger for[consumers’] time and attention.”Social networks themselves are still figuring out how to make money from advertising on their sites.Pricing for generic banner advertising on social networking is relatively low compared to other sites,because their users are logging in for communication rather than commerce.That has prompted both networks and advertisers to look for more innovative ways to connect withconsumers.“Within this environment, one needs to acknowledge that more often than not you are interruptingprivate conversations,” said Mr MacLennan.Joe Staton, planning director at the Future Foundation, who co-wrote the report, said that marketersneeded to secure “permission” to approach users on social sites.“As people are being more considered about purchasing, they want to go out and find informationthemselves rather than just receiving it,” he said.
CopyrightThe Financial Times Limited 2009"FT" and "Financial Times" are trademarks of the Financial Times.
Privacy policy
|
Terms
BUSINESS
UK
FT.com print article http://www.ft.com/cms/s/45e61636-e25c-11dd-b1dd-0000779fd2ac,d...1 sur 2 17/01/2009 15:48
of 00

Leave a Comment

You must be to leave a comment.
Submit
Characters: ...
You must be to leave a comment.
Submit
Characters: ...