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Global Faces and Networked Places: March 2009
Global Faces and Networked Places: March 2009
INSIDE:
Social networks/
blogs now 4th
most popular online
category – ahead of
personal e-mail
These sites account for
one in every 11 minutes online
Orkut in Brazil has the largest domestic
online reach (70%) of any social network
anywhere in the world
Facebook has the highest average time per visitor
amongst the 75 most popular brands online worldwide
Introduction
How social networks are creating and advertisers to connect with their
a potentially transformational audiences. So how do they need to
Report Highlights
change their strategies accordingly?
change in consumer behaviour 1. Putting the growth of social
Consumer engagement within social
Social Networking has been the global networks – popularity and
networks has the potential to change
consumer phenomenon of 2008. engagement – into context
the way consumers are targeted, not
Two-thirds of the world’s Internet
just through the digital medium, but 2. How the audience to social
population1 visit a social network or
through all forms of traditional media. networks is changing
blogging site and the sector now
Whilst a few billion dollars of ad revenue 3. The challenges facing
accounts for almost 10% of all internet
can’t be wrong, the prevailing wisdom is advertisers on social networks
time. ‘Member Communities’2 has
that the current level of advertising
overtaken personal Email to become the 4. What advertisers can do to
activity on social networks isn’t
world’s fourth most popular online find the magic formula for
consummate with the size – and highly
sector after search, portals and PC advertising in social networks
engaged levels – of the audience. The
software applications.
social networks and advertising industry 5. Factors contributing to the
The story is consistent across the world, haven’t quite yet found that magic Facebook phenomenon
‘Member Communities’ has taken a formula to make this happen.
foothold in every major market from 6. Why localisation has won the
The industry is faced with a real ‘Catch-22’ day in many countries
50% of the online population in Switzerland
situation. Part of Facebook’s extraordinary
and Germany to 80% in Brazil. Facebook 7. Where mobile social networking
subscriber growth is due to a clean
has become the largest player on the has taken the greatest hold
design with little advertising clutter;
global stage, dominant in many countries,
consequently, the audience growth 8. What ‘traditional’ publishers
yet localised offerings have won the day
hasn’t been accompanied by a similar can do in the face of the social
in many others.
surge in advertising revenue. On the network phenomenon
However, the growth in popularity of other hand, MySpace’s more customisable
social networks – and the resultant entertainment and content-oriented
broadening audience – is only half the offering – carrying more advertising –
story. The staggering increase in the has been more successful at attracting
amount of time people are spending on advertising revenue, yet MySpace’s
these sites is changing the way people audience is flattening. The industry will
spend their time online and has be watching very closely at which one of
ramifications for how people behave, these fundamental differences in strategy
share and interact within their normal will prove the most successful in
daily lives. attracting advertising revenue in 2009.
Consequently, the global media and This report puts the global social
advertising industries are faced with new network phenomenon during 2008 into
challenges around the opportunities and context, providing insights and lessons
risks this new consumer medium for the networks themselves, advertisers
creates. Social networks provide and the media industry on how to take
competition to traditional publishers for advantage of what’s happening online
consumer attention and at the same around “Global Faces and Networked
time, facilitate new ways for publishers Places”.
1
In this report, the terms ‘Global’ or ‘World’ encompass the following countries in which Nielsen Online
has a NetView panel – USA, Brazil, United Kingdom, France, Germany, Italy, Spain, Switzerland and
Australia. (Whilst Japan figures are shown in certain graphs, Japanese data isn’t included in any global
figures.)
2
Nielsen Online’s ‘Member Community’ category includes both social networking and blogging websites.
80%
1.4%
75% 73% Dec-08
Germany arrives later to the 67% 9.9%
9.9%
70%
2.7%
69%
67% 67% Dec-07
4%
group are accounting for more of the 4%
audience. 2%
2%
0%
-2% -1%
-4%
-6%
-8%
-10% -9%
Source: Nielsen Online, Custom Analytics, December 2007 – December 2008. E.g. Between Dec 07 and Dec 08,
the share of the online global1 audience to ‘Member Community’ sites accounted for by 2-17 year olds decreased
relatively by 9%
1
‘Global’ refers to AU, BR, CH, DE, ES, FR, IT, UK & USA only
Facebook started out as a service for university students but now almost one third of
its global audience is aged 35-49 years of age and almost one quarter is over 50 years
old. In the UK, for example, if the average month-on-month audience changes over
the last six months were to continue; by mid-June 2009 there would be as many
35-49 year olds on Facebook as 18-34 year olds.
The changing audience offers advertisers the opportunity to use social networks as
a vehicle for targeting all demographic groups. In Italy, brands such as Maserati –
traditionally marketed to an older audience – now have fan pages on Facebook.
this conversation.
Channels
Adwords
Billboards
The tone of advertising must be more Broadcasters
Newspapers
authentic Magazines
Although Facebook has come some Figure 8: MySpace and Bebo attract more advertising activity in the
way towards delivering a promise of UK than Facebook despite having a smaller audience
targeted ads within a mass network,
MySpace’s more focused overall
Facebook MySpace Bebo
offering seems to be proving more
fruitful at the moment.
2,036
MySpace is smaller globally than
Facebook and, outside the US, is
1,592
considered more of a niche player
because of its more focused targeting 1,246
towards teenagers and young adults 982
through the vehicles of entertainment 799
639
– encompassing music and video – 530
467 451
and self-expression (decoration
options allow profile pages to be
highly customisable).
Average Monthly No. of Advertisers No. of Campaigns
Reports estimate that in 2008 Audience (10,000s)
Facebook earned around $US300
million in ad revenue compared to Source: Nielsen Online, AdRelevance and NetView, UK, 2008.
around $US1 billion for MySpace. If E.g. Facebook averaged 12.46 million Unique UK Visitors per month in 2008 and during the year had 451
Facebook has made a conscious choice advertisers who ran a total of 982 display ad campaigns
to go for the quantity vs. quality
strategy it has yet to overtake MySpace of the biggest record labels and its effort on MySpace. Personal communications
in the all-important revenue metric. to build brand communities have and entertainment are extremely
Whilst part of Facebook’s huge appeal successfully managed to attract some of relevant for sites such as MySpace whose
is the simple layout of an interface the world’s largest global brands audience is ultimately there to
that carries very little ad inventory, including Cartier and Intel. communicate and interact with friends
MySpace’s offering possibly makes its in an entertaining and personalised way.
Bebo has also capitalised well, for
inventory – of which there is a lot example, in the UK across 2008, Bebo’s Figure 9: Mobile phone networks
more compared to Facebook – easier average monthly Unique Audience (4.7
to monetize, particularly in terms of
dominate most active display
million) was almost one-third the size of advertisers on MySpace UK
immersive advertising. Bebo, also Facebook’s (12.5 million) yet managed to
carrying more inventory than Face- attract almost one and a half times as MySpace UK No. of
book, has also done well in this regard Rank
many advertisers (639 to Facebook’s Advertisers Campaigns
by targeting teenagers and young 451). So, for every 10,000 unique visitors
adults through music and celebrity. 1 T-Mobile 46
Facebook attracted 0.36 display
Facebook is more focused on the advertisers, Bebo attracted 1.37 and 2 O2 42
‘traditional’ social networking MySpace attracted 1.51 advertisers.
3 Vodafone 42
element of communications, while MySpace has also benefited from its
MySpace and Bebo are more focused 4 PC World 40
acquisition by News Corp and being
on the entertainment component. assimilated into the Fox Interactive 5 Orange 29
From an advertising perspective, it’s a Media stable – together with sites like
moot point that monetizing content 6 Lastminute.com 27
Photobucket, IGN, Rotten Tomatoes and
is easier than monetizing AskMen – which has provided MySpace 7 Sky 26
communications; if so, MySpace and with one of the most mature and
Bebo have the advantage. 8 Virgin Media 22
successful display ad models within the
For example, MySpace launched its social network space today. 9 Pogo 20
HyperTargeting ad solution allowing In the UK, mobile network operators – 10 Halifax 16
brands to tap into the self expression such as T-Mobile, O2 and Vodafone – and Source: Nielsen Online, AdRelevance, UK, 2008.
element of social networking, it also media companies such as Sky and Virgin E.g. T-Mobile ran 46 different display ad
has a joint music venture with many – dominate the most active advertisers campaigns on MySpace UK during 2008
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Facebook’s u-turn in February 2009 on
retaining users’ content and licenses
after they terminated their account Source: Nielsen Online, NetView, Home and Work Data, December 2008 (*Home only).
E.g. 30% of the world’s online population visited Facebook in Dec 08
came after protests from members and 1
‘Global’ refers to AU, BR, CH, DE, ES, FR, IT, UK & USA only (JP figure not included in Global figure)
uproar in the blogosphere.
Facebook also incurred the wrath of its Factors contributing to Facebook’s Architecture. Inventive features (including
members over the Beacon advertising rapid growth applications, invites, requests) and open
system that sent information about architecture - including the masterstroke
Design. An organized, simple and to open the platform to applications
members shopping habits and activities
easy-to-use interface – with much less developers – have increased word-of-
on other websites to Facebook – mainly
advertising compared to many of its mouth and visitor engagement.
to allow targeted ads to be served on
competitors – is likely to appeal to a
Facebook. This caught many members Privacy. Members have more control
wider audience.
off guard and, after initially defending over who sees their content than in
the system, Facebook backed down to Broad appeal. Facebook isn’t targeted many other networks where non-
allow members to opt out of it. towards a specific demographic like many members can access personal content –
other players (e.g. StudiVZ to students or a concern for many people.
In September 2006 the “News Feed”
Bebo to young adults) – ironic considering
feature that allowed members to track Media coverage. Facebook’s early
that it started out as a network for
their friends’ Facebook movements was momentum was given a huge boost due
university students.
greeted by protests that numbered in to the large amount of free media
the hundreds of thousands of people Activity Focus. Facebook is focused on coverage it received.
within a day. Within 48 hours of the connecting as opposed to entertainment.
roll-out Zuckerberg had openly stated It can be used for multiple networking
the site had “messed up” and improved activities – reuniting old friends, business
the privacy controls. networking, dating, sharing photos,
status updates. Facebook is Reunion,
Facebook has now given members
LinkedIn, Yahoo! Personals, Flickr and
comment and voting rights over
Twitter all in one.
Facebook’s future policies on how the
site is governed.
10
11
Copyright © 2009 The Nielsen Company
Mobile Social Networking is Figure 15: Social networks have the greatest mobile web reach in the UK
Taking Off and US
As Mixi in Japan shows, the increasing
popularity of social networks has Unique Mobile Internet Audience (000s) Q4 2008
resulted in increasing demand to access
them on the move. Mobile is a natural fit 1,961
for social networks, as consumers are
used to connecting with friends via
10,618
mobile calls and text. Using the phone
to access social networks doesn’t require
much change in consumer mindset.
Subscribers access social networks on
their mobile through three primary 773
means: by browsing over mobile Web, 22.7% 865 401
through downloaded applications and 19.2%
by SMS (text-messaging).
485
UK mobile web users have the greatest 12.3%
propensity to visit a social network 10.6% 10.6%
through their handset with 23% of them 6.6%
(2 million people) doing so, compared to
19% in the US (10.6 million people). The
numbers of people doing so are a big UK US France Italy Spain Germany
increase on last year – 249% in the UK
and 156% in the US.
Source: Nielsen Online, Mobile Media View, Q4 2008. E.g. 23% of UK Mobile Web users (1.96 million people)
The most popular social networks via visited a social network through their mobile phone in Q4 08
PCs/laptops tend to be the most popular
via mobile too. Facebook is the most
popular in five of the six countries where
Nielsen measures mobile activity – only
Xing in Germany bucks this trend.
Mobile applications for handsets such as
Apple’s iPhone are playing a substantial
role in the expanded mobile use of these
networks. Soon after the launch of the
3G iPhone, Facebook, with one of the
most popular iPhone applications
available, surpassed MySpace in mobile
usage in the U.S.
SMS (text message) is the third way
users can interact with their social
networks on the go. Primarily used for
“status updates,” users can register a
phone to send text message posts
directly to their user profile. By the end
of 2008, Nielsen estimated that almost
3 million U.S. mobile users were texting
Facebook on a regular basis.
12
13
Copyright © 2009 The Nielsen Company
Conclusion: Social Networks provide the trigger to improve the potency of advertising across all forms of media
The social networking phenomenon is The Industry faces a huge predicament. This will involve a substantial trial and
dramatically changing the way people The factors behind Facebook’s stunning error process and is only achievable if the
behave and, consequently, offers new growth – a focus on connecting through a social networks, advertisers and their
challenges and opportunities to the simple and relatively advert-free design – agencies work more closely together.
global media and advertising industry haven’t attracted ad revenues consummate Whatever the successful ad model turns
alike. Social network and blogging sites with the size and engagement levels of its out to be, the messaging will have to be
now account for almost 10% of all audience. On the other hand, MySpace’s authentic and humble, and built on the
Internet time yet remains, with a few audience is flattening but its ad model – principle of a two-way conversation –
exceptions, a largely un-monetised form built around a richer content offering, not a push model – that adds value to
of media. The industry is still in its more in line with traditional online the consumer.
infancy in regards to successfully publishing – is doing better at attracting
If this magic formula is found, the
adapting its traditional ‘modus operandi’ ad revenues.
benefits could be truly incredible, having
to take advantage of this fundamental
A magic formula to overcome this the potential to transform the potency
change in consumer behaviour.
predicament and effectively monetise of advertising across all forms of media
Whilst social networks provide significant online’s most heavily used sector, to connect with target audiences and
competition for traditional publishers in hasn’t yet been found. However, a major overcome the current distrust consumers
terms of consumer attention, they also ingredient will be a fundamentally new have with advertising.
provide significant opportunities. approach to the online ad model in
Publishers can improve engagement with terms of both ad units and ad inventory.
their own audiences – by tapping into
consumers’ increasing desire to create
content – and can use social media to
syndicate their content beyond its
traditional confines to a much wider
audience.
14
For more information on the report, or any of these solutions, please contact:
International: USA:
Alex Burmaster, Communications Director, UK & EMEA Nic Covey, Director of Insights
alexander.burmaster@nielsen.com nicholas.covey@nielsen.com
+44 20 7014 0590 +1 312-385-6718
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