Canadian Marketing Blog

Social Networks And Ad Spend - Should We Change What We Mean By Ad Spend?

eMarketer has reported $1.2 billion in projected advertising spend within social networks this year (an amazing 70% of money being spent is between MySpace and Facebook). As 37% of the US adult population and 70% of teens are frequenting social networking sites, it is a no-brainer that marketers and advertisers are keen to tap into these entities.

As more dollars shift to digital , eMarketer pegs total ad spend of $4 billion worldwide by 2011 against online social networks alone. Those are serious numbers. Naturally, the next question is "what will result from that spending in terms of effectiveness?"

My belief is that before we label social network marketing efforts as "ad spend", we should take a step back and see what is intended for those dollars and how they will be truly allocated. We know that Users do not want to be advertised to, so it may be misleading in terms of the investments marketers will make.

As I have previously written about over at The Client Side Blog and have recently read re:Chris Brogan's and Mack Collier's opinions, I wonder if we should begin segmenting our budgets to reflect "engagement spend" or "community spend" or "conversation spend"?

Outside of the online world we isolate budgets for sponsorship, local area marketing, community events etc.., all with unique objectives, goals and outcomes. So perhaps we should spend some time reviewing what we hope to achieve in social networks and take it from there. Lumping it all under advertising just sounds too easy.

The eMarketer study shows that brands see a huge opportunity to engage Users in social networks. My hope is that we are beginning to think beyond interruption and approach interaction as a platform. Marketers will have to challenge themselves to find the right balance of novelty, utility and relevance for todays consumers. Our best hope is that a good chunk of the "ad spend" goes to something other than ads.

For me, it's probably a little too simple, because I don't know all the dynamics, and because I can't tell you the tracking for what your ROI is for ads versus social media spending. I can tell you what my gut says, and that's this: The effects of a company spending on their community in a way that the community feels grateful for the experience just HAS to be way better than seeing a brand impression in a magazine or a local newspaper.

If it's a toss-up between buying a quarter-page ad in a local town paper or buying refreshments for a Twitter meetup or a PodCamp, I think people who attend those types of things would appreciate the support more than an ad.

The online spending opportunities are definitely starting to show up, and some of them might be ludicrous, while others might be just the thing. I'd say this: I believe that the opportunities aren't as well defined yet, so that lazy spenders might not yet be able to play along. But someone creative and just a little adventurous might get the opportunity to leapfrog their results by trying something new.

I look forward to hearing other people's thoughts on this.