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Social networks: why all the fuss?

Suddenly, everyone wants a social network. From Dr Martens shoes and radio station Heart to FHM and fragrance group Coty Prestige, they all want in. What's going on? Any what makes these social networking sites so different to the likes of Geocities from over six years ago? Michael Nutley, explains why big brands are getting so worried

Suddenly, everyone wants a social network. From Dr Martens shoes and radio station Heart to FHM and fragrance group Coty Prestige, they all want in. What's going on? Any what makes these social networking sites so different to the likes of Geocities from over six years ago? Michael Nutley, explains why big brands are getting so worried

The first thing to note is that the internet audience has changed dramatically in the past two years, as have its expectations of the medium. This is mainly a result of the explosion in the uptake of broadband. Research has shown that with a high-speed connection, you’re more likely to spend more time online, partly because the experience is better and partly because you’re not paying by the minute. But broadband also means that you don’t have to interrupt your time online when someone else in the house wants to use the phone, so it’s easier to stay online for longer, and it’s harder for parents to keep track of their childrens’ internet usage.

This matters because social networking is predominantly a young person’s thing. Sure there are plenty of thirty- and even forty-somethings on MySpace, but the majority of the audience for all these sites is under 25.

And that’s the next reason companies are getting excited about social networking sites. Advertisers have watched media fragment over the past 20 years with the rise first of cable and satellite TV, and then of digital channels. They’ve watched as the youth demographic has all but vanished from the radar of traditional media. Now that audience has reappeared on MySpace, Bebo, Faceparty and dozens of other sites.

But what’s scaring advertisers is that the rules of engagement seem to have changed. Just as traditional media owners are struggling with the fact that the digital revenue streams they’re building aren’t bringing in as much money as the offline streams they’re replacing, advertisers are worried that the new properties won’t deliver the streams of prospects that the old ones used to. That’s the reason behind the number of companies currently hiring kids or students to tell them what the young people get up to on this latest generation of sites. It’s also the reason behind News Corporation’s purchase of MySpace last year. Whatever else it may be, it’s a lab to allow Rupert Murdoch’s executives to study the new rules of engagement with teenagers.

And that in turn is a big part of what’s driving the current explosion of interest in social networking. Certainly there are companies like Dr Martens that want to target the youth audience. There are media properties like FHM that can’t afford to be left behind as the media consumption habits of their audience change, along with their view of what’s cool. But equally there are companies who recognise that the audience that grows up finding out about films and music via these sites will expect the same kind of experience when they come to look for mortgages, cars or health insurance.

However, the jury is still out on whether brands can build their own social networks, or whether they’re better off working with existing sites such as MySpace. As I wrote in a recent leader in NMA, there are many factors that militate against the success of branded communities; the need for long-term commitment, for example, and the need to give up at least some control to users. It’s also true that most brands are neither interesting nor cool enough to sustain a user community around themselves. And from Wal-Mart’s recent experience, it’s clear that using the cool new technology is simply not enough to make you cool.

And, in an echo of the first site build boom, even if your brand ticks all the right boxes, once you’ve built your social site, you still need a marketing budget to tell people about it.

About the author:
Michael Nutley is editor of NMA