Advertisers Face Hurdles on Social Networking Sites

NYTimes.com: "FOR some time, Procter & Gamble, the world’s largest advertiser, has been dipping its big toes into the vast pool of Facebook, now the world’s largest social network. I recently knocked on the doors of both companies to hear how the experiment was going. Neither was inclined to say much.

Independent experts on Web advertising have been watching, however, and what they see is a myriad of difficulties in making brand advertising work on social networking sites. Members of social networks want to spend time with friends, not brands."

Understanding HP Lab’s Twitter Research

Jeremiah Owyang: Key findings from Twitter research conducted by HP's Labs group:

Most users have a smaller inner circle they communicate with: Within a social network, it was found that most only frequently communicate with a small segment of users –even if one has a large community. Makes sense, everyone has an ‘inner circle’. Finding the true network that an individual has (even if they have thousands of “friends”) is what’s really important. Although Scoble solicits imput from thousands of contacts, he leans on a smaller subset of folks to trust above all others.

HP Labs Sample Size is @ 6% of the Twittersphere: HP Labs took a random sample set of Twitter users, for a base of number of 309,740 users. According to my social network stats tracking page, Twitter’s total universe is somewhere between 4-5 million (still very small). I’ll value the network on the 5 mil side, so that’s sample size of about 6%, which is pretty healthy.

On average, most had 85 followers: They found that the average user has 85 followers in their network, this number seems reasonable when averaged out across the network.

On average, most had 80 friends: Most users followed back 80 others, which is close to the actual follower number. Perhaps some weren’t following spam bots, or people that follow everyone. James Governor has been discussing asymmetrical networks, but it appears that on the average, most are symmetrical.

About One Tweet a Day is Average Frequency: On average, these users had posted 255 tweets, and since the average users has been around for nearly 7 months, thats about 36 tweets per month, or about one a day.

68%: are active users Social networking stats are almost always flawed, as the vendors don’t disclose how many are truly active. I define active user base as logged in and completed an activity in the last 30 days. Among the 309,740 users only 211,024 posted. It’s unknown if this filtered out spam tweets, although nearly 2/3rds of users have returned (site stickyness. That’s a pretty good return to site rate.

Most members have been on twitter nearly 7 months: The research showed that the average person (from first to last post) was active for 206 days. This means that June 2008 (report written in Dec) has become somewhat of a trigger point, perhaps where a growth curve started to point upwards. I noticed an influx of users on April 2008, two months before HPs findings, see comment #579

A quarter of tweets (@) are directed at other users: The report showed that Around 25.4% of all posts are directed, by using the “@user” which is responding to others. This could suggest that the other 75% of tweets are updating their network of what users think is interesting or discussing ‘what they are doing’

The more followers, the more they tweet –up until a point: Figure 1 indicates frequently in posting the more followers they have, right up until about 500 followers where the frequency starts to level out (if the graph were smoothed). The data around number of friends suggests a similar graph, although there’s no saturation point (see figure 2). I’ll suggest the more connections a user has, the more value they have, and therefore are more active.

Despite having large networks, a smaller circle is maintained: For users with a high number of followers, they actually only still communicate with a smaller subset of users. This rule remains constant see figure 4.

Where’s the value? within the hidden network: To find out the real value of a twitter user and their network, finding out their true network of folks they communicate with on a regular basis will show their trusted network. Finding out who the Scobles’ communicate with the most will determine will help find out how he is influenced.

Google: Could They Have Two Down Rev Years Ahead?

Barron’s: "“Our research indicates that the challenging macro-economic conditions continue to worsen Google’s advertising driven consumer Internet business,” he writes. Chowdhry asserts that “contacts” say the number of keywords sold is down 2%-5%, and that bids on many keywords are down 20%. While Google is benefiting from the shift of ads from offline to online, he says that “the shift is not sufficient to overcome the downward macro-economic pressures.”"

Retooled Wall Street Journal site packing them in

Newspapers & Technology: "Not only does the site, which debuted Sept. 16, deliver more content, it's offering its distinctive mix of news and information to both subscribers and non-subscribers alike. That's a radical departure from the old WSJ.com, which restricted the majority of its content behind a paid wall."

Twitter turns serious with messages of life and death

FT.com: "Twitter , a text-based micro-blogging service better known for people alerting each other about what they are having for lunch in 140 characters or fewer, has become the central channel for eyewitness accounts and news updates on the events in India.

The service has been flooded with thousands of posts or 'tweets', some from people trapped in the hotels where the attacks were taking place. There are also calls for blood donors to go to specific hospitals, unconfirmed death counts and search pleas for the missing."

Social Networking Traffic Up as Advertising Falls Flat

Mediaweek: "More than half the country actively uses social networking sites, but so far advertising on these properties is nothing short of anemic, says a new report issued by market research firm IDC."

Mediapost interview with John Battelle

MediaPost: "It's not that ad networks are a problem, it's that they are only a small part of the solution. DR-driven ad networks play an important part in the digital media ecosystem. But they have discouraged advertisers from focusing on the real issue facing the online world--that of brand engagement in digital media."

FCC Approves Google-Backed Plan to Free TV Airwaves

Bloomberg.com: "U.S. regulators agreed to free up unused television airwaves for wireless Internet access, handing a victory to Google Inc. and rejecting claims by broadcasters that the plan would disrupt TV signals."

Web Surfers May Be the New Couch Potatoes, Nielsen Study Finds

Bloomberg.com: "Turns out couch potatoes and Web surfers have a lot in common, besides being glued to their seats"

Study: When it comes to influence, bloggers beat friend lists

CNET News: "Facebook likes to trumpet the value of 'trusted referrals'--recommendations and ads with the endorsements of members of your friends list. But a new study from Jupiter Research, commissioned by analytics company BuzzLogic, says that consumer purchases are more likely to be influenced by what they read on a blog versus what their social-networking rosters recommend."

Shakeout Threatens to Thin Out Web-Ad Brokers

WSJ.com: "More than 300 online-ad networks have cropped up over the past couple of years, making the business of brokering ads on the Web one of the most popular -- and crowded -- niches on the Internet.

But with the nation's economic woes deepening, there are signs of a shakeout as growth in online spending starts to slow and venture-capital funding begins to dry up."

YouTube tosses 10-minute limit to show full TV episodes

USATODAY.com: "Forrester Research analyst James McQuivey says advertisers have been reluctant to spend big dollars on YouTube. Instead they prefer the more targeted ad approach on sites such as Hulu and ABC.com, where people come to watch specific shows.

'If you're an advertiser, where will you put your money?' he says. 'In front of content you're not sure about, or behind a series like 30 Rock, a known brand?'"

Study: Huge Potential SEM Spend Untapped

Search Engine Land: "A new JupiterResearch, Marin Software-sponsored study has found some surprising things about large-search marketers and their SEM spending: more than 90 percent would spend as much as 22 percent more — if they had better tools and technology to manage complex campaigns. That potentially represents hundreds of millions — even billions — of dollars that are untapped by the industry because technology isn’t keeping pace with the needs and demands of the industry’s larger marketers."

Interview with Twitter CEO Jack Dorsey

I Want Media: The CEO of the hit microblogging service aims to take Twitter mainstream -- and find a business model. But Twitter won't ever replace blogs or newspapers, he says. "We will always need a medium that carries more words. ... Twitter is very good at immediacy."

Making Social Networks Profitable

BusinessWeek: "Google is applying the same approach to social networks it has used to dominate the online search business. If this works, it may finally make ads on social networks relevant—and profitable."

NBC and News Corp.'s Hulu Is Off to a Strong Start

BusinessWeek: "Hulu users on average spent 256 minutes in August watching videos, up from 169 minutes in July. That was the longest time spent among all Web brands, according to Nielsen."

Technorati CEO on the state of the blogosphere

iMediaConnection.com: "What I found most interesting was the level of sophistication and professionalism. The average blogger has been at this for three years, and more than half have more than one blog. Bloggers are making serious investments both in terms of time and money, even more so with bloggers who have advertising on their sites. They're also incredibly advanced in their use of Web 2.0 tools and traffic generation, and this last fact has big implications for marketers who advertise with bloggers, as these authors are all about information and influence. They're everywhere in the social media space, always linking back to their blogs as part of their identity."

TNS Media Intelligence Reports U.S. Advertising Expenditures Declined 1.6 Percent in First Half 2008

TNS: "Ad spending during the second quarter of 2008 was off 3.7 percent versus last year, the steepest quarterly drop since 2001."

Google CEO won't delay Yahoo deal any further

Yahoo! News: "After voluntarily delaying the start of the Yahoo deal three months ago to give antitrust regulators time to review the potential impact, CEO Eric Schmidt said he isn't willing to wait very much beyond an Oct. 11 deadline spelled out in the companies' contract.

'Time is money in our business,' Schmidt told reporters."

Rallying Cry for Display Ads

WSJ.com: "But some ad-technology and Web-measurement companies are trying to engineer a comeback for display ads, offering data that they say show display advertising is more effective than marketers think. Microsoft is the latest company to make this declaration, with new evidence coming next week that it says proves display ads are actually better than searches at triggering consumers."