It has been a topic of discussion if social networking is approaching saturation in the United States or not.  There are many opinions on this subject but one thing that does seem to be quite unanimous is the growth prospects in the “rest of the world”.

Last month Comscore came out with some stats to back this up and indeed social networking site use in the rest of the world is growing, and growing fast.  Here is an excerpt from the report on regional growth.

Facebook and Hi5 are leading the growth worldwide according to the report.  Friendster follows up in third place for international growth rates.

It is also worthy to note that as facebook’s localization its user interface continues, it is posting some amazing growth numbers in other markets (other than North America).  In Latin America for example, facebook has grown over 1000% in the last year to June 2008.

The full Comscore report can be found here. 

Here at Ad Chap we are bullish on both online advertising and global social networking growth. As advertising online gets more sophisticated, advertisers are able to better target their audience, get better stats and see more measurable results. This is bringing a larger share of advertising budgets online.

US Internet Advertising Revenues Top $21 Billion In ‘07, Reaching Record High. In this May 15, 2008 report by the IAB (Interactive Advertising Bureau) and PWC (Price Waterhouse Coopers) they found:

• For the full year 2007, revenues totaled $21.2 billion, exceeding 2006 performance by 26 %, itself the former record year.
• Q4 2007 Internet advertising revenues hit $5.9 billion, representing historic revenues for a single quarter and a 24% increase over the same period in 2006.
• This is the fourth consecutive year and 13th consecutive quarter of record results.

“Despite the current state of economic uncertainty, 2007 was another record year and the 13th consecutive record quarter. Interactive advertising is not just the future, it is the here and now, as it represents a meaningful and growing component of U.S. advertising and marketing spend,” said David Silverman, partner, Assurance, PricewaterhouseCoopers.

Another point of interest from this report is that Internet advertising revenues surpassed Radio advertising & Cable Television advertising in total U.S. ad spending in 2007.

Since this report is USA only, it does not give the whole picture however. Another report from Aegis PLC and Carat shows GLOBAL online Internet advertising spend to grow 23.3% in 2008 with Russia, Eastern EU countries and the Asia Pacific region and Latin America charting the fastest growth worldwide.

North American growth is less stellar with USA projected to grow 3.9% and Canada to fare a little better at 7.2%.
Noting the lower growth numbers for North America, we have also been seeing reports in the news that social networking sites myspace and facebook are seeing user growth plateau. This has led many of the social networking bears to write “I told you so” articles about the sustainability of social networks. Not so fast!

We do believe that social networking use will be approaching the saturation point in the USA and some other developed markets in the next few years. For the rest of the world however, there is massive growth in social networking use happening.

We are looking forward to see what the future brings and believe that social networking and new possibilities for ultra targeted advertising are just getting started.

With the combined growth of online advertising spend and global social networking growth, we expect exciting times coming up for Ad Chap and social networking advertising.

Links
The full IAB - PWC USA Advertising Report is available here. http://www.iab.net/media/file/IAB_PwC_2007_full_year.pdf

The Aegis - Carat Global Advertising Report is available here. http://www.aegisplc.com/ags/media/groupreleases/grouprel2008/2008-03-17/

In our last post we touched on the rise of social networking use among teens and adults. Another study has been released this week from Pew Internet about teens and social media. It is a good follow up and reveals more detailed information about this demographic and their use of social networking sites.

The study has found that 93% of teens (aged 12-17) use the Internet. That is an amazing number but it can be a bit misleading as the study was for American teens only, so keep that in mind as we proceed.

They go on to say that 64% of online teens (and 57% of ALL TEENS) participated in content creating activities on the Internet. What does this mean exactly? The study has detailed breakdowns that you can review but for our purposes, they are engaging in social activities and networking on the internet on a regular basis. It also found that 55% of online teens have created a profile on a social networking site like facebook or myspace. This contrasts the emarketing survey which says 70% of all teens use social networking sites. Whether it is 55% or 70% we can not tell but, we can be sure that social networking is a trend that is not to be ignored by advertisers.

In the last post we also touched on the use of email by teens, or lack thereof. The Pew Internet report finds the following:

“Email continues to lose its luster among teens as texting, instant messaging, and social networking sites facilitate more frequent contact with friends. Despite the power that email holds among adults as a major mode of personal and professional communication, it is not a particularly important part of the communication arsenal of today’s teens. Only 14% of all teens report sending emails to their friends every day, making it the least popular form of daily social communication on the list we queried. Even among multi-channel teens, who are more likely to take advantage of any communication channel they have access to, just 22% say they send email to their friends daily. “

Teen instant messaging use is also dropping.

“the percentage of online teens who report having ever used instant messaging dropped a statistically significant amount from 75% in 2004 to 68% in 2006. This does not necessarily mean that instant messaging is declining in popularity among teens. Rather, it could be that instant messaging functionality has been integrated into so many social networking and gaming applications that teens no longer recognize instant messaging as a separate technology. “

If they are not sending emails and using instant messaging less, how are they communicating? Social networking sites of course. Sites like facebook, myspace, hi5, bebo, friendster, orkut and many smaller niche sites are their main modes of communication. Their friends are also all linked in and it is easy and convenient to access their social network to chat, send messages, post images, flirt, hang out and share info.

Not only are a higher percentage of teens using both the Internet in general and social networking sites, the frequency of their use is increasing.

“The percentage of online teens who report using the internet daily has increased from 42% in 2000 and 51% in 2004 to 61% in 2006. Among teens who go online daily, 34% use the internet multiple times a day and 27% use the internet once a day. ”

While no study is perfectly accurate, we think this gives some additional insight to teen social networking and Internet use. Social networking sites are very often an integrated part of the next generation’s lives already. If the teen demographic is your advertising target, a part of your strategy to introduce your products to them should be dedicated to advertising on social networking sites.

We hope this has been informative for you to learn about teen social networking use but do not make the mistake in thinking that it is not the only demographic using the sites. “20 somethings” to “50 somethings” use of social networking sites is quickly on the increase as well. That is another post altogether though.

The full Pew Internet report on teen social networking and media use is available here.

With the rise in popularity of social networks like facebook, bebo, hi5, myspace, linkedIn etc., advertisers are starting to realize the importance of the space.  eMarketer.com has just released a report that has some fresh new data on the social networking phenomenon.  It aggregates data from international marketers and communication researchers and provides some very interesting points about both usage and marketing spends on social networks.  Here is an overview:

- Right now 37% of adult Internet users and 70% of online teens use social networking sites monthly
- By 2011 50% of adults and 84% of teens will be using social networking sites

Social networking is not going away.  These aren’t just normal websites that people decide to go or not to go, their lives are starting to be intertwined with them.  Once someone spends the time to link in their whole network of friends and family via sites such as facebook, there is stickiness.  They are going to come back again and again, many times daily or at least weekly.  When you add in the sites features, such as posting videos, pictures and communication, these sites are becoming one stop shops for people’s online life.  For the youth, social networking sites are becoming email and instant messaging replacements, communication systems in their own right.  Email is decidedly unpopular with the younger generation for several reasons but mostly because they use facebook and myspace (or other networking sites) to communicate instead.

If 70% of online teens are using social networking sites now, there is nothing to say that they will stop using them when they enter the working world and become adults in a few years.

What about the older people (everyone that is not a teenager)?

Although the adult crowd is still using email and IM as their primary means of online communication, they are getting increasingly involved in social networking as well.  They are discovering the value of linking in their network for both personal and business reasons.  We typically hear how they love to be able to get in contact with long lost friends and business contacts.   Adults typically use social networking sites less often but we project this will also increase as well.

In summary, social networking is here to stay and already has become an online activity that is generating mass amounts of traffic.  Advertisers are starting to take notice and are looking to get in front of this sector of online traffic.

Ad Chap can help get your message out to millions of people on social networks, it is our specialty and our mission to get you the best value for your social networking advertising dollars.