Social Network Users Less Tolerant of Advertising

Chandra Johnson-Greene – www.circman.com

12/01/2008

Although more than half of U.S. customers with Internet access use social networking and penetration will continue to grow, users are less tolerant of SNS advertising than the best tolerated forms of online advertising, according to a study from IDC.

According to the company’s “U.S. Consumer Online Attitudes Survey Results Part III” report, more than three quarters of SNS users visit at least once a week, and no less than 57 percent visit at least once a day. During each session, 61 percent of SNS users spend at least 30 minutes on the respective site or stay logged in permanently, and 38 percent spend at least one full hour per session.

However, only 57 percent of SNS users clicked on at least one ad in the past year, compared to 79 percent of all users. And only 11 percent of those clicks actually led to a purchase, compared to 23 percent for all users.

"The thinking has been that the popularity of SNS will attract a big audience and generate a lot of traffic, which in turn will produce enormous amounts of user-generated content (UGC) and therefore advertising inventory – without any expenses for editorial staff or content distribution deals," Karsten Weide, program director, Digital Marketplace: Media and Advertising, IDC, said in a statement. "All of the above has proven true—except that almost invariably, SNS have had a hard time selling this inventory."

To make matters worse, of all U.S. Internet users, only 3 percent would allow publishers to use contact information for advertising, making it nearly impossible for advertisers to create highly targeted ads.

IDC suggests that publishers “become more like portals” and give users more to do besides communicate, such as posting videos, to become more ad effective.