Social Advertising Research

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This presentation explores the attitudes of U.S. online consumers toward advertising in general and how their attitudes differ based on the medium, in particular on social networking services. Social networking services offer marketers a unique channel to interact with consumers and engage them with their brand. However, most advertisers are missing this opportunity because they are employing the wrong approach. This presentation presents IDC primary research on U.S. consumer behaviors on social networking services, their attitudes toward advertising on these sites, and the implications for how marketers and advertisers can utilize social media to connect with customers.

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Social Advertising Research

  1. 1. Consumer Attitudes About Advertising and the Implications for Advertising on Social Networks Caroline Dangson Research Analyst Social Media IDC Copyright 2008 IDC. Reproduction is forbidden unless authorized. All rights reserved.
  2. 2. Is Advertising Failing on the Internet? No, advertising will remain important business model, but it must evolve Consumers expect content to be free online IDC survey shows that consumers hate paying for content more than they do Source: TechCrunch, March 22, 2009 advertising Clemons argues that consumers do not trust This calls for innovation – advertising, consumers do not want to view advertisers AND publishers must rethink online ad advertising, and consumers do not need strategy advertising. Publishers must employ a IDC argues that people remember experiences mix of models that are personally relevant to them - that’s what advertisers should be aiming to provide. © 2008 IDC Jul-09 2
  3. 3. IDC Primary Research Data Measuring Consumer Attitudes About Advertising © 2008 IDC Jul-09 3
  4. 4. Consumers Actually Like Ads Q. How much do you like advertising in general, no matter where you see it? 24.9% Like Advertising 42.3% Neutral Dislike Advertising 32.8% Source: IDC, U.S. Consumer Online Attitudes Survey Results, Part I: Advertising Tolerance, Doc #213481, n=3,001 © 2008 IDC Jul-09 4
  5. 5. Not All Mediums The Same Q. How much do you like advertising in each of the following media? 60 Consumers like ads Magazines on more passive, 50 sit back mediums Newspapers Satellite TV 40 Cable TV 30 Broadcast TV Internet 20 Radio 10 Direct mail ("junk mail") 0 Source: IDC, U.S. Consumer Online Attitudes Survey Results, Part I: Advertising Tolerance, Doc #213481, n=3,001 © 2008 IDC Jul-09 5
  6. 6. Not All Formats The Same Q. How much do you like each of the following kinds of online advertising? Pop-up ads Are Annoying Interstitials Are Useful Video ads Like Them Sponsorship and Rollover ads search are useful Email ads Pop-up ads, Online game ads interstitials and video ads are annoying Search ads and text ads Advertisers should Display ads avoid disrupting the Sponsorship logos experience 0 10 20 30 40 50 60 70 80 90 Source: IDC, U.S. Consumer Online Attitudes Survey Results, Part I: Advertising Tolerance, Doc #213481, n=3,001 © 2008 IDC Jul-09 6
  7. 7. Consumers Are More Easily Annoyed By Online Ads Find ads online more annoying than useful More annoyed by ads on social networks than elsewhere on the Internet Annoyed by ads that disrupt the experience – the online environment is active, not passive Read magazines vs. use Internet vs. connect/share on social networks © 2008 IDC Jul-09 7
  8. 8. Consumers Less Receptive to Online Ads – Advertisers Shifting More $ Here Budgets increasing for social media (they were $0) Brand advertisers want to be in all the action on social networks – but pages offer little premium inventory Social media is much cheaper than traditional advertising, but measuring quantifiable success is not as easy and consumers not reacting as favorably – 25% NEDMA direct marketers who run social media campaigns have a strategy for calculating ROI – Possibilities are almost paralyzing – where to begin, what data to collect, how to analyze the data © 2008 IDC Jul-09 8
  9. 9. All Eyes on Social Networking Services (SNS) Percentage of Online Americans Regularly SNS users spend an Using SNS Today average of 30 more 100% minutes online each day than non SNS 80% users 60% More than half of SNS users age 13 to 24 use 40% SNS at least once a day or more 20% 38% are spending 0% more than one hour 13-17 18-24 25-34 35-44 45-54 55-64 65 each session Source: IDC U.S. Consumer Online Behavior Survey Results 2008, n=3092, U.S. Consumer Online Attitudes Survey, IDC 2008. n=3001 © 2008 IDC Jul-09 9
  10. 10. Boomers Joining: SNS Is Not Just A Teen Hang Out; Motivations for Using Differ Growth of Online Americans Regularly Using SNS in 2008 SNS usage in 100% the U.S. grew June 6% from June 80% December 2008 to Dec. 2008 60% New growth in 40% U.S. is from consumers 20% aged 35 and older 0% 13-17 18-24 25-34 35-44 45-54 55-64 65+ Source: IDC U.S. Consumer Online Attitudes Survey 2008 (n=3001), U.S. Consumer Online Behavior Survey Results 2008 (n=3092) © 2008 IDC Jul-09 10
  11. 11. Traffic is Huge, But Advertising Spend is Not 60% U.S. online consumers age 13 and older use SNS Advertising is not paying the bills U.S. advertisers will spend $1.3 B in 2009 to $3.1 B in 2013 Concerns about brand safety Poor quality inventory IDC survey shows that ads on SNS are not as effective as advertising online at large Sources: IDC U.S. Consumer Online Behavior Survey Results 2008, n=3092, Worldwide and U.S. Internet Advertising 2009–2013 Forecast and Analysis (forthcoming) © 2008 IDC Jul-09 11
  12. 12. Perception of Advertising on SNS Dislike SNS users more tolerant of advertising in general 73% prefer free online content with advertising Neutral over paying for content without advertising 18% Like Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3001 © 2008 IDC Jul-09 12
  13. 13. Little Ad Relevancy on SNS Q: How useful (relevant to you, informative) do you think advertising is on SNS? Only 1 out of 4 consumers (n=1619) 27% find ads on SNS useful 51% find SNS ads 40% annoying – still this is less than mobile (66%) and video ads (67%) Creating ads for SNS that are relevant, less annoying 33% to users is your biggest challenge Useful Neither useful nor not useful Not useful Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3001 © 2008 IDC Jul-09 13
  14. 14. SNS Users Click on Ads – Just Not As Frequently On SNS Q: How often do you think you click on an advertisement online? on SNS? (n=1619 SNS Users) Ads on SNS 57% 17% All online 79% ads 20% 0% 20% 40% 60% 80% 100% Source: U.S. Consumer Online Attitudes Survey, IDC 2008. N=3001. Percentage of users who clicked on an ad at least once in the past year. © 2008 IDC Jul-09 14
  15. 15. SNS Users Are More Active Click to Purchase Than Non-Users Q: In the past 12 months, have you ever More SNS users than purchased a product or service as a result nonusers report 100% of clicking on an online ad? clicking 80% 74% to purchase 80% 60% SNS users are more active online 40% 26% purchasers 20% 20% But getting them to 0% click on SNS ad is YES (click to purchase) NO (click to purchase) more difficult Users Nonusers Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3001 © 2008 IDC Jul-09 15
  16. 16. But SNS Users Are Not As Active Click to Purchase on SNS Q: In the past 12 months, have you ever purchased a product or service as a result of clicking on an online ad? General Web vs. SNS site SNS 11% Web In 23% General 0% 5% 10% 15% 20% 25% (95% confidence interval, 3% margin of error) Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3001 © 2008 IDC Jul-09 16
  17. 17. Consumers Are on SNS To Connect To keep in touch with friends To communicate with friends To share media with friends Virtual social event © 2008 IDC Jul-09 17
  18. 18. Behavioral Targeting Promises Increased Relevancy, But Consumers Against It Q: Would you consider allowing Web sites to collect personal info about you in return for ads that fit your purchase intents? 3% 38% 59% Yes - without reservation I would consider it under certain circumstances No - not under any circumstances Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3001 © 2008 IDC Jul-09 18
  19. 19. SNS is a Goldmine of Rich Personal Data, But Consumers Want Privacy Q: Under which circumstances would you consider letting Web sites collect personal information about you? Check all that apply. (N=1239, those who would allow it without reservation and those under certain circumstances) I choose how much info. to give away 67% Service collects info. only if I opt-in 66% Service allows me opt out 61% Notified in Terms of Service 41% Service sends me email notification 34% Informs me with a pop-up window 23% 0% 20% 40% 60% 80% 100% Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3001 © 2008 IDC Jul-09 19
  20. 20. Are You Invited to the Party? © 2008 IDC Jul-09 20
  21. 21. Some Consumers Open to Sharing Info About Themselves, But Not Others Q: What kind of personal information would you allow Web sites to collect about you provided it could not be connected to you as an individual? (N=1239) Internet surfing 50% who had some or no behavior 55% reservations will share as long as info not connected to Demographic 48% info their personal identity Online Most respondents will not purchasing 46% share info on who they know behavior Enable your customers to Info on who I 8% know speak for you – tap into word of mouth None of the 13% above 0% 20% 40% 60% 80% 100% Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3001 © 2008 IDC Jul-09 21
  22. 22. Facebook Revolts Nearly 2.7 million members of this group alone Ambiguous language about what data Facebook owns Consumers starting to realize the value of their profile data for Facebook’s business © 2008 IDC Jul-09 22
  23. 23. But the Reality… Millions are opting to share when adding multiple applications that require them to share personal information with third parties © 2008 IDC Jul-09 23
  24. 24. Participate By Giving Consumers Something They Want To Share Intel teams with Buddy Media to create InTru 3D application for Facebook Goal: Generate awareness of Intel’s new cinematic 3D technology Create personal avatar Play a game Earn points to upgrade creature Invite friends to participate (share the message) Godiva teams with AdNectar to sponsor a branded virtual gift for Facebook & MySpace members Goal: Drive engagement and purchase intent (it worked) Those exposed to virtual chocolate gift were 20% more likely to purchase a real box of Godiva in the next 6 months compared to the control group with no exposure © 2008 IDC Jul-09 24
  25. 25. Offer Coupons Q: In the past 12 months, when you were using the Internet for personal reasons (i. e., not for work or school), in which of the following ways have you used the Internet? Please check all that apply. 70% 47% online 60% participated in online contests 50% or 40% sweepstakes 30% 31% used online coupons 20% 10% Contests 0% Coupons 13-17 18-24 25-34 35-44 45-54 55-64 65+ Source: IDC U. S. Consumer Online Behavior Survey Results 2008, n=3092 © 2008 IDC Jul-09 25
  26. 26. Case Study: @DellOutlet Started Spring of 2007 500,000+ followers who opt- in for updates (leads) ROI = $1 million in direct sales 12/08 Followers RT @DellOutlet Tweets – Special discounts – coupons with code – Follower feedback 1-2 general tweets/week Lots of conversation Uses applications to target geographies and connect with outlet specials to increase demand © 2008 IDC Jul-09 26
  27. 27. Customers Using Social Media To Talk about Your Brand Frustrated with product or service Seeking to control the message Use social media to speak out Spending money on customer support, Comments get to but still losing bloggers - influence customers social network © 2008 IDC Jul-09 27
  28. 28. Organization Learns to Participate in the Conversation and Shape It Comment Listen Connect Support Share Engage Collaborate Empower © 2008 IDC Jul-09 28
  29. 29. Social Media Gives You Voice, Not Control Social media empowers consumers – they will complain on SNS not matter what The power to control messages about your brand are diminishing Be prepared to be compared to other companies who are not even direct competitors Consumers want to be heard - show them that you are listening Turn a complaint into a message of appreciation © 2008 IDC Jul-09 29
  30. 30. Essential Guidance You do not control the message on social media, but you can steer it. © 2008 IDC Jul-09 30
  31. 31. The Future Is Personalization The Internet allows for better targeting. IDC argues that behavioral targeting is ultimately good for consumers, but they need the option to choose what info is collected and how it is used. Know your customer; deliver relevant messages. Otherwise, your message will be ignored. © 2008 IDC Jul-09 31
  32. 32. Essential Guidance Understand the context and sub-context of interactions on each social media site and speak the local language. © 2008 IDC Jul-09 32
  33. 33. The Future of Business Is Relationships Social media is relational. It takes time, patience and multiple interactions to garner trust. Source: P Kinski/Peter Spaczynski, June 2006, Flickr © 2008 IDC Jul-09 33
  34. 34. Essential Guidance You must be social. You cannot fake it. © 2008 IDC Jul-09 34
  35. 35. Contact us for more information Caroline Dangson cdangson@idc.com http://tinyurl.com/CarolineDangson © 2008 IDC Jul-09 35

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