RESEARCH: Social Networking Beats Out E-Mail: Nielsen

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RESEARCH: Social Networking Beats Out E-Mail: Nielsen

The continued growth of Progressive Grocer‘s LinkedIn group is a testimony to how social media has permeated the business-to-business world. With just under 800 members — and almost 10 new members per day — retailers are finding the platform to be an indispensable way of connecting with peers.

In fact, active reach in what The Nielsen Company defines as “member communities” now exceeds e-mail participation by 67 percent to 65 percent. What’s more, the reach of social networking and blogging venues is growing at twice the rate of other large drivers of Internet use such as portals, e-mail and searches.

Nielsen concludes that the shift to social activity online will have profound effects on marketers and publishers. For publishers, social networks are eating into time spent with other online activities, according to Nielsen. For advertisers, the phenomenon at this stage represents mostly unfulfilled promise for a deeper connection with consumers who are more difficult to reach in social environments.

The rise of social media coincides with the decline of portals. Social networking appears to be snatching away users’ online time formerly spent with e-mail, traditionally a large draw to portals. Such fragmentation is decreasing portals’ importance to advertisers. In a separate report, top digital shop Razorfish said its spending at portals declined from 24 percent in 2006 to 16 percent in 2008.

Nielsen found that two-thirds of the world’s Internet users visited a social networking site in 2008. All told, social media now accounts for almost 10 percent of Internet time. Facebook is leading the pack worldwide, with monthly visits by three out of 10 Internet users in nine global markets, per Nielsen.

The growth in social media isn’t confined to the United States, though: Nielsen charted comparable or higher growth for Australia, Spain, Italy and the United Kingdom.

Yet, for now, user growth at social sites is outpacing advertising increases, according to Nielsen, adding that this will likely change as models shift to value engagement over exposure.

“As the online industry matures and the value of online real estate is increasingly measured by time spent, rather than pages viewed, a significant shift in advertising revenue from ‘traditional’ online media toward social media could be realized — if the successful ad model can be found,” the report said.

The search for a workable ad model is even more urgent now that social media has broken out of the youth demographic, Nielsen found. For example, Facebook’s greatest growth has come from 35- to 49-year-olds, and it has added twice as many 50- to 64-year-olds as those under 18.

Yet, advertising and social media to date have mixed like oil and water. Part of that is a function of social media’s communications role — advertising has typically performed poorly in chat and e-mail. The larger challenge for advertising is to move from an interruptive role to joining conversations.

That means advertisers need to find ways to add value to users’ experiences, Nielsen found.

“Whatever the successful ad model turns out to be, the messaging will have to be authentic and humble, and built on the principle of two-way conversation — not a push model — that adds value to the consumer,” the report said.

Not only are more people migrating toward social media, but because of the interactive nature of the platform and users’ ability to generate their own content, users of this media are also spending more time on it than on traditional Web sites.

According to a new report from Netpop Research, “Media Shifts to Social,” the percent of time people spend communicating online has increased 18 percent since 2006, while time spent on entertainment has declined 29 percent. On top of this, online entertainment is shifting to a small, powerful proportion of social media contributors fueling Web activity through blogs, micro-blogs, social media, and video and photo sharing.

Key findings from the study include data such as:

105 million Americans contribute to social media
Social networking has grown 93 percent since 2006
7 million Americans are “heavy” social media contributors (six-plus activities) who connect with 248 people on a “one to many” basis in a typical week
54 percent of micro-bloggers post or “tweet” daily
72 percent of micro-bloggers under age 18 post or “tweet” daily

The report concludes that market trends and customer opinion are being shaped by end users more rapidly and with greater impact on business than ever before as an entirely new form of leisure develops around talking and sharing, providing opinions and perspectives ... and suggests that Web sites need to connect directly with users, or the users will create their own venues that are harder for companies to track and participate with effectively.

The study includes the differences in use and frequency among younger users, teens and college students, and light, medium and heavy social media users to understand usage habits and motivations. It also describes photo sharing, video sharing, micro-blogging, social networking, tagging and wikis among 20 online communication and social media channels.