07 Aug 09 Do I need a socialising budget?

Quite often we hear that people on social networks don’t pay any attention to ads, and the the social networks themselves haven’t worked out how to make advertising within them work. Possibly it is because they were never meant to work, after all, we are social creatures.

Chris Anderson recently published his book “Free! Why $0.00 is the future of business” , around which there was a fair bit of debate. (Malcom Gladwell vs Seth Godin). Whether you agree with Chris or not, the clear trend is that advertising costs are rapidly dropping, the amount of information people are consuming is dramatically increasing as is their ability to filter and control it.

So, is advertising losing its effectiveness?

Traditional advertising certainly is – and by traditional, I mean interruption marketing. If the information isn’t supposed to be there, then trust me, most people aren’t going to care about it (maybe 0.19% will). That isn’t a lot, so it is a good thing those CPM’s are getting cheaper.

There are other advertising vehicles like sponsorship, which still seems to be effective – congratulations Red Bull – due to the fact that they are spending their dollars to enable some other grand cultural pursuit. As a result the brand, with the culture, spreads.

Google is still not in the business of interruption marketing. Sure, we’d all rather be in the organic listings than the sponsored section, so it isn’t surprising that the SEO industry continues to grow, but there still seems to be a lot of room for good marketing in the sponsored search results.

Given that we know that word of mouth is the most powerful form of marketing, and social networks provide a way to supercharge this, it seems to me that it is now cost effective to be spending large amounts of time and money investing in the communities that follow a brand. Many brands (although not enough) have switched on to the fact that they need to engage, listen and have two way conversations with their customers, but I’m not sure many have made the switch to say “Maybe we should invest in the community, and spend the money internally to free up more resources to engage”.

We are in the middle of the financial crisis, so where is that money going to come from? Well, the advertising budget would seem to make sense. It is important to remember that this isn’t money for advertising in social networks, this is money purely for socialising – just like that money you used to have for a “corporate lunch”. It could be for creating new forums, providing more time from internal staff, investing in socialisation tools and platforms, or incentivising the community to create. Whatever it is used for, surely the return for each dollar would have to be better than most advertising models currently offered by traditional “ad supported” websites/ industries.

Above: Possibly the worst pop-up I have ever seen.