Wednesday, November 26, 2008

IDC Report: Social Networking Traffic Up as Advertising Falls Flat

More than half the country actively uses social networking sites, but so far advertising on these properties is nothing short of anemic, says a new report issued by market research firm IDC.

According to IDC’s report (U.S. Consumer Online Attitudes Survey Results Part III), more than three quarters of social networking site users log on at least once a week, and 57 percent do so daily. And these folks are logging an increasingly large amount of time on these properties, as more than 61 percent of users spend more than a half hour on these sites per session, with 38 percent staying at least an hour.

Yet despite those huge usage numbers, social networking sites like MySpace and Facebook significantly under perform when compared to overall online advertising, found IDC. Just 57 percent of social net users report clicking on an ad over the past year versus 79 percent of all users, according to IDC’s study. A similar disparity is evident when it comes to online shopping.

Up until recently, the promise sites like MySpace and Facebook have offered is that as long as users provide information on their age, location, personal interests and the like—advertisers will be able to offer highly targeted ads. But IDC’s study found that only 3 percent of users surveyed are OK with publishers using their contact information for advertising.

So what do social networking sites do to improve ad effectiveness? Become more like portals, says IDC, and give users something to do other on these sites other than communicate. That’s something MySpace has gradually done over the past few years as its added more professionally produced content and video.