Elan Lohmann, News24 publisher, comments, “Online media is often regarded by marketers and traditional media executives as not yet on the map but our reach is continuing to grow in the local market. News24's achievement is a significant event for the entire industry. It shows that there are a mass of South Africans who require their news content online. More importantly perhaps, it shows that the local Internet market is coming of age as a viable mass communication medium.

“We believe that connectivity will continue to improve at an increasing rate in South Africa and that news websites will have the most to gain. Global giants like Facebook, Myspace, Google and Youtube may steal away local users to their services but nobody can do local news better than we can on home soil.”

Compelling content

Jannie Momberg, News24 editor, attributes the site's success to a strategy focused on breaking news and compelling content. “It has been our focus to ensure our readers are kept up-to-date with the fast-paced news cycles of the 21st century. News24's content is also available via mobile phone and on DStv channel 299, providing more South Africans with the opportunity to access news when they need it.”

“Furthermore, we have made the News24 experience more relevant to our users. MyNews24.com, where we publish stories written by our readers, has attracted over 80 000 users per month. This is a remarkable achievement when we consider that it was only launched in May this year and a clear indicator that South Africans are embracing the digital revolution of Web 2.0. The comments facilities that we have added has also stimulated fantastic activity and given a real voice to our users,” says Momberg.

Concludes Lohmann, “It is a privilege and a highlight of my career to be associated with such an Industry milestone and all credit goes to the dedicated News24 team.”

 

Following up on a recent Research Brief on the trust placed in word of mouth marketing, a timely release from Nielsen Online provides October's top U.S. social networking sites and blogs, which shows that MySpace.com had 49.5 million unique visitors in October 2007, growing 19 percent over October 2006.

Top 10 Social Networking Sites for October 2007 (U.S., Home and Work)
Site	Oct-06(000)	Oct-07(000)	Percent Change |
Myspace.com	49,516	58,843	19%
Facebook	8,682	19,519	125%
Classmates Online	13,564	13,278	-2%
Windows Live Spaces	7,795	10,261	32%
AOL Hometown	9,298	7,923	-15%
LinkedIn	1,705	4,919	189%
AOL People Connection	5,849	4,084	-30%
Reunion.com	4,723	4,082	-14%
Club Penguin	1,512	3,880	157%
Buzznet.com	1,104	2,397	117%
Source: Nielsen Online, November 2007

 

Top 10 Blogs for October 2007 (U.S., Home and Work)
Site	Oct-06 (000)	Oct-07(000)	Percent Change |
Blogger	21,572	34,104	58%
WordPress.com	2,104	11,440	444%
Six Apart TypePad	8,813	10,601	20%
tmz.com	7,107	7,805	10%
LiveJournal	3,366	4,260	27%
Xanga.com	4,760	2,741	-42%
Thatsfit	534*	2,613	389%
Gizmodo	941*	2,135	127%
Autoblog	920	1,949	112%
StyleDash	1,319	1,947	48%
Source: Nielsen Online, November 2007

 

Facebook alone has some 300,000 unique South African users and generates 10.5 million page impressions from South Africa each month, while MySpace boasts 288,000 unique South African users and gets 35 million page impressions from the country each month.

Local sites such as MyVideo, with 20,000 unique users, and CherryFlava Blog, with 115,000 unique users, are also attracting attention from South African users. MyVideo is on a steep growth path - it has doubled its monthly page impressions to 100,000 from 50,000 in July 2007.

Many marketers are starting to look at social networking as a viable channel for interacting with their customers and prospects, but are not sure where to start. What follows are five tips for getting the best results from using social networking as a marketing channel.

1. Don't get caught up in the hype

Many marketers see the massive hype that social networking has attracted in local and international media, as well as the huge audience numbers, and rush headlong into the fray.

But one should step back and ask the following questions: Is social networking relevant for my brand? What do I hope to achieve by dedicating budget to social networking sites? Can social networking deliver a good return on investment for my business?

You might benefit from experimenting with a small initial investment into social networking to see if it is right for your brand. Social networking will only deliver the results you are hoping for if you set a sound strategy and clear objectives from the outset.

2. Engage with your audience

Social networking is a cornerstone of Web 2.0, a whole new world where the audience expects you to engage with it rather than blasting out an advertising message.

We've found that standard banners don't perform well on sites such as MySpace - in this interactive environment, users simply don't respond to boring banners and skyscrapers. Engaging creative that draws the user into an interaction with the brand works much better - games, competitions, incentives, and applications (such as the numerous widgets and apps on Facebook) often produce good results.

3. Set the right metrics for success

Many advertisers are disappointed by the clickthrough rates they experience from social networking sites. The average clickthrough rate on MySpace is 0.10% and the rate on Facebook is a mere 0.04%. These numbers are well below the average industry of 0.3-0.4% for major portals and other sites.

But in the social networking space, the clickthrough rate is not the most important measure of success. We need to gauge things such as interaction and engagement to get a true feel for how well a campaign on a social networking site has performed.

For example, we could measure how much time people spent playing an online game or how many of them actually downloaded a video clip and forwarded it to their friends.

4. Investigate pricing and audience numbers carefully

The big social networking sites are US-based and many have dollar-based minimum charges for advertising with them. Since South Africa is a small market, many brands might find that the minimum fees might not be viable for the potential returns. One needs to investigate how many South Africa users there are on an international social networking site before committing to the minimum fee you will pay for advertising there.

5. Don't put all your eggs in one basket

Users might be spending an increasing amount of their online time on social networking sites, but that doesn't mean that portals dedicated to news, entertainment, sports and so have lost their audience.

Your customers and prospects won't spend 24 hours a day on Facebook, but will visit a multitude of other sites for personal and business reasons. For certain advertising messages, a travel or news site might be a more appropriate medium than a social networking environment.

Social networking is an exciting new environment, but it complements the other online outlets and channels rather than making them obsolete.

Advertisers should not put their entire budgets into social networks, but should rather test them upfront to see what works for them and what doesn't, as well as the role social networking has to play in their online marketing mix.

Closing words

Social networking is a new channel, which means that there's still a great deal of uncertainty about how one uses it to the greatest effect, and indeed, how one can measure success in the channel.

Local marketers can reach millions of users on networking sites and interact with them in rich new ways. But to achieve success, they will need to set clear goals upfront for their investments in social networking and then experiment with the channel to find out what works best for their brands.

In last month's column Diane Charton highlighted how important it is for online marketers to re-engage with customers and put them right at the centre of our strategies. We need to listen to our customers, understand and participate in their conversations, and take what they are saying to heart.

This change in the landscape means that we also need to rethink the ways in which we measure the success and failure of our online marketing campaigns and initiatives. Up until now, we've favoured success metrics that are easy to capture and quantify, such as page impressions, click-throughs and conversions.

But if our goals are to engage with our customers, drive visitor interaction, build long-term relationships and renew intimacy with customers, then these measurements don't give us all the information that we need to understand how successful we have been.For example, if an advertisement generated a disappointing number of page impressions and click-throughs, could the campaign still be said to be a failure if most of the people who viewed the advertisement downloaded a video from the website, as the advertiser hoped they would, and then forwarded it to their friends?

Conversely, could an advertisement be considered to be successful if thousands of people saw and clicked on it, but didn't follow through by engaging with the advertiser?

New ways to track and measure
Clearly, page views and click-throughs are no longer enough information when your brand enters the Web 2.0 space, which is all about getting customers to participate in a relationship with your brand, establishing a dialogue with them, and connecting them to your company, brand, or product. In short, it's all about getting customers to engage with you.

Engagement is a slippery term to define. Even after several years of debate, the industry hasn't come to an agreement about what engagement is exactly and how it should be measured. But there are a number of elements that we can use as useful metrics when trying to understand whether we are engaging successfully with customers and prospects or not.
Some examples of these include the time that visitors spend interacting with a company's online presence, how many pages customers visit and how deep they dwell into the website, repeat visits to a website, the volume, tone and quality of mentions about the company in the blogosphere, downloading and uploading of content to your site by customers, and the amount of marketing emails forwarded by customers to their friends.

Time spent online is one metric that is taking more importance in the Web 2.0 environment - it was recently given a higher status by Nielsen//NetRatings. Given that web pages now offer more interactivity in the form of applications (maps, games, and so on), videos and more, customers will hopefully be spending more time on each page. Pure page-views become a less helpful metric in this context than they were in the past.

Another tool some have proposed to get a handle on engagement is Search Engine Marketing (SEM) data. If your campaign is driving increased engagement with your customers, they will be linking to your website which should in turn improve your natural search engine rankings.

Concluding thoughts
The medium we operate in is still young, and we're still defining the metrics we use to measure the success of our online marketing programmes.

The traditional metrics such as sales, clicks, conversion rates, and purchase intent still have a vital role to play, although they should be supplemented with newer benchmarks such as those outlined above. We have a bigger selection of metrics to work with than ever before.

But it is important to remember that all the data in the world won't help you if it is not analysed correctly according to metrics that are appropriate for your business. Any successful campaign will begin with a clear, upfront definition of its objectives and how success should be measured.

Advertisers are well on the way to spend $21.4 billion on the internet in 2007, according to eMarketer’s new online ad spending report, “US Advertising Spending,” which also projects that by yearend 2011 spending on online advertising will reach $42 billion.

eMarketer also projects that US online advertising’s share of total media ad spend will more than double, from 6% in 2006 to more than 12% share in 2010 - and more than 13% in 2011.

The amount of online ad spend per internet user is also growing and will, this year, for the first time surpass $100 per user, eMarketer also said; and, by 2011, advertisers are expected to spend nearly double that amount online per user.

One big trend is that the nation’s largest advertisers are shifting more of their budgets from traditional media to the internet, according to eMarketer:

• Among Advertising Age’s “100 Leading National Advertisers,” 69 allocated a smaller share of their total ad budgets toward the four traditional measured media - TV, radio, newspapers and magazines - in 2006 than in 2005.
• 58 of those advertisers both decreased their spending share on the four traditional media and increased the share going to the internet.
• Combined, the 100 top advertisers spent nearly $230 million less on the traditional four media in 2006 compared with 2005, while boosting internet ad spending by $558 million.

Search, display and classified ads account for the largest advertising share of Internet spending, according to eMarketer’s projections for the 2006-2011 period:

• Paid search’s share of online ad spend will continue to hover in the 40% range through 2011.
• Display ads (such as static banners) will generate about 20% of internet ad revenues through the decade.
• Classified ads, including those on newspaper sites and in places such as eBay, Monster or HotJobs, will contribute about 17%.
• Rich media, which includes video advertising, will rise from 8% share this year to over 13% in 2011.
• Social-networking advertising numbers, currently being revised by eMarketer, are expected to increase from $900 million in 2007 to $2.5 billion in 2011.

While the current total media ad spending forecasts reflect economic anxiety, a downturn will also affect online ad spending - but less so, according to David Hallerman, author of the report:

• In contrast to the 26.7% growth projected for internet advertising in 2007, total media ad spending will increase only 2.1%.
• Mainly because of the credit crunch and related economic fallout, internet ad spending will not increase as much in 2007 and 2008 as analysts previously expected. However, reduced spending will be tempered by advertisers buying the low-cost display advertising gobbled up by mortgage companies’ shrinking marketing budgets.
• As a highly accountable ad format, paid search are likely to get more of the mortgage companies’ shrinking budgets than display ads.

The nation's largest advertisers increased their share of spending on the Internet while simultaneously reducing spending in traditional advertising channels. The ad spend report, released this week by eMarketer, forecasts $21.4 billion in online advertising spending in 2007.

The report observes 68 of the top 100 advertisers, as ranked by TNS Media Intelligence, decreased spending on traditional channels including TV and print, and at the same time those advertisers have increased the share of their budgets going to the Internet.

"When you look at the largest advertisers in the U.S., they are still only putting about 3.5 percent of their total ad budgets online. However there are indications they are moving more online," said eMarketer Senior Analyst David Hallerman.

Like ad spend reports from other research firms, eMarketer reduced its previous projection of the U.S. Internet spend from $21.7 billion to $21.4 billion in 2007. The online ad spend is expected to reach $42 billion by 2011, with continued growth through that time.

Categories within the online channel are expected to see little movement. "In terms of search, it will remain at about a 40 percent range for a number of years," said Hallerman. The report finds search will represent 41.1 percent share of online this year, 42 percent in 2008, and is expected to reach 43 percent in 2011.

Display ads, in the form of banners, are forecast to take 21.5 percent of online's share of spending in 2007, 21.5 percent share next year, and 20.7 percent share in 2011. Rich media spending will hit 6.8 percent this year, 6.7 next year, and back to 6.8 percent in 2011. Dollars spent on rich media are estimated at $775 in 2007. Other categories covered include classified ads, referrals, e-mail, and sponsorship.

Unmeasured dollars reach into the billions, according to Hallerman, due to the money spent by marketers to build corporate Web sites, video, and word-of-mouth type campaigns. He said brand marketers can, in some cases, engage an audience on their Web sites better than paid media. He also points to video posted on corporate Web sites and on video-sharing sites on YouTube. The Dove brand is examples of using viral video to spread a message.

The economic climate has driven mortgage companies and others in the financial sector to pull ad dollars from their budgets. Hallerman said the financial services sector has contributed about 15 percent of the Internet ad spend. Other sectors are taking up some of the slack. Hallerman attributes the uptake to the proven measurability of search, and even with display, where they have an idea of where the impressions are going.

eMarketer reports contain aggregate numbers from other research firms.

 

Ads still dominate online marketing spend.

More than three-quarters of US marketing professionals surveyed think that social media marketing—also known as Web 2.0—can give them a competitive edge, according to Coremetrics' "Face of the New Marketer" study.

The same respondents said that only 7.75% of their online marketing spending went to such tactics.

"Marketers are aware of the impact that social media marketing can have on their overall program but view it as uncharted territory, not worthy of their budget," said John Squire, senior vice president of product strategy at Coremetrics, in a statement.

 

This may be true for many marketers. But it misses another reason why Web 2.0 is an also-ran in spending to online ads, search engine optimization and other tactics.

Although respondents were enthusiastic about social media marketing, they did not say that the need for competitive advantage should necessarily determine budget. Not every Web 2.0 tactic is appropriate for targeting every Internet user, so marketers could be prioritizing other media in their budgets.

As for what Web 2.0 tactics marketers were using, user-generated content was by far the most popular, followed by blogs, RSS feeds and social networks.

 

Still, many social media users are avid shoppers, making them an attractive audience for many marketers. Web 2.0 users spent more than $27 billion online in the United States in the second quarter of 2007 alone.