Social networking

“Social networks are born truly free,” says Goodstuff’s Gayfer. “Not only do users not have to pay for them, they also expect them to be free of advertising. All the big social networks, from Friendster in the beginning to Twitter today, were built on this principle.

“However, as each develops, the need for revenue generation presses and the truly free model is compromised. Each network has faced its own challenges in this area and has adopted slightly varying business models in response.”

While business networks such as LinkedIn are building a highly engaged membership  through a subscription-based model, the most common revenue-generation model ­ adopted by Friendster, MySpace and now Facebook ­ is advertising.

The consensus seems to be that no network has managed to get this right yet. Where MySpace is too invasive and garish, Facebook is too structured and cold, and the advertising on both is very avoidable for users. Yet brands can find ways to use social networks.

The key is to engage users with personality and to accept that the conversation is two-way.  A good example of this was the recent ComparetheMeerkat campaign for ComparetheMarket, which took the television ads’ character, Aleksandr the meerket, to free online social media with great success. Aleksandr now has 4,250 followers on Twitter, 175,000 Facebook friends and his ads have been viewed more than 100,000 times on YouTube.

The race to attract advertisers gathered pace in March, when, noting the sudden adoption of Twitter by brands, Facebook launched a redesign of its user homepage.

Peter Deng, product manager at Facebook, comments: “The new user homepage has been designed to make it even easier for users to create content and receive real-time updates from the people and connections they have on Facebook. It also gives users even more control over who and what they see in their stream by offering new filters.”

It remains to be seen how Facebook, Twitter and the other social networks will raise revenues from this interest from brands.

Mobile

The mobile internet has been the next big thing for quite some time but, as with social networks, it is still to deliver on that promise. Elaine Doherty, principal business consultant at Logica, says: “People currently use their mobile internet service for basic things such as checking the news or searching for directions, and usually only as a necessity.”

She continues: “Consumers don¹t associate their mobile devices with the internet and, when they do, they often find the content and media they are searching for hard to find (if available), slow to load and in formats their phone doesn¹t support.

“Consumers’ perception is often that the mobile internet is expensive to search. There is a major challenge here for media buyers and brands alike, as the significant revenue streams in this space lie in new exciting content.”

And yet, the arrival of the iPhone has provided the first glimmer of hope that the mobile internet might realise its potential. People are starting to use free applications on the iPhone, as well as on the BlackBerry and Google’s G1 phone. Advertisers are also beginning to recognise this and to look at ways to use the emerging medium.

The Pepsi Max “Kicks” campaign is one example of how this is working. By scanning a code on the drinks can with a phone, consumers were taken to a link where they could download games such as PES 2009 and Project Gotham Racing.

The strategy generated mobile phone data for the company and provided a new way for consumers to engage with the brand.

We can expect to see more of these and other free services provided via mobiles, and it is just possible the mobile will fulfil its potential as a medium for brand communications before long.