Magazine article CRM Magazine

Mercurial Marketing: Social Networking Sites Have Bloomed in the Past Year or So, but Just How Valuable Are They to Marketers and How Can That Value Be Leveraged?

Magazine article CRM Magazine

Mercurial Marketing: Social Networking Sites Have Bloomed in the Past Year or So, but Just How Valuable Are They to Marketers and How Can That Value Be Leveraged?

Article excerpt

Mothers, fathers, spouses, offspring, siblings, friends, neighbors, bosses, coworkers--for most of us these are the people with whom we develop relationships that influence, to one extent or another, how we function in society. These networks of social and familial contacts give us, among other things, many constructs for managing various aspects of life. In fact, part of how people define themselves is through these personal and professional connections. With more people living more of their lives online, new kinds of relationships--chat buddies, Friendster users, bloggers, MySpace favorites--have appeared, stretching the definition of both social and network. Social networking sites have exploded in number over the past two years, snaking their way through the Web like kudzu. It should come as no surprise that marketers have noticed and are busily cultivating methods to take advantage of this new type of opportunity.

In July 2005 News Corp. CEO Rupert Murdoch purchased MySpace's parent company, Intermix Media, for a staggering $580 million (Murdoch walked away knowing he had gotten the better end of the deal). That's about when it dawned on many e-world inhabitants that online interaction would never be the same. Today, almost half (45 percent) of Web users are active on social networking sites according to the Nielsen/Net ratings. Although MySpace, and more explicitly Facebook, has a younger user base, both are becoming more popular among an older crowd: The sites boast 36- to 54-year-old user segments of 36 and 30 percent, respectively.

At the same time, networking sites like LinkedIn cater exclusively to business professionals (see the sidebar, "Strictly B2B").With so many people now attuned to the behavior, companies have been scrambling to stake a claim in this emerging space. Tens of millions of people--54 million on MySpace alone--now trumpet their identity, forge relationships, and engage in dialogue in the context of an online community. Where can businesses latch on to this trend? And in such personal forums, is it appropriate or useful for marketers to attempt to take advantage of social networking?

Nikos Drakos, a research director at Gartner, believes that leveraging social networks to connect with customers is not only appropriate but also crucial for companies to consider. However, he says, "When I and others say 'understand social networks,' it doesn't necessarily mean, 'go talk to MySpace.'" How one defines leveraging social networking depends on what the goal is. Viral marketing and brand promotion, for example, may be best done through established sites, as they capture the most traffic. However, this method poses some problems.


Tapping into large, established sites like MySpace certainly provides one option, and many companies have gone that route. With so many people visiting these larger Web sites, a company has the opportunity to win much mind share, as well as to interact with its customers individually, thereby humanizing the brand and bolstering customer devotion. Burger King crafted one of the most successful viral campaigns of the past year with the creation of a MySpace profile for its mascot, the King. The profile (really a site within a site) offers those who wish to become Burger King's "friend" the opportunity to play games and download free episodes of TV shows like 24 and Pinks, as well as fancy Burger King logo backgrounds for their personal pages and funny Burger King-sponsored videos (i.e., free advertising). The page to date has attracted more than 134,500 "friends" (or fellow MySpace users) and was credited in part in helping Burger King to boost sales 6 percent to reach two billion in FY ending June 30, 2006.

Other companies--Gatorade, Jack in the Box, and The Learning Channel--have found similar success going this route, but there are dangers and drawbacks to building into a preexisting social networking site--the model may not work well for every company. …

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