March 2009Global Faces and Networked PlacesA Nielsen report on Social Networking’s New Global FootprintINSIDE:Social networks/thblogs now 4 most popular online category – ahead of personal e-mailThese sites account for one in every 11 minutes onlineOrkut in Brazil has the largest domestic online reach (70%) of any social network anywhere in the world Facebook has the highest average time per visitor amongst the 75 most popular brands online worldwide
Introductionand advertisers to connect with their How social networks are creating audiences. So how do they need to a potentially transformational Report Highlightschange their strategies accordingly? change in consumer behaviour 1. Putting the growth of social Consumer engagement within social Social Networking has been the global networks – popularity and networks has the potential to change consumer phenomenon of 2008. engagement – into contextthe way consumers are targeted, not Two-thirds of the world’s Internet 2. How the audience to social just through the digital medium, but 1population visit a social network or networks is changingthrough all forms of traditional media. blogging site and the sector now Whilst a few billion dollars of ad revenue 3. The challenges facing accounts for almost 10% of all internet can’t be wrong, the prevailing wisdom is 2advertisers on social networkstime. ‘Member Communities’ has that the current level of advertising overtaken personal Email to become the 4. What advertisers can do to activity on social networks isn’t world’s fourth most popular online find the magic formula for consummate with the size – and highly sector after search, portals and PC advertising in social networksengaged levels – of the audience. The software applications. social networks and advertising industry 5. Factors contributing to the The story is consistent across the world, haven’t quite yet found that magic Facebook phenomenon‘Member Communities’ has taken a formula to make this . Why localisation has won the foothold in every major market from The industry is faced with a real ‘Catch-22’ day in many countries50% of the online population in Switzerland situation. Part of Facebook’s extraordinary and Germany to 80% in Brazil. Facebook 7. Where mobile social networking subscriber growth is due to a clean has become the largest player on the has taken the greatest holddesign with little advertising clutter; global stage, dominant in many countries, consequently, the audience growth 8. What ‘traditional’ publishers yet localised offerings have won the day hasn’t been accompanied by a similar can do in the face of the social in many in advertising revenue. On the network phenomenonHowever, the growth in popularity of other hand, MySpace’s more customisable social networks – and the resultant entertainment and content-oriented broadening audience – is only half the offering – carrying more advertising – story. The staggering increase in the has been more successful at attracting amount of time people are spending on advertising revenue, yet MySpace’s these sites is changing the way people audience is flattening. The industry will spend their time online and has be watching very closely at which one of ramifications for how people behave, these fundamental differences in strategy share and interact within their normal will prove the most successful in daily advertising revenue in , the global media and This report puts the global social advertising industries are faced with new network phenomenon during 2008 into challenges around the opportunities and context, providing insights and lessons risks this new consumer medium for the networks themselves, advertisers creates. Social networks provide and the media industry on how to take competition to traditional publishers for advantage of what’s happening online consumer attention and at the same around “Global Faces and Networked time, facilitate new ways for publishers Places”.1 In this report, the terms ‘Global’ or ‘World’ encompass the following countries in which Nielsen Online has a NetView panel – USA, Brazil, United Kingdom, France, Germany, Italy, Spain, Switzerland and Australia. (Whilst Japan figures are shown in certain graphs, Japanese data isn’t included in any global figures.)2 Nielsen Online’s ‘Member Community’ category includes both social networking and blogging 2009 The Nielsen Company
Social network and blogging sites Figure 1: Member Community growth twice that of any of the other fi ve most popular sectors are now the fourth most popular activity on the Internet 11Global Global % Point Active Active Increase in ‘Member Communities’ now reach over RankSectorReach Reach Active 5 percentage points more of the Internet Dec 08Dec 07Reachpopulation than it did a year ago – a growth rate more than twice that of any %%%of the other four largest sectors. 2General Interest Portals & %%%The strongest growth has come in 3Software %%%Germany where the sector now reaches 4Member %%%51% of Germans online compared to 39% a year ago – an actual increase of %%%over 12 percentage : Nielsen Online, Global Index, December 2007 – December 2008. . In Dec 08 the Search sector reached % (points) more of the world’s online population than it did in Dec 07Large growth has also occurred in the 1 ‘Global’ refers to AU, BR, CH, DE, ES, FR, IT, UK & USA onlyUK, Spain, Italy and Switzerland – the sector reaching 10% percentage points Figure 2: Germany has seen the greatest increase in online reach of more of the online population in each of Member Community websitesthese countries than it did a year ago. 80%%75%Dec-0873%70%69%Dec-07Germany arrives later to the %67%67%67%%%%%social network %%59%%Natural German reserve when it comes 51%51%to disclosing personal data resulted in %%social networking taking off later than in 78%78%most other countries. As in many 67%63%65%64%64%countries, younger people were the fi rst 61%59%55%in Germany to embrace social networks. However, the activity is starting to 41%39%spread to the wider online population due to sites like “Wer-kennt-wen”, literally translated as “Who Knows Whom.” Including neighbourhood l*K*alnynAea*iiilaclydbUSzaaantpnncommunities and job-related networks, oapIUralraatarl1SJsGBFmrureAeztGi“W-k-w” addresses a more mainstream wSaudience than previous dominant players such asSource: Nielsen Online, NetView, Home and Work Data, December 2007 – December 2008 (*Home only). . In StudiVZ, which targets students. Dec 08 ‘Member Communities’ reached 67% of the global online population compared to 61% in Dec 071 Takeovers by big traditional media ‘Global’ refers to AU, BR, CH, DE, ES, FR, IT, UK & USA only (JP fi gure not included in Global fi gure) companies – bringing signifi cant investment and management experience – have also helped bring Facebook has started to make a bigger as local players already had a signifi cant social networking to a wider audience. impression since launching a German head start. In fact, StudiVZ, started in Publisher Holtzbrinck bought StudiVZ language interface in March 2008 – the last 2006, was so similar to Facebook that (within eight months its audience grew six months of 2008 saw the site triple its Facebook sued it in a Californian court in by 168%) and after TV network RTL, a audience to over million Unique Visitors. 2008, alleging that StudiVZ copied its look, subsidiary of media giant Bertelsmann, feel, features and services. StudiVZ denied bought “W-k-w”, its reach tripled However, Facebook is still only the sixth the a year. most popular social network in Germany 2Copyright 2009 The Nielsen Company
Time spent on social network and Figure 3: The total amount of time spent on Facebook increased by 566%blogging sites growing at over 3x the rate of overall Internet growth Change in total minutes between Dec 07 and Dec 08This increase in popularity is only half All the story when it comes to the social 18%Internetnetworking phenomenon – the time people spend on these networks is also increasing dramatically. Member 63%CommunitiesThe total amount spent online globally increased by 18% between December 2007 and December 2008. In the same Facebook566%period, however, the amount of time spent on ‘Member Community’ sites rose by 63% to 45 billion minutes; and Source: Nielsen Online, Global Index, December 2007 – December 2008 1 ‘Global’ refers to AU, BR, CH, DE, ES, FR, IT, UK & USA onlyon Facebook by a massive 566% – from billion minutes to billion. Facebook’s time is so high due to being the ninth Figure 4: Switzerland has seen the greatest increase in share of time most popular brand online and having accounted for by Member Community websitesthe highest average time per person Member Community Member Community Relative Change (three hours 10 minutes) amongst the CountryShare of Time Dec-07Share of Time Dec-08in % Share75 most popular brands online worldwide. %%38%Switzerland*%%207%Germany*%%140%%%118%Consequently, social networks and %%113%blogs are eating into the share of %%87%time held by other sectors %%59%Because time spent on social networks is growing at a dramatically faster rate %%58%than the Internet average, social %%11%networks are gaining a larger share of all Internet time. In most of the countries Brazil*%%-6%monitored the share of time accounted Source: Nielsen Online, NetView, Home and Work Data, December 2007 – December 2008 (*Home only)for by ‘Member Communities’ has more . Between Dec 07 and Dec 08 the share of time accounted for by ‘Member Communities’ globally increased than doubled. In Switzerland, for from % to % - a relative increase of 38% 1 ‘Global’ refers to AU, BR, CH, DE, ES, FR, IT, UK & USA onlyexample, the share of time has tripled from 3% to %.A year ago ‘Member Communities’ Like social networking, the Video and As the online industry matures and the accounted for one in every 15 online Online Games sectors have also seen value of online real-estate is increasingly minutes globally – now it accounts for strong increases in share of time and it measured by time spent, rather than one in every 11. In Brazil alone, ‘Member seems that the biggest casualty of these pages viewed, a significant shift in Communities’ accounts for almost one increases has been Instant Messaging – advertising revenue from ‘traditional’ in every four minutes. In the UK they another ‘communications’ sector that online media towards social media could now account for one in every six minutes has struggled to attract ad revenues be realised – if the successful ad model (up from every 13 minutes a year ago) consistent with the level of online time it can be in Italy one in every seven (up from accounts in 14 a year ago).3Copyright 2009 The Nielsen Company
1The social network audience is Figure 5: Facebook’s greatest growth in global audience numbers has come from people aged 35-49becoming more encompassing As an entity moves from being niche to a 7Cmajor player the composition, or 785Cehnlclohnl78make-up, of its audience changes. Social 775a775Inetworks online started out amongst 765a76the younger audience. However, as the networks have become more mainstream MwI5Fith the passage of time, it isn’t surprising to see the audience becoming broader F56Fand older. This shift has primarily been driven by Facebook, whose successful A5ICA5Fformula (page 9) opened up the possibilities of social networking to a 75a875Amuch wider audience. 6In terms of sheer audience numbers, for 8 3 7I7M 3 ACAD 3 CaD6 3 FCFD1example, the greatest growth for Facebook has come from people aged Source: Nielsen Online, Global Index, December 2007 – December 2008. . Between Dec 07 and Dec 08 there 35-49 years of age (+ million). was a million global increase in the number of 2-17 year old males visiting Facebook 1 ‘Global’ refers to AU, BR, CH, DE, ES, FR, IT, UK & USA onlyFurthermore, Facebook has added almost twice as many 50-64 year olds Figure 6: The audience composition of Member Community websites is visitors (+ million) than it has added shifting from the young to the oldunder 18 year old visitors (+ million). Consequently, people under 18 years old F%D%are making up less of the social network C%and blogging audience, whereas the 50+ age 8%group are accounting for more of the 8%6%audience. 6%3%15%16%18%1C%1F%1I%153%615D5F1787A18IA31C8CA0Source: Nielsen Online, Custom Analytics, December 2007 – December 2008. . Between Dec 07 and Dec 08, 1the share of the online global audience to ‘Member Community’ sites accounted for by 2-17 year olds decreased relatively by 9% 1 ‘Global’ refers to AU, BR, CH, DE, ES, FR, IT, UK & USA onlyFacebook started out as a service for university students but now almost one third of its global audience is aged 35-49 years of age and almost one quarter is over 50 years old. In the UK, for example, if the average month-on-month audience changes over the last six months were to continue; by mid-June 2009 there would be as many 35-49 year olds on Facebook as 18-34 year olds. The changing audience offers advertisers the opportunity to use social networks as a vehicle for targeting all demographic groups. In Italy, brands such as Maserati – traditionally marketed to an older audience – now have fan pages on 2009 The Nielsen Companydriulhwl mr grmt"l b"kmlril %omnnmsrw0aicmhg km bmkrug Muekgmdg anlonsktknm
Challenges facing advertisers on social networks To realise this opportunity to use social are less inclined to accept advertising A Nielsen Online survey in Australia networks as a vehicle for targeting all around it. A well used analogy is that showed that the challenge could be demographic groups, challenges have to advertising on a social network is like getting more difficult because consumers be overcome. The current level of gate-crashing a actually growing less tolerant to advertising activity on social networks advertising on social media. The study This is compounded by the fact the isn’t consummate with the size – and showed that in December 2008, 38% of content supplied by the social network highly engaged levels – of the online considered advertising members is also of a highly personal on social networking sites to be an A key reason why advertising on social nature. This provides another “Catch-22” intrusion compared to 29% the year networks hasn’t been as successful as on situation for the social networks in that before. Furthermore, those who didn’t the more ‘traditional’ publishers is personal data is potentially one of their mind being served ads if they were because social networkers serve a dual most valuable assets – highly attractive relevant to their interests dropped role as both the suppliers and consumers to advertisers – yet it provides a major slightly from 51% to 47%.of content. In the traditional model they obstacle in generating revenue. As the simply consume the content supplied by site becomes more attractive to advertisers the publisher. Therefore, members have it becomes less appealing to members a greater sense of ‘ownership’ around who see highly-targeted ads as invading the personal content they provide and Social Media ResourcesNielsen Online has a number of social media resources to help you make sense of and keep you updated with what’s happening in the social media space and all areas of the online industry:Analyst Blog the Dots” is a resource for research, insights and commentary on the digital world – including consumer behaviour, industry trends and breaking news – all grounded in world-class data and our deep experience with the world’s top brands. Join us in connecting the dots with your comments and :// BlogPulse is a blog search engine that analyzes and reports on daily activity in the blogosphere. An automated trend discovery system for blogs, it applies machine-learn-ing and natural- language processing techniques to discover trends in the highly dynamic world of :// - Pete Blackshaw, EVP, Digital Strategic Services - Alex Burmaster, Communications Director, UK & EMEA - The Nielsen CompanyMicro-blogging on data, insights, ideas, lessons and trends across the global digital :// The Social Media and Advocacy Roundtable is an exclusive forum for Nielsen clients and analysts to discuss digital best 2009 The Nielsen Company
the fore as the ultimate form of advertising the more successful examples of social What can advertisers and their at a time when traditional advertising is network marketing that touch on the agencies do?suffering from a major lack of trust. principles of interactivity and adding Work with the networks more closely Nielsen’s analysis of social media value – such as offers, sneak previews conversations back in 2007 and again in and co-creation of content. The social networks and advertisers have December 2008 showed that ‘false’ was compatible interests. The networks need Social networks lend themselves greatly the term most closely associated with advertisers to monetise their audience to generating brand affinity for advertisers “advertising”.effectively. Advertisers need the networks through these fan sites, which, in as they have to go where consumers are Social media has fanned the flames of essence, act as advertising. For example, spending more of their time. Both parties consumer distrust about advertisers at the time of writing, Facebook’s will reap significant rewards if they can claims. However, at the same time social “Addicted to Starbucks” group has discover the magic recipe for advertising media has provided the motive, opportunity almost 124,000 members, over 670 successfully on social networks – but and means for advertisers to engage discussion topics and almost 10,000 wall they will need to work together to consumers in a more open and honest . However, the challenge for develop is that discussions within these Advertising should be about adding valuegroups won’t necessarily align itself with New approaches to the ad model are Social networks are ultimately about the brand-designed messaging. Much required for this challenging and friendships, where members add value to like a friendship, marketing on social complex arenaeach other’s lives through interaction. networks requires continual investment It will take time to work out the magic Therefore, advertising should follow the – in terms of time and effort as opposed formula for successfully advertising in same philosophy of adding value through to financial – to be of value to both social networks. The diversity and interaction and consultation. Fan sites or nature of the environment sponsored groups are, perhaps, one of means standard ad models – such as contextual search and standard unit sizes – won’t cut it. Different approaches Figure 7: ‘False’ is the term most closely associated with advertisingacross ad units and ad inventory will have to be tried, involving a trial and %i'k#%o$oumerror mindset. As mentioned above, a closer relationship between the social het"eomu3kesF#ohk1w$%$I&eso%)ukme%o'k e$$whoe%owu$networks and advertisers is required to 1&$%wtk#$Ae#rk%0&)$%erknwsik#$F#wi&h%$make this happen. akk1wu$&tk#$aesk$"se%lw#t$I&w%kDusoukF#wi&h%Advertising must be a conversation dkg$o%kFkw"sk0&$ouk$$rather than a push model8u%k#uk%The point that social network members Ae#rk%oum%mkuh)are co-creators of content and, therefore, 6#kk ei'k#%o$oumhave a sense of ownership within the site %i'k#%o$oum het"eomu6es$k ei'k#%o$oummeans advertising should be about %3c5Mb8a8C7%i'k#%o$oum #k'ku&kF#wtw%kbc ei'k#%o$oum6es$kparticipating in a relevant conversation %i'k#%o$oum hwt"eu)0&) Duk Akioe7k% Duk 6#kkwith consumers rather than simply Ao$skeioumakss ei'k#%o$oum1wttk#hoes ei'k#%o$oum%i$pushing ads on them. After all, it is social 1w$% wl ei'k#%o$oum%i'k#%o$ki "#ohkbksk'o$owumedia. Advertising shouldn’t be about %i'k#%$1wttk#hoesinterrupting or invading the social 1neuuks$%i(w#i$network experience, it should be part of 0ossgwe#i$0#weihe$%k#$this ($"e"k#$Aeme*ouk$The tone of advertising must be more authenticMessaging within advertising should Source: Nielsen Online, BuzzMetrics, September 2008 – December 2008. . in English-language online social come from a more authentic, candid and media conversations ‘false’ is the term most closely associated with advertisinghumble perspective. Social media has, once again, brought word of mouth to 6Copyright 2009 The Nielsen Company
Generating ad revenue – the MySpace storyAlthough Facebook has come some Figure 8: MySpace and Bebo attract more advertising activity in the way towards delivering a promise of UK than Facebook despite having a smaller audiencetargeted ads within a mass network, MySpace’s more focused overall dilnk$$ue+h%ilnbnk$offering seems to be proving more fruitful at the is smaller globally than Facebook and, outside the US, is 61CM7considered more of a niche player because of its mor617ADe focused targeting towards teenagers and young adults MI7FMMthrough the vehicles of entertainment D8M– encompassing music and video – C85ADFAC6and self-expression (decoration options allow profi le pages to be highly customisable).a*n&irn e$#(sw+ g$3 $o am*n&(t'ng&$'3 $o ci"%itr#'Reports estimate that in 2008 a)mtn#ln %651555'0Facebook earned around $US300 million in ad revenue compared to Source: Nielsen Online, AdRelevance and NetView, UK, 2008. around $US1 billion for MySpace. If . Facebook averaged million Unique UK Visitors per month in 2008 and during the year had 451 advertisers who ran a total of 982 display ad campaignsFacebook has made a conscious choice to go for the quantity vs. quality strategy it has yet to overtake MySpace in the all-important revenue ’s ( million) yet managed to Figure 9: Mobile network attract almost one and a half times as operators were the most active Whilst part of Facebook’s huge appeal many advertisers (639 to Facebook’s display advertisers on MySpace is the simple layout of an interface 451). At an arbitrary base level, Facebook UK in 2008 that carries very little ad inventory, attracted display advertisers per MySpace’s offering possibly makes its Unique Visitor, Bebo attracted UK No. of 7 and inventory – of which there is a lot RankMySpace attracted advertisers per AdvertisersCampaignsmore compared to Facebook – easier Unique monetize, particularly in terms of 1T-Mobile46immersive advertising. Bebo, also MySpace has also benefi ted from its 2O242carrying more inventory than Face-acquisition by News Corp and being book, has also done well in this regard assimilated into 3Vodafone42the Fox Interactive by targeting teenagers and young Media stable – together with sites like 4PC World40adults through music and , IGN, Rotten Tomatoes and 5Orange29AskMen – which has provided MySpace Facebook is more focused on the with one of the most mature and “traditional” social networking display ad models within the component of communications, while 7Sky26social network space like MySpace and Bebo are more focused on the entertainment content 8Virgin Media22In the UK, mobile network operators – component. From an advertising such as T-Mobile, O2 and Vodafone – and 9Pogo20perspective, it has been a moot point media companies such as Sky and Virgin 10Halifax16that monetizing content is easier than – dominate the most active advertisers monetizing communications, which on MySpace. Personal communications Source: Nielsen Online, AdRelevance, UK, sites like MySpace and Bebo an . T-Mobile ran 46 different display ad and entertainment are extremely campaigns on MySpace UK during 2008advantage For example, in the UK relevant for sites such as MySpace whose across 2008, Bebo’s average monthly audience is ultimately there to Unique Audience ( million) was communicate and interact with friends almost one-third the size of in an entertaining and personalised 2009 The Nielsen Company
Facebook has replaced MySpace Figure 10: Facebook and LinkedIn have experienced large relative 1increases in global online reachas the world’s most popular social 1network Global Relative Active Active Unique Change in The global rise of social networks in RankSocial NetworkReach Reach Audience Active 2008 has primarily been driven by Dec 08Dec 07(millions)ReachFacebook, which overtook MySpace to become the world’s most popular social %%168%network. %%-3%Less than four years after Harvard 3Classmates %%40%student Mark Zuckerberg founded %%7%Facebook in February 2004, its rapidly soaring popularity saw it included in the %%137%2008 edition of the Collins English Source: Nielsen Online, Global Index, December 2007 - December 2008. Dictionary (as a noun and a verb). . In Dec 08, million people (30% of the world’s Internet population) visited Facebook. Facebook’s Facebook is now visited by three in every online active reach has increased, relatively, by 168%, from % to %1 ‘Global’ refers to AU, BR, CH, DE, ES, FR, IT, UK & USA onlyten people online across the has been a mixed year for the leading Figure 11a: The most popular social networks in countries where players in terms of their global footprint. Facebook is the leaderFacebook (168% relative increase) and LinkedIn (137%) have seen huge RankAustraliaSpainSwitzerland*FranceUKItalyincreases in reach. Classmates Online has also seen strong growth, whilst 1FacebookFacebookFacebookFacebookFacebookFacebookOrkut and MySpace‘s reach has stayed fairly ’Internaute 2MySpaceTuentiNetlogMySpaceMySpaceCopainsdavant3BeboMySpaceMySpaceMySpaceBeboNetlogIs the Italian Government the only thing stopping Facebook?The issue of low productivity in the Figure 11b: The most popular social networks in countries where Italian workforce has been taken on Facebook isn’t the leaderby the Minister for Public Adminis-RankBrazil*ChinaGermany*JapanUSAtration. Last year Renato Brunetta, declared war on the “fannulloni” – 1Orkut51Wer-kennt-wenMixiMySpacesluggards – of the Italian public sector workforce, achieving a near 50% drop in the number of sick 2SonicoXiaoneiStudiVZLococomFacebookdays within a few months. Facebook is also a target and Italian companies, Classmates 3MySpaceChinarenMySpaceKanshin-kukanOnlineboth public and private, are blocking access to the site – Poste Source: Nielsen Online, NetView, Home and Work Data, December 2008 (*Home only). Italiane (the Italian mail service) . Orkut is the most popular social network in the first to do so in November 2008. However, there are ( = domestic social network)compromises – employees within the Naples municipality are allowed an hour per day on 2009 The Nielsen Company
Why Facebook has become the Figure 12: Facebook has the greatest online reach in the UK and Italy world’s most popular social network( = Facebook not the most popular social network in that country)Based on a simple design, broad demographic appeal and a focus on connecting, Facebook has become the 47%most popular social network in the 44%majority of countries measured by 38%Nielsen Online. It has the greatest reach in the UK, being visited by 47% of 33%30%Britons online, and actually has a greater 29%28%27%online reach in both Italy (44%) and Australia (38%) than it does in its country of origin - the USA (33%).Overcoming privacy issues 6%quickly2%%Occasionally it seemed the only thing l**Kya*eAnnalililcyidSabUaaanztnnpoIrUpaalathat could stop Facebook’s meteoric riseta rarlS1sJrGFmBuerzAetwas how it dealt with its members’ data. iGwSFacebook’s u-turn in February 2009 on retaining users’ content and licenses Source: Nielsen Online, NetView, Home and Work Data, December 2008 (*Home only). after they terminated their account . 30% of the world’s online population visited Facebook in Dec 08came after protests from members and 1 ‘Global’ refers to AU, BR, CH, DE, ES, FR, IT, UK & USA only (JP fi gure not included in Global fi gure)uproar in the blogosphere. Architecture. Inventive features (including Factors contributing to Facebook’s Facebook also incurred the wrath of its applications, invites, requests) and open members over the Beacon advertising rapid growtharchitecture - including the masterstroke system that sent information about Design. An organized, simple and to open the platform to applications members shopping habits and activities easy-to-use interface – with much less developers – have increased word-of-on other websites to Facebook – mainly advertising compared to many of its mouth and visitor allow targeted ads to be served on competitors – is likely to appeal to a Facebook. This caught many members Privacy. Members have more control wider guard and, after initially defending over who sees their content than in the system, Facebook backed down to Broad appeal. Facebook isn’t targeted many other networks where non-allow members to opt out of a specifi c demographic like many members can access personal content – other players (. StudiVZ to students or a concern for many people. In September 2006 the “News Feed” Bebo to young adults) – ironic considering feature that allowed members to track Media coverage. Facebook’s early that it started out as a network for their friends’ Facebook movements was momentum was given a huge boost due university students. greeted by protests that numbered in to the large amount of free media the hundreds of thousands of people Activity Focus. Facebook is focused on coverage it a day. Within 48 hours of the connecting as opposed to entertainment. roll-out Zuckerberg had openly stated It can be used for multiple networking the site had “messed up” and improved activities – reuniting old friends, business the privacy , dating, sharing photos, status updates. Facebook is Reunion, Facebook has now given members LinkedIn, Yahoo! Personals, Flickr and comment and voting rights over Twitter all in ’s future policies on how the site is 2009 The Nielsen Company
First-mover advantage and Figure 13: Music is a major difference in discussions around Facebook and MySpacelanguage have kept Facebook at bay in some countries50%IdgieuuoM'bwdgi3A%Although five years old, Facebook only came to global prominence in the last 37%two years, allowing time for other social 33%networks to take a strong hold. Creating 30%a local infrastructure on the ground to 30%establish a relevant local offering 1A%1A%tailored to the nuances of the domestic 16%17%market has been enough to keep 13%Facebook at bay in some countries. In 10%Germany, for example, local player D%10%Wer-kennt-wen is twice as popular as C%A%Facebook. In Japan, Mixi is around 27 8%7%times more popular than Facebook and, 7%in Brazil, Orkut is 29 times more popular. 3%Brazil: the Orkut phenomenon0%I"nith#a"u(riamu$u#M%#nga"ueris#cnhiuFwwrngd$nutNamed after its creator, Google employee Orkut Büyükkökten, Orkut Source: Nielsen Online, BuzzMetrics, December 2008. appeared in 2004 and students in major . In Dec 08, 22% of English-language online social media posts citing Facebook mentioned friendsBrazilian cities started to distribute invitations for fun to see if they could make Orkut more popular in Brazil than USA: MySpace’s mass-market appealIts music offering, MySpace Music, is a its native USA – something they key differentiator and remains a huge succeeded in doing. Orkut is the most MySpace had already gained a draw in the US, being used by almost popular social network in Brazil but also significant following in the US by the every major music act in the country the country’s third most popular site. time Facebook appeared on the scene. which keeps the content fresh and Half of the Brazilian Internet population Furthermore, Facebook earned an early people coming back. Music’s importance visited Orkut in September 2005 and reputation as an exclusive service due to for MySpace versus Facebook is shown the figure is now 70% – the largest its birth within the elite northeast though an analysis of social media domestic reach of any social network college sector. This stalled growth within conversations - music is the biggest anywhere in the world. the mainstream US market that difference between topics discussed. It’s MySpace appealed to. The US perception Facebook barely registers a blip in Brazil mentioned in 20% of posts about of Facebook and MySpace is a reversal of compared to Orkut – being visited by MySpace compared to just 7% in posts the situation internationally, where just over 2% of Brazilians online. It’s not about is perceived as mainstream inconceivable that if Facebook had and MySpace as being more focused This has, so far, managed to keep started a few months later, Brazilian around a younger demographic through MySpace ahead. However, at current students would have taken it on as their entertainment and self growth rates, Facebook (145% pet project and Facebook would have growth from December 2007 – December been the ‘Orkut of Brazil.’ Facebook only MySpace had established itself as an 2008) is set to overtake MySpace (3% launched a Portuguese version for entertainment portal rather than just a growth) in January in December social network. 10Copyright 2009 The Nielsen Company% uk utrnti #ugndr sihnd wu#$# sit$nutntl $mi ti$&u"o
China: a different cultureA host of established domestic social networking players added to Figure 14: China’s most popular social networksthe different culture, language and the Average Weekly Unique Browsers in regulatory issues of doing business in RankSocial NetworkDecember 2008China are the main reasons why the US social networks aren’t dominant here. By time the US networks arrived, local such as Xiaonei; the portal QQ and had achieved dominance in demographic groups. Although many the domestic social networks are very based on the US offerings, their success was originally based on having with the portals which them with an audience in China takes more than producing a translated version; it requires in a local infrastructure and a of running a Chinese social Source: CR-Nielsen China, NetRatings, December 2008. . In Dec 08, was visited by network that understands the domestic an average of million Unique Chinese Browsers each weeknuances of social network behaviour rather than simply rolling out a generic social network in Chinese. Japan: the language barrierA localised offering is essential to Whilst Facebook has a good following Furthermore, networks have to be cracking the Japanese market and getting amongst Japan’s international community adapted for the enormous domestic anywhere near the utter dominance of and its strength in privacy will appeal to mobile Internet market. Part of Mixi’s Mixi. Facebook only launched its the native Japanese way – Mixi is an dominance is down to the clever Japanese language version in May 2008 invite only system – previous US companies integration of its mobile and PC offering and did so without any major form of have fallen short because of a lack of local – its mobile version was launched in investment in the country – it didn’t set leadership and a ‘humble’ mindset that September 2004 and offers virtually up a local office and the translated acknowledges being big in the US doesn’t identical functionality to the PC version was done by volunteer mean being big in Japan. 2009 The Nielsen Company
Mobile Social Networking is Figure 15: Social networks have the greatest mobile web reach in the UK and USTaking OffAs Mixi in Japan shows, the increasing l"t%)s h#ntus e"(s&"s( b)rts"os 0666'1 iC 866Mpopularity of social networks has resulted in increasing demand to access them on the move. Mobile is a natural 73aF7fit for social networks, as consumers are used to connecting with friends via 763F7Mmobile calls and text. Using the phone to access social networks doesn’t require much change in consumer access social networks on IIAtheir mobile through three primary MFDC67means: by browsing over mobile Web885I%, through downloaded applications and 7a58%by SMS (text-messaging).CMDUK mobile web users have the greatest 785A%765F%765F%propensity to visit a social network through their handset with 23% of them F5F%(2 million people) doing so, compared to 19% in the US ( million people). The numbers of people doing so are a big lglkc&m"ose(mu*k$mt"ds&wm"*increase on last year – 249% in the UK and 156% in the : Nielsen Online, Mobile Media View, Q4 2008. . 23% of UK Mobile Web users ( million people) visited a social network through their mobile phone in Q4 08The most popular social networks via PCs/laptops tend to be the most popular via mobile too. Facebook is the most popular in five of the six countries where Nielsen measures mobile activity – only Xing in Germany bucks this applications for handsets such as Apple’s iPhone are playing a substantial role in the expanded mobile use of these networks. Soon after the launch of the 3G iPhone, Facebook, with one of the most popular iPhone applications available, surpassed MySpace in mobile usage in the (text message) is the third way users can interact with their social networks on the go. Primarily used for “status updates,” users can register a phone to send text message posts directly to their user profile. By the end of 2008, Nielsen estimated that almost 3 million . mobile users were texting Facebook on a regular 2009 The Nielsen Company
What can publishers do?Understand that social networks are an Instant Messaging has been a casualty of These early trends potentially indicate opportunity for everyonesocial networking in terms of a falling that online usage is complementing, not share of online time yet Windows Live substituting, traditional television Social networks are a communication Messenger, for example, has almost one viewing. Social networks and TV, channel just like TV, newspapers, radio million Facebook fans - around which a therefore, might be a mutually reinforcing and the telephone. Therefore, social whole community of discussions take media as the level of twittering (updates networks are just another vehicle by place. It’s quite feasible that the falling sent through the micro-blogging service which any company with an offering, share of time for IM could be more Twitter) during the recent Oscars proved. product or service can use to communicate, pronounced without this form of engage and connect with the successful ad model turns participatory advertising in social networks. out to be in social networks – copy itTap into what makes social networks successfulSuccess in social media advertising Think about the mutual relationship means overcoming obstacles such as Publishers have the opportunity to with social networks and other mediacomplexity, creativity and relevance. actively participate in the social media A Nielsen study published in October Therefore, whatever the successful revolution. The growth of social media 2008 showed that almost one-third of formula turns out to be in terms of new and consumers’ willingness to generate home Internet use (31%) in the US is ad formats and a different approach to opinion and co-create content is a big accompanied by background TV viewing. ad inventory, the ingredients could form opportunity for traditional publishers to Furthermore, more than 80% of the ‘best practice’ for advertising across increase audience and engagement on Americans who watched TV and used the all sectors – improving the success of their own sites. Internet in September 2008 used both online advertising . Although teenagers were ‘Internal’ - Increase interactivity within the most likely to use both together, the publisher siteadults aged 35 to 54 actually logged the Publishers should instigate functionality most simultaneous Internet/TV usage that enables communities and conversations minutes. to form within their own sites. This doesn’t mean creating a social network News publishers Twitter followingsinfrastructure but can be as straightforward as allowing visitors to comment or Increasing numbers of news publishers – also seen as a casualty of growth in online media create content related to material - have adapted from simply having websites to participating in social media through active posted by the publisher. This enables use of sites like Twitter to drive awareness and conversation around their brands and traditional publishers to become part of offerings. CNN and the New York Times have some of the largest followings on wider consumer conversation rather than just pushing content and sitting 16: News publishers have considerable Twitter followings(and counting...)‘External’ – Participate in the conversation on social network sitesPublisherUsernameNumber of followersJust as consumers add content to social CNN Breaking Newscnnbrk323,258network sites, so can publishers. Social The New York Timesnytimes208,032networks offer the opportunity to promote content to a wider audience BBC ClickBBCClick140,941across the web. Traditional publishers are Guardian Techguardiantech116,845amongst the most popular fan pages on Source: Twitterholic, 27th February 2009Facebook, some having hundreds of thousands of fans. 13Copyright 2009 The Nielsen Company
Conclusion: Social Networks provide the trigger to improve the potency of advertising across all forms of mediaThe social networking phenomenon is The Industry faces a huge predicament. This will involve a substantial trial and dramatically changing the way people The factors behind Facebook’s stunning error process and is only achievable if the behave and, consequently, offers new growth – a focus on connecting through a social networks, advertisers and their challenges and opportunities to the simple and relatively advert-free design – agencies work more closely together. global media and advertising industry haven’t attracted ad revenues consummate Whatever the successful ad model turns alike. Social network and blogging sites with the size and engagement levels of its out to be, the messaging will have to be now account for almost 10% of all audience. On the other hand, MySpace’s authentic and humble, and built on the Internet time yet remains, with a few audience is flattening but its ad model – principle of a two-way conversation – exceptions, a largely un-monetised form built around a richer content offering, not a push model – that adds value to of media. The industry is still in its more in line with traditional online the in regards to successfully publishing – is doing better at attracting If this magic formula is found, the adapting its traditional ‘modus operandi’ ad revenues. benefits could be truly incredible, having to take advantage of this fundamental A magic formula to overcome this the potential to transform the potency change in consumer and effectively monetise of advertising across all forms of media Whilst social networks provide significant online’s most heavily used sector, to connect with target audiences and competition for traditional publishers in hasn’t yet been found. However, a major overcome the current distrust consumers terms of consumer attention, they also ingredient will be a fundamentally new have with significant opportunities. approach to the online ad model in Publishers can improve engagement with terms of both ad units and ad inventory. their own audiences – by tapping into consumers’ increasing desire to create content – and can use social media to syndicate their content beyond its traditional confines to a much wider 2009 The Nielsen Company
About this report: The data and insights contained in this report come from the following Nielsen Online : The Industry Benchmark for easy access and customization of BuzzMetrics: The global standard in Internet Audience MeasurementAdRelevance data. Whether you buy, measuring consumer-generated media NetView tracks usage across Web sites and sell, create or analyze online advertising, (CGM)digital applications to deliver high-quality AdRelevance provides actionable, timely With solid data-mining technology, superb audience data and analytics. Through information to build effective and efficient research and Nielsen’s unrivalled experience in metered measurement of representative online marketing strategies media measurement and client services, panels of Internet users, NetView reports and ad campaignsBuzzMetrics helps today’s companies, brands industry-standard metrics—including and business professionals better understand Custom Research & Analytics: Linking unique audience, page views and time the influence and impact of CGM on products, Consumer Attitudes and Behaviours for spent—as well as loyalty indicators, issues, reputation and Online Insightdemographic information and other key Nielsen Online’s powerful survey and Digital Strategic Services: Strategies and insights into online activity and consumer research capabilities, e-commerce tracking, Tactics to Manage Online Exposure and information and in-depth Grow Brand AdvocacyAdRelevance: Accurate Intelligence about analysis enable you to successfully Digital Strategic Services is a full-service Online Advertising Activitymaximize your global Internet marketing CGM consultancy that gives you the AdRelevance is the only online advertising investment and understand how consumers resources, analysis, advice and tactics to measurement system that mimics actual respond to products, services, brands and proactively exploit today’s digital opportu-Internet population usage by automatically promotions – both online and , so your brand’s advocacy-building adjusting itself to traffic patterns. An program can reach its full , award-winning interface enables For more information on the report, or any of these solutions, please contact: International:USA:Alex Burmaster, Communications Director, UK & EMEA Nic Covey, Director of Insights @ @ +44 20 7014 0590+1 312-385-6718About Nielsen Online: Nielsen Online, a service of The Nielsen Company, delivers comprehensive, independent measurement and analysis of online audiences, advertising, video, consumer-generated media, word of mouth, commerce and consumer behavior. With high quality, technology-driven products and services, Nielsen Online enables clients to make informed business decisions regarding their Internet, digital and marketing strategies. For more information, please visit . Also, visit our blog at About CR-Nielsen: CR-Nielsen, partner of ChinaRank, is the Nielsen Company’s joint venture in China. CR-Nielsen is focused on providing scientific and comprehensive traffic data analysis services, including online marketing analysis, online advertising delivery, marketing intelligence, competitive analysis, client orientation, website operation and other data services for commercial use. For more information, please visit The Nielsen Company: The Nielsen Company is a global information and media company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and business publications (Billboard, The Hollywood Reporter, Adweek). The privately held company is active in more than 100 countries, with headquarters in New York, USA. For more information, please visit 2009 The Nielsen CompanyAll rights reserved. Nielsen and the Nielsen logo are trade marks of The Nielsen Company.
