There has been a rush by brands in the last 24 months to embrace Facebook as the primary destination to connect with their consumers. The belief has been that consumers with their ever increasing network of friends represented an opportunity to disseminate their message in a cost effective manner. Recently however there have been a number of research reports indicating a decline across the board of engagement levels on social networking sites around the globe. This decline is concentrated in the key 18-29 YO demographic or post college but younger than 30 age set. This document will try to shed some light on:
What are the actual social networking trends?
Are their basic human drivers behind these trends?
What are the technological drivers enabling these human drivers?
What are the implications for brands and agencies?
How do we exploit these changes on behalf of clients?
3. SUMMARY
There has been a rush by brands in the last 24 months to embrace Facebook as the primary
destination to connect with their consumers. The belief has been that consumer with their
ever increasing network of friends represented an opportunity to disseminate their message in
a cost effective manner. Recently however there have been a number of research reports
indicating a decline across the board of engagement levels on social networking sites around
the globe. This decline is concentrated in the key 18-29 YO demograhic or post college but
younger than 30 age set. This document will try to shed some light on:
• What are the actual social networking trends?
• Are their basic human drivers behind these trends?
• What are the technological drivers enabling these human drivers?
• What are the implications for brands and agencies?
• How do we exploit these changes on behalf of clients?
3
4. SOCIAL NETWORKING MYTHS AND REALITIES: A SUMMARY
BELIEF REALITY
Social networking is a new phenomenon Only the mechanic is new
Despite the advent of digital the actual size of intimate reciprocal
Digital allows humans to maintain large reciprocal networks
networks are small (20-40 people) and a maximum of 150
Brand pages are generally a waste of money & time unless they
I just need to create a Facebook presence
are executed well with a marketing plan behind them
Brands can reach a large network of people using social Most consumers will never see your message
Facebook transforms marketing The same old marketing rules apply
Mobile is still new Mobile will over take online in a year
Over sharing of information is a new consumer behavior
Only the mechanic is new
driven by social networking
4
6. FACEBOOK REMAINS DOMINANT PLATFORM
U.S. Visitor Trend for Leading Social Networking Sites
180,000
160,000 Facebook.com
140,000 Linkedin.com
Myspace.com
120,000
Twitter.com
100,00 Tumblr.com
80,000 GOOGLE+
60,000
40,000
20,000 FACEBOOK IS
0
0 0 0 0 0 0 0 0 0 0 0 0 0
STILL WINNING
1 1 1 01 1 1 1 1 1 1 1 1 1
-20 - 20 20 2 20 20 20 20 -20 20 -20 20 20
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5 Source: Comscore Media Metrix, U.S., Jun-10-Jun-11
7. BUT GLOBAL DECLINE IN SOCIAL NETWORKING USEAGE HAS BEGUN
Decline is seen in
the key 18-29 Year
Old User
But:
Middle age groups
continue to grow and
are the fastest
growing
7 Source: http://globalwebindex.net / August 2011
8. DECLINE IN FB USEAGE BY ACTIVITY
10.0%
July 2009 -> June 2011
5.0%
Over time Facebook
0.0%
usage contribution
-5.0%
drops off and
-10.0%
involvement
becomes more
-15.0%
ts
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8
9. THE MAJORITY ABANDONING FB ARE YOUNG ADULTS
9
1/4
OF YOUNG ADULTS (18-29YO) LEAVING THE SOCIAL NETWORK
SOURCE: http://www.gartner.com/DisplayDocument?ref=clientFriendlyUrl&id=1724424
10. WHY THIS DECLINE IN USEAGE?
“boredom” and “getting tired” of
the services
10
13. MOVE TOWARDS HYPER PERSONAL, HYPER LOCAL ACTIVITIES
INCREASED
0.0%
5.0%
MOVE TOWARDS:
Played a game HYPER LOCAL
Started a group
HYPER PERSONAL
Online dating
ENGAGEMENTS
+
Joined a branded group
LOW ENGAGEMENT HIGH
Uploaded videos on your profile
IMPACT ACTIVITIES
(video - analogous to a form letter)
US College Educated < 30
13 Source: http://globalwebindex.net / August 2011
14. Tumblr
Total Users
FACT:
Activity is down and they are Per Day
“leaving” FB.
0 12500000 25000000 37500000 50000000
Instagram
WHERE:
They are moving towards Tumblr,
Total Users
Instagram, Path, Color, and
GroupMe: Passion groups with
more authentic experiences. Per Day
0 2000000 4000000 6000000 8000000
Source: http://www.gartner.com/DisplayDocument?ref=clientFriendlyUrl&id=1724424
17. Because social was largely a activity done online it was used
to fill in the time between other tasks.
As mobile has freed us from being tied to desktops it has
made us more terrestrially focused creatures with mobile
acting as the tether to our virtual lives.
As these terrestrial experiences become more deeply
personal, physically managing large networks of “friends”
becomes “boring” and “tiresome.”
18. THERE IS A HISTORICAL PRECEDENCE FOR THIS
150
Dunbar's number is suggested to be a
theoretical cognitive limit to the number
of people with whom one can maintain
stable social relationships. These are
relationships in which an individual knows
who each person is, and how each person
relates to every other person.
There is debate about the exact number
but it is somewhere between 100 and
DUNBAR’S NUMBER 250
BACKGROUND: Dunbar's surveys of village and tribe sizes also appeared to approximate this predicted value, including 150 as the estimated size of a neolithic
farming village; 150 as the splitting point of Hutterite settlements; 200 as the upper bound on the number of academics in a discipline's sub-specialization; 150 as
the basic unit size of professional armies in Roman antiquity and in modern times since the 16th century; and notions of appropriate company size.
18
19. The average 22-year-old has over
1,000 Facebook friends
Far beyond the carrying capacity of Dunbar’s Number
source: http://www.intersperience.com/ May, 2011
20. BUT THE
AVERAGE
USER HAS ONLY
130 FRIENDS DUNBAR’S NUMBER
source: http://www.facebook.com/press/info.php?statistics August, 2011
21. FRIENDS BY AGE: LIFE STAGE
Group Acceptance Self Actualization & Intimacy
The social networking life cycle
1,000
1000 is to move from one of seeking
group acceptance to one of
self identity and intimacy.
750 College
As we get older we move
towards smaller more intimate
500450 groups and individual
passions.
Early Adult Life Middle Age
Jr High/High School
250
150 Older users will never have
75 large networks because they
20 have moved beyond the group
0
acceptance phase of life.
13-16 YO 17-22 YO 30+ YO 40+ YO 50+ YO
21 source: intersperience, gene keenan
22. SO, SIZE DOES MATTER: SMALLER NETWORKS GET MORE LOVE
Established Relationships
40
One-Way Communication
Reciprocal Communication
# OF PEOPLE
30
Despite large network sizes.
Reciprocal communication
20
remains with a small intimate
group
10
0 NETWORK SIZE
0 100 200 300 400 500
22 source: http://overstated.net/2009/03/09/maintained-relationships-on-facebook
23. Q: WHAT IS THE NATURE OF THOSE HIGH
REACH ONE-WAY CONVERSATIONS?
24. ERIC BERNE
Creator of
Transactional Analysis
Pastime Conversations
A pastime is a series of transactions that is
complementary (reciprocal), semi-ritualistic, and is
mainly intended as a time-structuring activity:
Small talk.
Pastime conversations are low engagement but
of high value from a ritualistic standpoint
Example (while running into someone on street):
Talking about the weather
Headline news
http://en.wikipedia.org/wiki/Transactional_analysis
25. THE RITUAL IS THE SAME TODAY BUT THE CHANNELS HAVE CHANGED
YESTERDAY: IN-PERSON TODAY: VIRTUAL
Talking about the weather Twitter updates
General small talk Facebook updates
Content from analog Content from digital+
LOW REACH HIGH REACH
BUT BOTH ARE LOW
ENGAGEMENT
25
26. MOST SOCIAL INTERACTIONS ARE “PASTIME” CONVERSATIONS
Average User*
“Sharing Information” Low Engagement
“announcements”
Broadcast out but typically not
read, commented or synthesized*
The primary difference between
analog and digital ritual
conversations: digital are typically
not reciprocal (because they are not
in-person)
*You can most easily see this in twitter where information is
broadcast and forwarded but rarely analyzed for accuracy. At the end
of the day it’s not the content that matters but the ritual of sharing it.
26 source: http://overstated.net/2009/03/09/maintained-relationships-on-facebook
27. BUT BASED ON THIS RESEARCH THEN FACEBOOK ADVERTS SHOULD NOT BE EFFECTIVE
FACEBOOK CTR GOOGLE ADWORDS CTR
0.011-0.165% 0.4-0.7%
but...
conversions
were practically
non-existent
27 source: http://bit.ly/mYPZ9k
29. FIRST: WHAT ARE CONSUMERS PERCEPTIONS OF MEDIA?
Emails I signed up for Editorial content such as a newspaper article Ads in magazines Brand websites
4% 3% 11% 3% 6%
3% 4% 4% 4%
36% 46% 12%
34% 49%
22% 52% 17%
31% 49% 11%
Ads served in search engine results Products shown embedded in TV Ads on mobile devices Ads in radio
2%
7%
2% 2% 3% 6% universal in
19% 52% 19% 15% 53% 18% 11% 11% 50% 22% 15% 24% 51% 16%
lack of trust
Online video ads Online banner ads Ads on social networks Ads on TV
2% 2% 2% 7%
3%
17% 52% 20% 9% 14%
51% 23% 11% 13% 48% 24% 13%
26% 45% 19%
Trust Completely Trust Somewhat Neither Trust nor Distrust Don’t Trust Much Don’t Trust At All
29 Nielsen, Global Online Survey, Q1 2011
30. INDIVIDUAL relationships and collective wisdom however DO WORK
RECOMMENDATIONS FROM PEOPLE I KNOW CONSUMER OPINIONS POSTED ONLINE
note drop off
between
#1 #2
4% 2%
2%
1%
18% 58% 21% 45% 38% 10% friends and
just
consumers
Trust Completely Trust Somewhat Neither Trust nor Distrust Don’t Trust Much Don’t Trust At All
30 Nielsen, Global Online Survey, Q1 2011
31. FACEBOOK REALIZES THIS WHICH IS WHY THEY DO THIS:
Facebook attempts to be a “friend” by
selling ads based on friend likes
31
32. GE STUDY PROVES CONSUMERS RESPOND TO SHARED CONTENT
Research proves
that close
relationship
recommendations is
the best way to win
32 source: http://adage.com/article/digital/ge-study-proves-consumers-respond-shared-content/232324/
34. MEASURING CORE FANS ON FACEBOOK
CORE FAN:
Any fan whose comment count is higher
than the average is a “core fan”.
This number ranges from 1.14 for Bob
Marley to 2.03 for Bob Marley.
WHY THIS IS IMPORTANT:
Unless a fan actively participates in a brand’s
Facebook Page and their activity on the Page
has been continuous, the brand’s status
updates will cease appearing in the fan’s
Facebook news stream.
34 source: http://bit.ly/mYPZ9k
35. Q: WHY ARE CORE FAN COUNTS SO LOW IF
BRAND X OR ARTIST Y IS A PASSION POINT?
36. Campfire Versus Fireworks Theory
Brand X or Artist Y might be a
passion point but when that
interaction takes place in
Facebook it becomes less
authentic because it’s not
close and intimate
Close intimate lasting Group experiences, exciting
conversations but not intimate
source: Sam Huston
37. IMPLICATIONS
FACT:
Young users are moving to mobile at an accelerated rate
RESULT:
Mobile allows casual connections to be maintained in a one
way “shout out” (pastime conversation) using video posting
while engaging in deeper connections with “true friends” and
personal passions through smaller more intimate networks
Facebook moves from ‘Passion Point” to “Utility”
37
39. FACEBOOK
FACT:
Young users activity already mirrors that of older users once you
strip away the “Maintained and One-Way” relationships
RESULT:
Young users will maintain large networks through pastime
conversations but will have a smaller group of close connections
(either through FB or a another third party passion site/app).
39
41. THE PATH FORWARD
INSIGHT SOLUTION
Brands need to move beyond Pastime type For social this means
conversations with consumers and into deeper • Being mobile which means understanding where
more meaningful relationships with them mobile is going
This means: • Going smaller by focusing on passions like:
• Understanding your consumer • Instagram
• Tumblr
• Knowing their passions
• Path
• Relating to those passions
• etc.
• Being where they are
• Providing services instead of advertising. The best
• Providing value way to do this is with mobile
• Creating opportunities to share instead of advertising
to
41
44. MOBILE INTERNET IS NOW FREE AND EVERYWHERE
Observation:
Smartphones are now “free”
Implication:
Acceleration of the mobile
consumer
44 Source:AT&T / August 2011
45. IN 12 MONTHS MOBILE WILL OVERTAKE ONLINE
NOW 1 YEAR FROM NOW
1% 3%
1% 12% 11%
7% 7%
2% 18% One year from now
mobile devices
combined will match
19% PC/Laptops as
people’s preferred
77% 42% internet access device
E-Reader Mobile Phone Personal PC/Laptop
Tablet Device Through my TV Work PC/Laptop
WHICH OF THE FOLLOWING IS YOUR FAVORITE DEVICE TO ACCESS THE INTERNET
45 Source: http://globalwebindex.net / August 2011
46. MOBILE DRIVING SOCIAL NETWORKING GROWTH
April 2008 April 2009 April 2010
Category # of Unique Users # of Unique Users # of Unique Users
(000) (000) (000)
500% Social
5,270 13,905 27,007
Networking
412%
375% Search 11,817 24,846 35,573
Entertainment 9,687 17,330 25,791
250% 218%
125%
0%
Social Networking Search
46 source: nielsen - april 2010
47. MOBILE SOCIAL NETWORKING APP USEAGE IS SOARING
240% since last year.
Pastime social networking activity is quickly moving
to mobile
47 source: comscore - June, 2010
48. LARGE MOBILE COMPANIES
2x more active than desktop-only users
Mobile = 50% of total active users,
200 MM mobile active vs. 25% Y/Y
users vs. 50MM in 9/09 Mobile = 40% of all tweets
50% of all users subscribe on
100MM mobile users vs. 50MM Y/Y
mobile
48 Source: KPCB / June 2011
49. 60%
Of all Smartphone owners have used a
location based service
source: Pew Research Center’s Internet and American Life Project
50. HOW CAN BRANDS REACH
CRM for those users who “Like” the brand can be used to generate
the “friend recommendation” (most effective) brands want.
EXAMPLE:
Lauren Mary
Banana Republic
sends Lauren a
coupon for
Like Works
shopping and tells It leverages a brand
Likes Banana her she can bring a advocate to act as a
Republic They go shopping sales person on the
friend: She brings
her friend Mary. brands behalf
50
51. Facebook counts as “active” users who go to its Web site or its
Title Line One mobile site. But it also counts an entire other category of people
Secondary title line
who don’t click on facebook.com as “active users.” According to
the company, a user is considered active if he or she “took an action
to share content or activity with his or her Facebook friends or
connections via a third-party Web site that is integrated with
Facebook.”
Come again?
In other words, every time you press the “Like” button on NFL.com,
for example, you’re an “active user” of Facebook. Perhaps you
share a Twitter message on your Facebook account? That would
make you an active Facebook user, too. Have you ever shared
music on Spotify with a friend? You’re an active Facebook user. If
you’ve logged into Huffington Post using your Facebook account
and left a comment on the site — and your comment was
automatically shared on Facebook — you, too, are an “active user”
even though you’ve never actually spent any time on facebook.com.
51 http://dealbook.nytimes.com/2012/02/06/those-millions-on-facebook-some-may-not-actually-visit/