Study: Social Media’s Hot, Entertainment’s Not

A report, “Social Networkers U.S., Who they are and what they mean for next-generation online advertising,” released by Netpop Research finds a rise in the amount of time consumers spend on social networking sites over the past two years.

Between 2006 and 2008 activity on social networking sites has grown 93 percent. “More time is spent on social media and spent communicating,” Netpop Research Analyst Cate Riegner told ClickZ.

“Surprisingly less time is spent on activities like shopping and entertainment,” said Riegner. In 2008, people online spent 10 percent of their time shopping down from 12 percent in 2006, and 19 percent of their time on leisure and entertainment, such as playing online games and downloading music.

The shift calls for a new approaches to advertising, said Riegner. “Advertising has, to a large extent, developed for people who are going online to acquire a service,” she said. Those services included searches for airline tickets and price comparisons for consumer electronics. “Advertising developed as a way of catching people,” she said.

With the rise of social media, advertising needs to change so that it involves the consumer. Sites such as Facebook and MySpace have experimented, though the right format hasn’t been borne out. “The question is yet to be answered. Facebook is experimenting with some ads; it’s not going the route of MySpace [with Flash-based ads”. Look to Facebook as the first baby-step, where a company tries to engage the consumer in a dialogue,” Riegner said.

The economic downturn may hinder development for advertising within the social media space. Research released by eMarketer indicates spending on social networking sites will grow, but at slower rate than previously thought. It now estimates advertisers will spend $1.2 billion on social networks this year, down from a previous projection of $1.4 billion it stated in May. Estimates for 2009 are thought to reach $1.3 billion, down from a previous projection of $1.8 billion.

“Advertisers, companies, and agencies need to take a closer look and start to experiment,” Riegner said. “It’s at a time when agencies are averse, and need to go with a tried and form [of advertising”.”

The shift in social networking participation can be attributed to broadband adoption, at least in part. Of the 138 million U.S. broadband users, 105 million or 76 percent are considered “contributors” and 24 percent are considered non-contributors. Contributing activities include uploading audio, video and photos, posting to a wiki, creating podcasts, tagging articles, blogging and micro-blogging, living in a virtual world, and rating and reviewing products.

While the study found that people engaged in social media spend less time shopping, they are still avid consumers, spending an average of $101 a month online compared to $80 spent by those visiting social media sites, but not “contributing” content. And social networkers use many sources to help them in their purchase decisions, from search engines to social networking sites.

Netpop research is based on an online survey of 4,384 broadband users age 13 and older. Respondents are selected using a proprietary sampling process.

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