On January 15, 2008, the Financial Times reports that "Social networks threaten advertising growth." The article covers the "Social Media Futures" report due the following week from the Institute of Practitioners in Advertising. While the IPA is concerned about its constituency, the agency business, there are other significant implications for entertainment, media, and audiences.
The article claims that paid advertising will decline on all media, for two reasons. First, as more consumers spend more time on social networks, dollars will shift accordingly. Second, ads on social networks don't generate high click rates because “within this environment, one needs to acknowledge that more often than not you are interrupting private conversations,” Mr MacLennan (IPA president and chief executive of M&C Saatchi Worldwide, an agency).
But interestingly, these communications are directly related to making buying decisions - from entertainment to laundry detergent – “Joe Staton, planning director at the Future Foundation, who co-wrote the report, said ‘as people are being more considered about purchasing, they want to go out and find information themselves rather than just receiving it.’”
The decline of paid advertising has significant implications for the entertainment, media, and the audience. As marketers shift spending to reflect the way consumer spend their "media time," the dollars that fund professionally produced entertainment on traditional media will decline , resulting in lower quality and less choice.
But there is also opportunity for entertainment owners and traditional advertisers to add value to social media where audiences want to participate.
This isn't a new idea. Think of an NFL football game - where audience participation has always been a part of the entertainment value.
This business model has always been a financial winner. Sports are among the most valuable media properties and brand image-building opportunities. AND they generate other revenue streams from merchandise and other licensed assets that facilitate/encourage fan participation.
Why does entertainment that embraces audience participation thrive? Because the audience wants affiliation. The media/entertainment and advertiser world may be frustrated by the fragmentation of the audience. But think about this from an individual's point of view! If it is hard for you to find individuals aggregated in large scale, think about hard it is for individuals to find others to affiliate with. That's why entertainment thrives when it offers an environment where audiences can participate - not only as individuals, but importantly with others with shared values, interests,and goals.
We call it social entertainment: entertainment that stimulates social interaction. Media where interaction is facilitated, for example live events and "virtual" events, where time and place are not a hurdle.
Live and virtual social interactive media can have a powerful effect when related to traditional mass media and marketing. COMRADITY founder Jim Kern started the trailblazing experiential marketing firm, CREATIVE AIM, named the “That’s Entertainment” firm by PROMO Magazine. The entertainment was designed to engage social interaction with consumers. The “media” was various live “channels” away from home – at work (corporate cafeterias), at school (cafeterias), and at play (concessions). Access to these channels came from his tenure running a premier Contract Food Service Management company. Insights into consumer behavior which once helped to increase food and beverage sales, helped CREATIVE AIM produce entertaining ways to draw audience and engage participation. These uniquely uncluttered environments afforded the possibility to socially interact with the consumer in a non-intrusive fashion. We learned a lot about the power of social interaction with consumers to multiply the results of national PEPSICO brand campaigns. During the national launch of PEPSI ONE, for example, markets where we executed the “workplace initiative” enjoyed a 30% higher market share.
COMRADITY is taking advantage of this learning by applying it to both live and online social interaction and integrating both to sustain results. We offer consulting services and develop social entertainment brands that offer turnkey solutions for content and sponsor partners to capitalize on the compelling combination of peer influence communities with broadcast entertainment.
© 2008 Katherine Warman Kern
