one giant media

First, a little background on Social Media in general.  One Giant Media has been watching trends in Social Media for the past couple years, as it's amazing how it continues to grow past all cynical predictions of it being a "fad" and establish opportunities for explosive growth for companies with a very low barrier to entry.  Anyone can make an app, buy some banners / ad campaigns, or run do-it-yourself facebook or twitter campaigns these days for next to nothing.  This has created somewhat of a mad gold rush to get in on the golden social traffic shower spraying some internet businesses with all the money making users they could ever hope for.  For other companies, though, it's the disappointing swing-and-a-miss.  All in all, though, there has been some stability and predictability thanks to platforms like Facebook structuring ad campaigns and apps in such a way that metrics show to some extent what works and what does not.  But one question remains- how do you make money?  Well, Nielsen has brought more of a definitive bottom line look at the answer to this bazillion dollar question.

Nielsen's report, sparing the details, shows clearly where the money is: it's in people's friends.  Over 800,000 responses to ad campaigns by around 70 agencies show clearly that social network users are 4 times as likely to purchase (conversion) in response to earned media, as compared with purchased media.

What does that mean?  Earned media represents different hooks, whether it be ads, or notifications, or news feed posts, that actually reference the user's friends or interests within the network rather than just a plain advertisement.  Paid media is more of the ladder- the traditional product / brand banner ads and pure "click here to lose weight" type ads.

It's nice to have real figures to reinforce what we've seen for a long time- virality is born in social media from common interests and people's curious nature when it comes to their peers.  Think about it- if you're on facebook, and you see  a shoe ad- are you jumping at the chance to click it?  No, probably not.  Now imagine you receive a message or see something that says basically "Your friend [insert a good friend's name here] wants you to check out their hot new shoes! Click here to see what they got!"  - you're naturally much more likely to click this and even buy these shoes because on a pure logical level, you and you're friend probably like similar things.  More psychology comes into play where people will follow trends, and if you're friend is into something, you are curious to see what it is and are more likely to make similar choices.  This is the essence of why viral marketing can be so explosive and penetrate so deeply into networks of people, and always has been.  Thanks to Nielsen, though, we can say that this kind of traffic is around 4 times as profitable as the other.