While online social networks have dramatically grown in popularity during the past year, users see them as means of interaction rather than conducting commerce. The most recent Consumer Internet Barometer report from The Conference Board supports retailers’ general usage of social networking sites for promotions and communication, rather than direct e-commerce sales.
According to the report, 43% of Internet users participate in social networking sites such as Facebook, Twitter and MySpace. This is a 16-percentage point jump from the 27% of users participating in social networking sites a year ago. Online social networking participation has especially grown among users ages 55 and up. Last year, only 6% of Internet users in this age group participated in online social networking, compared to 19% this year. Participation is higher among female users than male users, with a 48% to 38% differential.
Facebook is by far the most popular social networking site, used by 78% of online social networkers. Following are MySpace, with 42% usage, LinkedIn, with 17% usage, and Twitter, with 10% usage.
However, despite the growing popularity of online social networks, most consumers still do not see them as a commerce channel. For example, members of Twitter say their top reasons for "tweeting" are to connect with friends (42%), update their status (29%) look for news (26%), and for work-related reasons (22%). In one good piece of news for retailers, when users were asked whom they would like more access/interaction with, 15% say celebrities, but 14% say their favorite company and 13% say service providers. An April 2009 report from Harris Interactive generated similar results in terms of online social networking usage.
Social networking sites are becoming increasingly popular with retailers. In the retail vertical, companies such as Aeropostale, Papa John’s and Sears are using Facebook to promote special offers and contests, but not to directly conduct e-commerce. Similarly, retailers including Kmart, Pizza Hut and Wal-Mart use Twitter for promotional and interactive purposes that fall short of executing transactions.
In addition, a number of retailers are using web-based social networking tools to directly involve customers in their marketing efforts by offering customers rewards for activities such as creating videos of themselves using a particular product.
In the past month, Amazon, Quiznos, Dunkin’ Donuts and Starbucks have all launched contests inviting consumers to create promotional photos and/or videos of themselves. The contests have all included voting by fellow consumers, and most have tied in some way to major social networking sites such as Facebook, Twitter, YouTube and MySpace.
Last week, two more large chain retailers joined the trend of offering customers the chance to participate in a “do-it-yourself” marketing campaign. Broadline closeout retailer Big Lots launched the second phase of a video contest called Lots2Give, and fast food chicken retailer KFC initiated a search for a customer to represent its new Kentucky Grilled Chicken product line.
One exception to the general retail online social networking trend is CPG company Nestle, who is directly integrating consumer Twitter postings into online advertising for certain products.
The Consumer Internet Barometer is based on a quarterly survey of 10,000 households. A unique sample is surveyed each quarter. Data is weighted as well to reflect the latest U.S. household demographic information. The latest survey was conducted during the Q2 2009.
