Recently, there have been a few conflicting reports about the current popularity of social networks here in the U.S. On one hand, you have reports that point toward the growth of social networks and their continuing crossover into mainstream use. On the other hand, recently released stats on visitor data show that these networks are maturing and plateauing. So, what's really going on here?
Today on GigaOm, Om Malik reports on some of the new numbers coming in for social networks here in the U.S., specifically new comScore data which shows that the two biggest networks - MySpace and Facebook - are beginning to plateau in their growth.
Additionally, he points to an eMarketer article where they've lowered their 2008 advertising estimates from $1.6 billion to $1.43 billion. By looking at these numbers, Malik concludes that social networking is in for "tough times going forward." But is that really the case?
On the flip side, a completely different, and more positive, report on social networking was also released today. The report is called "The Consumer Internet Barometer" and is produced by The Conference Board, a global business research and membership organization, and TNS, a world leader in market insight and information who surveys 10,000 households across the country and tracks who's doing what on the Internet.
Interestingly, their report doesn't mention a decline or plateau at all. Instead, it concludes that what was once only a niche activity is now a growing trend that has more people joining every day. According to the report, one out of every four people visit social networking sites, and half of those that do, do so on a daily basis. The trend is so prevalent, says Lynn Franco, Director of The Conference Board Consumer Research Center, that it's going to extend beyond just personal use. "The next growth wave will be expanding and incorporating these networks into our business lives," she claims.
While this report doesn't look at traffic stats and advertising projections, it is looking at market penetration, and in doing so, paints a much rosier picture than the worrisome plateau in the chart above.
Perhaps social networking is reaching a saturation point as it matures, but that's not to say that it's all doom-and-gloom. Many people are still joining social networks, and, with each new generation, social networking will become even more of a part of life than it was for the generation prior. Whether MySpace and Facebook will always be the hot properties that they are today is yet to be seen, but the rise of new sites like Twitter, for example, shows that there's still potential for new social networks to rise up and gain mainstream appeal.
If anything, the sheer number of users on these networks today prove that social networking has earned its place in today's mix of new media. Don Ryan, Vice President, Technology and Media, TNS, agrees, saying, "as social networking becomes a staple in people's media experience, brands will place it alongside print, TV and search as a main advertising vehicle." Hmmm..maybe a saturation point isn't really such a bad thing after all?
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The chart only shows unique visitors per month. To judge wether or not it is on the decline I would like to see daily numbers for unique visitors, or just the overall number of visits per month, heck I'll even take the amount of bandwidth used for the month. A year or two ago people would visit MySpace or Facebook on a daily basis. Now they may visit a couple times a month. Using the graph shown, it wouldn't matter if you visited 30 times in a month or just once, it'll appear the same so people would be led to believe that there isn't a decline. Before I deleted my myspace page I think I would still visit at least once per month.
Posted by: Jason | June 13, 2008 1:58 PM
TNS research is so tilted in hyping anything related to media and advertising growth, that you cant take them seriously. TNS may be acceptable for narrowly contracted studies to measure particular campaigns, but their general research, particularly all things social media and internet, is suspect.
The company purchased Cymphony in 2007, a CGM metrics tools and monitoring startup that had weak knees under from the git go. They have made numerous noises since the acquisition to fluff the case for contracting their reputation and brand monitoring services based on that ill-fated buy.
Posted by: Alan Wilensky | June 13, 2008 1:59 PM
From a monetary standpoint, social networks are always going to have challenges when it comes to the monetization side (despite whatever rosy picture TNS paints.) From a marketers perspective, their value isn't so much in traditional big $$$ advertising, it's in smaller, targeted PR initiatives. It can be a very cost-effective platform for marketers, but it's nowhere near as profitable from the publisher's standpoint as more traditional content-driven sites.
From a user's growth perspective, I think broader social networking fatigue may be beginning to show a little bit for the first time (geeks like us have already gone through it numerous times before.) Yet another reason why I'm finally warming up to the idea of an Open Social platform.
Posted by: RS | June 13, 2008 2:53 PM
RS said...
From a user's growth perspective, I think broader social networking fatigue may be beginning to show...
I totally agree here. I believe that Social Networking is going to decline over time. This is based on a fact that Social Networking offers zero value to users. Sure users (suckers) might feel important or feel cool to connect up with their friends (suckers), which is totally unnecessary via a social network which they can brag about to their parents or their other sane friends who haven't joined them yet.
The winner in social networkings are the marketers and the losers (suckers, naive, etc,...) are the users/members of those sites. It gives marketers something useful that could be translated into monetary gain, while suckers are not aware (perhaps not fully) that their being member of such a site alone (which lead to an unproductive use of their time) someone (marketers) is exploiting their naivety for a maximum gain. What users gain? Nothing really. Just perhaps gain an exaggerated sense of self-importance, which is equivalent to completely useless.
Facebook or other social networking sites are not like productive tools as Google. If there is no Google (or similar services), my productivity, will drop to about 10%. My life and millions of others solely depended on Google's services in order to be very productive. I search research papers on Google in minutes, which prior to that, I used to go to my local University's library and sit for half-a-day (sometimes 3 times a week), going thru book shelves and try to scan each journal/book and every article to find out which one that is relevant to my work in software development.
See, this is a fact that I will be always hooked to Google type services because I can't live without it. On the other hand, social networking sites, no one is dependent on it for their economic/productive survival. If they disappear today, no one is going to suffer because they're useless, except perhaps the marketers themselves would be the losers.
Social networking is one of those passing fad, and this fact is linked directly to human psyche. We explore things that looks cool, irrelevant if they're useful or not. When the next thing comes, we move on. But we get stuck with things that give us productivity in our daily life, ala Google and the likes. Tools or things that has zero value for productivity such as Facebook, will disappear as soon the new fad arrives. This is how the brain works and people are unaware of this fact, since it is buried deep in our subconscious mind however it manifests itself in human herding behavior, ie, the crowd move with the current perceived direction. When the old way (previous direction) is dished, then crowd find a new direction and all herd that way.
The faster social networking sites disappear from the face of the earth, the better. Humanity & civilization can finally reclaim its sanity.
Posted by: Falafulu Fisi | June 13, 2008 4:32 PM
Social networking, more often than not is slowly turning into a webmaster promotion ground. MySpace, FaceBook, and even sites like Digg and StumbleUpon, which are not exactly Social Networking as such are victims to increasing abuse from marketers and webmasters alike.
It's a good way for bored people though. I know of friends who spend hours every week checking out new profiles and trying to get hooked up with people.
The big question however, is - will advertisers pay for such losers? Advertising gets paid off when people who are looking for stuff that they sell, connect. If you're increasing on the "marketeer" or "surfer" category, then getting real people - you're falling into a death trap.
Just food for thought.
Posted by: Roy Sanders | June 13, 2008 11:33 PM
Stats are often misleading. I am 29 and don't really need to look at the stats to see that social network use is declining.
Just by observing what is happening with my myspace friends I can tell that it will soon take a nose dive as far as use as a social network.
Fortunately for social networks, apps will keep them afloat until the next big thing comes by.
The collective population of internet users is like a little baby, one day they may have a favorite rattle, 2 weeks later they may forget about it and go on to something else, never to play with the rattle again.
Posted by: Personal Trainer | June 14, 2008 12:02 AM
These are US only figures. The worlds your oyster!
Posted by: DC Crowley | June 14, 2008 1:19 AM
Right, I would say that while MySpace, Facebook, Bebo, etc may have reached or are reaching their saturation point among social users, other networks like Twitter, Biznik, Ning.com, etc are just really getting started.
And with the wave of startups and small businesses jumping on the boat, we'll probably see the numbers steadily climb again all around.
Posted by: Tia | June 14, 2008 8:29 AM
Social Networking IS a growing trend. However, Myspace and Facebook are simply jumping off points that get people's feet wet. As RS said, sites like these (I disagree that this is true of all Social Networking sites.) "offer zero value to users."
But once someone has started in on Facebook, they'll soon start looking around for other venues that offer the same ability to connect, but that have a far better infrastructure for interaction. At that point, sites like Multiply.com are going to take off (something that's already beginning to happen, in fact).
The sites that are going to still be standing after a Social Networking shakedown are those that are easy to use, are customizable, have a lot of offer (for both grandma's and teens alike as well as everyone in between), and have superb privacy controls. Neither Myspace nor Facebook qualify. But there are other social networks that do. And it's just a matter of time before the herds start migrating en masse to these more functional sites.
Posted by: barefootmeg | June 14, 2008 10:13 AM
With so many social networks out there now, it's difficult finding one related to your subject of interest or marketing niche. I find Google to be inefficient as it returns too many irrelevant results. The best resource I have come across to find niche social networks is the search engine http://findasocialnetwork.com
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Don't read any slackening in interest in Facebook or MySpace as the party being over for social networking though. Whereas these two have opened up our eyes to social networking, the next wave is more focused sites appealing to specific needs or interest groups. These offer much more relevance for users and a richer bounty for advertisers who, of course, fund all this useful stuff so we don't have to.
Interest in our UK-based business lead and referral network at http://www.wecando.biz is increasing massively as word gets out there. We already have people importing their business contacts from other sites -- and the biggest social graph anyone has, which is their e-mail address book.
There is lots of life in social networking, especially as it becomes more useful to solving specific needs.
Posted by: Ian Hendry | June 18, 2008 1:23 AM