Social media has reached critical mass, with 83% of the Internet population now using it - and more than half doing so on a regular basis - according to new research being released today by Knowledge Networks. But for all the media industry's hype and buzz surrounding social networks, microblogs, and other social networking platforms, the genre has failed to become much of a marketing medium, and in the opinion of the Knowledge Networks' analysts, likely never will. The report, "How People Use Social Media," finds that social media is having a profound impact on the way people connect with each other, but that it's not becoming a very meaningful way for people to connect with brands, or advertising promoting brands.
Among other things, the study finds that less than 5% of social media users regularly turn to these social networks for "guidance on purchase decisions" in any of nine product and/or service categories (see table below), and that only 16% of social media users say they are more likely to buy from companies that advertise on social sites.
Based on the findings, Knowledge Networks categorizes the value of social media advertising "somewhere in the long tail" of marketing options, way below TV ads and personal, word-of-mouth recommendations.
"Obviously, a lot of people are using social media, but they are not explicitly turning to it for marketing purposes, or for finding out what products to buy. It's really about connecting with friends, or connecting with other people," says Dave Tice, vice president and group account director at Knowledge Networks, and the top analyst behind the report. "What we're seeing is that word-of-mouth is still the No. 1 most influential source, followed by TV. The influence of social media isn't at the bottom of the list, but it is somewhere in the long tail of marketing - about the same as print ads, or online [display] ads."
By category, social media's greatest influence so far has been for media-related products and services, especially music, TV programming, movies and books.
In fact, Tice suggests that some forms of social media - especially microblogging service Twitter - actually may be more of a media industry phenomenon then a genuine consumer groundswell. Knowledge Networks research finds that only about 1% of the online population uses Twitter weekly, and he suspects that has been concentrated among the media elite, even as celebrities such as Oprah Winfrey have begun using and promoting it.
"It's more of a media industry thing right now," notes Tice. "Very few people between New York, Los Angeles and San Francisco are using it."
In fact, Knowledge Networks goes so far as to compare Twitter to the hype surrounding digital video recording device TiVo a decade ago. Back then, Tice says, the media industry - especially Madison Avenue - became consumed by the anxiety that TiVo would destroy the television advertising business, because viewers would use the device to zap TV commercials. The reality, he says, was that very few people were subscribing to TiVo, and even thought DVRs have gained some critical mass as they've become embedded and integrated into digital set-top devices, the TV and advertising industries have figured out how to coexist, adopting Nielsen's so-called "C3" ratings, which account for time-shifting and commercial zapping, and TV remains the dominant advertising medium.
"For experienced media people, the hype surrounding Twitter this year is akin to that we saw around TiVo," reads the Knowledge Networks report. "Whereas TiVo dominated the conversation around television, we've seen Twitter dominate conversations around marketing. What is also similar is that both are examples of "flyover blindness": while popular topics among the urban digerati, neither - TiVo then or Twitter now - are significant in terms of usage among the general population across the country.
"In 2000, TiVo was very smart in creating buzz by seeding free units among key opinion shapers and industry leaders in the television and agency worlds. It also coincided with the height of the dot.com bubble that built huge expectations for all things digital, and benefited from evangelistic users. But in reality, by the end of 2000, fewer than 1% of TV homes owned a DVR, and it took until 2006 for ownership to exceed 10% of homes."
While tiny from a consumer penetration point-of-view, Tice acknowledges that Twitter is influencing the industry conversation in a larger-than-life way, and that, in turn, will end up influencing consumer perceptions about the microblogging service, as well as other forms of social media.
"While social media is still a minor part of the media and personal mix that consumers use to make decisions, Twitter and its progeny can certainly greatly influence the way the press covers a product or media property - what gets buzz and what doesn't," the Knowledge Networks report concludes. "Our advice to marketers is, in a tweet-size bite of 140 characters: Twitter is less a way to directly reach customers, and more a way to reach passionate voices who may influence perceptions of your brand."
% of Users Who Turn To Social Media For Purchase Decisions
"Regularly" turn to social media
"Sometimes" turn to social media
Travel or travel services
Banks or financial services
Clothes or shoes
Eating out or restaurants
Personal care products
Cars or trucks
Groceries or food
Prescription or OTC drugs
Source: Knowledge Networks' "How People Use Social Media." Percentage responding to the question: "How often do you refer to social media Web sites or features as a resource for information, reviews, or recommendations when in the market for [category]?" Base: 418 social media users.