Businesses own their audience through social networks, not traditional paid ads

Business marketing teams are switching from paid ads to social networking advertising in 2010 to gain more control because… well, they can.

Marketers shelled out more than $1.2 billion on social networking advertising last year, and that figure will only rise – to $1.3 billion this year – as advertisers aim to leverage their existing social media infrastructure in 2010, according to a new report from eMarketer.

In its social media outlook, the research firm found that advertisers plan to devote their social media resources this year on maintaining their social networks rather than growing them through paid ads. Many marketers made the investments last year in creating fan pages on Facebook, running ads on MySpace and developing the overall strategy for social media, said Debra Williamson, the eMarketer senior analyst who wrote the report. Now, they’ll look to nurture those audiences.

This shift points to a broader philosophical change, as marketers create their own audiences, rather than rent them. Brands want to invest money in building out audiences rather than just renting through TV, radio and magazines (the old way.) Example … Pepsi pulled out of the Super Bowl after 23 years to develop its own audience through its Pepsi Refresh Project online.

Marketers are looking for better ways to quantify and measure social messaging that surrounds their brands is a summary of what Williamson said. “Whenever you do a paid online campaign, you guess or estimate how many impressions you are going to get, and now they are trying to figure out how much earned media they’ll get,” she said.

Marketers are eager to apply metrics to Facebook posts, Twitter comments, viral marketing and others times and areas when and where people share or interact with a brand online, even if it’s as simple as a consumer replying to another consumer with a brand recommendation. A number of firms track and analyze earned media, such as Listen Logic, Converseon and Networked Insights.

Brands also want to understand how social media effects the rest of a marketing plan.

“They’re realizing you don’t have to track every single metric, but you should track the ones that make sense for your business,” Williamson said. “If you want to use social network marketing for branding, then you’re going to follow different metrics in terms of whether they are looking at your fan page or passing along to friends. But if you’re looking to do a promotion, such as downloading a coupon and getting a discount at a store, then the metrics are getting better to understand that, too.”

When marketers do spend money on social media this year, they’ll be opening their wallets for Facebook with its 350 million worldwide users. Facebook spending in the United States will jump to $450 million this year, up 34% from $335 million last year.

Meanwhile, MySpace ad spending will drop 23% to $360 million this year from $465 million last year, coinciding with traffic ups and downs.

Traffic ups and downs is referring to the traffic, for example, on MySpace.

Other key social media trends this year will be local social advertising and social search, Williamson said.

Facebook’s ad serving engine will continue to draw local businesses using location-based advertising, she said. Also, advertisers will look to pair social media with search through Google’s new real-time search results. As Google curates tweets, blog posts and some Facebook status updates in its search results, that can lead to new opportunities for social-based search advertising, Williamson concludes.

This story was first published on Techistan by Suzanne  Bowen, VP Marketing, Super Technologies, Inc., www.DIDX.net, www.techistan.com