Social Networking is more popular than emailing! What does that mean?

[Alex Snyder]

According to Nielsen, more time is spent on Social Networking sites than is spent reading or sending emails. In their latest study, this equates to one out of every six minutes of the average web user's time is spent on sites like FaceBook, MySpace, or Twitter...or Dealer Refresh (and other blogging sites). Social Networking is growing at twice the pace of other major online activities such as using a search engine, researching a car purchase, or just sending an email.

To put social media into the simplest of definitions, think of it as a place where people can converse with other people on the Internet.

Take a look at Nielsen's survey. Of note is page 7 where they address the problems in advertising within a "conversation".

It will take time to work out the magic formula for successfully advertising in social networks.  The diversity and personalised nature of the environment means standard ad models - such as contextual search and standard unit sizes - won't cut it. Different approaches across ad units and ad inventory will have to be tried, involving a trial and error mindset.

As advertisers, do we join the conversation or interrupt it?

Nielsen also points out that:

Social media has fanned the flames of consumer distrust about advertisers claims.

If you are familiar with an eBay and M3 incident from a few months ago, you already know the power of Social Media on an advertiser's reputation (notice what's indexed in that search link). Knowing you cannot control every little thing that may or may not be done by one of your employees, how can you combat these medias when they're not working for you? How do you stop the Flogging?

Social Media brings up two major problems for advertisers:

1. How do you advertise on it?
   
2. How do you keep your reputation clean in it?

Imagine a customer sitting in your finance department with his iPhone. He loved everything about your sales person, loves the deal on the car, and is on Twitter describing the whole process to his 100+ followers - great! Then your F&I Manager says "if you buy this warranty, I'll lower your rate by 2 percentage points." Guess what was just Tweeted to over 100 people...who may Tweet that to their own followers. What was a great time, has now become a single 140 character sentence on Twitter that just ruined your reputation with a bunch of people...and you have no idea!

I'm not trying to scare you with this, but I am trying to grab your attention. On the positive side, you can specialize in a particular social media network/site and gain a serious following of consumers who won't even think of doing business anywhere else. You just have to do it right, and join the conversation.

 

[Justin Duff]

I read this post because I saw it on twitter. I'd say social networking plays a big role

Dealers who embrace social networking sooner than later will reap the benefits. It's going to be a "learn as we go" approach this time around. Advertising with banners or paid ads on social networks will be the Google Adwords of this current time period. I think dealers are more willing to try different internet strategies this time around. It will be interesting to see how this all plays out.

 

[corey salzano]

not sure why you consider blogs to be social networks, i didn't see that in the nielsen paper. also twitters are 140 characters.

 

[Gerald]

It seems the immediate impact of social networking for dealerships will be initially the negative impacts, to wit, the M3 incident last summer, and slowly, I think more and more good use (i.e., more sales) will be realized from the power of social networking.

Nothing wrong with it, that just seems to be how we embrace things.

 

[Alex Snyder (blog)]

Corey Salzano - I just wanted to let you know how much I appreciate your comments since you came to DealerRefresh. They are by far and away the most value-adding, debate-inspiring, industry-improving comments I've ever seen! Keep up the great work!

Gerald - yep, you're probably right.

 

[Roland (blog)]

I think the challenge of harnessing the power of social networking could be to approach the question differently.

By looking for "new" friends and followers, we overlook the goldmine of "friends" we already have: website visitors.

If our website already has two or three-thousand visitors a month to their website, wouldn't that be a great place to start? Haven't they already initiated the social conversation? They’re already interested in your store, are considering buying from you – this is where the attention should go, at least initially.

The answer to the social networking question could be in your own backyard.

 

[Alex Snyder (blog)]

Roland - I like your thinking!

 

[matkoenig]

Alex,

Great article. I would say that I agree with Roland as well. In the same way dealerships overlook their current customer base from sales and service with thousands of opportunities and put all of their focus into finding "new friends" to sell vehicles to.

The question I struggle with when it comes to advertising on social networking sites is how will the consumer really respond to those of us in the car business.

If we're 'friend requesting' people so we can email market them on Facebook or MySpace we are technically taking an 'interruption advertising' approach. Similar to putting an automotive Ad in the sports section of a newspaper. When someone opens the sports section they're looking for football info, not a lease on a new Toyota.

I KNOW interruption advertising works but we all know why so many consumers are using the internet: they can get what they want, when they want it. Heck, it's the same reason I only watch TV that I DVR and never watch things live (except the Super Bowl).

I think that there is opportunity to advertise well on Social Networking sites, I just wonder if the time invested sill yield enough result to justify the effort? Will a multitude of advertising turn people off to the more popular social networking sites?

Look at the growth on Facebook once MySpace got overloaded with advertisements. I know that 70% of my peers switched to Facebook after MySpace became ad heavy.

Will our customers leave and do the same?

 

[John O'Connell]

The scary part is some of these dealers are so focused on hanging on and being one of the survivors that when things turn and they will. The dealerships that have not embraced the internet and have some sort of understanding of a BDC never mind social networks will be the first to fail unfortunately.

 

[Chris K]

Dealerships will survive without ever buying into this hype and trend that will last how long... before the next web gimmick is invented?

There are people like me, lots of them, that believe "not documenting every second of our lives online" is actually a healthy thing to do.

Right now as I write 40,000 cars a day pass by us, our radio ads dominate the airwaves, Nissan has great ads all over the radio, tv and internet...

And to say if we don't Twitter, or don't get a Myspace or Facebook account we'll quickly sink to the bottom is quite absurd and a narrow minded vision of the big picture.

Maybe if people shut off the tv, put down their pda's, smartphones, iphones and such they'd realize the world works well and exists brilliantly without their technology.