Social Networks for Everyone!! Blog

In a recession, advertising will plummet and experimental media will crater. (In the 2001 recession, US advertising dropped 9% and Internet advertising plummeted 27%, according to Veronis Suhler Stevenson.)

But do not panic. Things are different this time.

Here’s what smart marketers should know:

• It’s not a tech bubble. The last recession was caused by the dot-com bubble and the terrorist attacks. There was a lot of ignorant money out there chasing illusory opportunity, and companies had overinvested in technology. This time, the precipitating event is a housing bubble, and technology spending is not irrational.

• Awareness ads will lose effectiveness. Advertising (or as we often call it, “shouting”) is mostly about generating awareness and reinforcing brands. In a recession, ordinary consumers like you and me aren’t as willing to spend. Sure, we’ll be aware of the product, but that doesn’t make so much difference when you’re worried about your future. Advertising is expensive and is a lot easier to cut than headcount. Many are predicting ad spending will hold up; I’m not so sure.

• But social applications are about consideration, not awareness. Blogs, word of mouth, social networks . . . they’re about people connecting with other people. You may resist advertising if your finances are tight, but if your bud tells you that new movie is really worth seeing or that the Gap has the cutest new tops, that’s more persuasive than advertising. Basically, in a recession, the consideration phase is more important than awareness — and that’s where advertising flops and social applications succeed.

• It’s cheap. Social applications can be cheap (think blogs, rsitez.com, facebook pages) and even more sophisticated communities are typically between $30K to $200K — a lot cheaper than a significant sized ad campaign. One interactive marketer from a highly cyclical company told us this:

“Budgets are tight in light of the economic conditions as you surmise, but [the budget for social applications] has not been impacted. We are still keen to move forward with our trial and have support….at this point anyway.  Interactive in general has been more protected than other comms areas and saw an increase.”

• It’s measurable. Marketers want to spend their budgets in effective channels. If you can generates leads, or conversions, or buzz, or something useful and your Social application offer measurable output. That won’t get cut in a recession.

These same arguments apply to some other forms of online marketing, including search ads and email marketing. As a conclusion, if you are smart and you are looking for opportunities to make money online, social networking applications are going to be good investments in a recession.

rSitez provides you with the technology to create your own Social Networking Site so you can focus in your audience. Find a good niche or audience, position yourself now, proof that your that social networking site is getting results and collect the fruits.  Because as the ad dollars get tight marketers will be looking for you.