CorpComms Magazine

If 2006 was the year the blog finally came of age, it also saw the riotous blossoming of what promises to be an even more explosive internet phenomenon: user-generated content web sites.

Witness the dizzying rise in 2006 of Sheffield-based band the Arctic Monkeys, who got signed and topped the UK album charts just months after their MySpace web page, featuring some of their songs, received an astonishing number of hits.

If that got feet tapping in the music world, the financial community was also dancing to this new tune. Google had to shell out almost £1 bn when it bought home video-sharing site YouTube last October, sending shockwaves through financial markets.

Rupert Murdoch, of course, had seen it coming. His News Corporation was heavily criticised for paying over the odds when it bought internet platform MySpace for £330 mn in the summer of 2005. Now he looks to have snapped up a bargain.

Another internet boom is taking place and, unlike 1998, when no-one quite knew how to make money out of the cyberspace phenomenon, this one has the advertisers salivating. Even media regulator Ofcom concedes that teenagers now spend more time at home online than they do watching television.

The corporate angle

The question is what it means for corporate communications and marketing professionals. In theory, highly street-credible social networks such as YouTube and MySpace offer huge opportunities for large corporations to communicate to the next generation and attract their spending power. In practice, however, while there have been rewards for the brave, many blue-chip companies are still watching from the sidelines, worried about embarrassing themselves or damaging their carefully weaned corporate brands.

'Big corporations see social networks as a particularly good medium to advertise in,' says Penny Power, co-founder of social network web site group Ecademy. 'You can place a banner advert there and get a lot of clicks, but there's a lot more you can do with social networks than just advertise on them. If these companies had social network directors who joined some of these networks and really listened to the heavy drumbeats of what's going on and how people are feeling about some of these brands, they could gain a really good understanding of how they are perceived. 'The problem is that corporates tend to be very nervous about being bombarded with spam if they join these networks because everyone always wants to sell to them.'

Taking the plunge

Some early movers have taken the risk, however, in order to gain a foothold in the new age of what is being termed Web 2.0. This is the a new online age of participation and democratisation, where anyone can create his or her own 'user-generated content' - be it text, music, speech, pictures or video - and upload it to web sites where they can share it with others.

The driving force behind social networking is the proliferation of broadband: high-speed internet access that is on all the time, allows users to open web pages swiftly and download music and video without the world wide wait. With over half the UK population now enjoying broadband at home, it is easy for organisations of all sizes to reach them, as well as the wider global audience. Corporations understandably want to use this new media.

According to market research group PQ Media, the total spend on global social media is forecast to grow at an annual rate of 106 percent from 2005 to 2010, when it should reach an impressive $757 mn.

'Brand marketers are accelerating the shift of media dollars away from conventional to newer media using digital technology to reach youth and influential demographics,' explains PQ president Patrick Quinn.

Joel Cere, head of Hill & Knowlton's networked communication practice for Europe, Middle East and Africa, adds: 'In a nutshell, companies are already on MySpace, setting up products or brand pages for promotional activities. You only have to look at www.myspace. com/aquafina to see how bottled water firm Aquafina is getting involved with independent film companies to see what it is doing on these sites.'

Joining forces

Many people predicted a huge backlash from MySpace users but it has not happened yet. The key is transparency - it needs to be stated from the outset when fake characters are fake and when a promotion is a promotion. 'When this is done, such promotions are usually quite successful because of their entertainment value,' says Cere. 'It's the same for YouTube - for example, the Dove soap viral clip about its campaign for real beauty. Nearly 1 mn people viewed that. It led to huge brand awareness for Dove and boosted its positive brand associations with young people.'

There are other examples, too. Accountants Ernst & Young and Microsoft are using Facebook, a web site popular with students, to recruit talented young graduates at a fraction of the cost they would have to spend recr uit ing through convent ional channels. And Lloyds TSB targeted the UK's Muslim community with a viral campaign across traditional and digital media that encouraged readers of online and offline Muslim lifestyle magazine emel to fill in blank postcards and submit them to an online gallery.

'By providing a platform for the Muslim community to share opinions and thoughts, we're supporting an engaging dialogue,' says Claire Gault, a senior strategy manager at Lloyds TSB. 'This project underscores our commitment to understanding our customers better and providing tailored products and services.'

Ecademy has linked with recruitment agency Zubka, which offers Ecademy members commission when they successfully recommend friends for positions it is seeking to fill. Property company MWB Business Exchange offers discounted office space on the same internet social network. Ymogen, the mobile web and engagement specialist, is heavily involved with brands including Mercedes-Benz, the Guardian, Big Brother TV producer Endemol and charity Save the Children.

'Companies are increasingly using YouTube to get their message across,' notes Rassami Hok Ljungberg, who runs communications consultancy Rassami. 'The BBC is in talks with YouTube and Google to put its content out on YouTube. CNN is using YouTube, and Pepsi and Coca-Cola have used internet platforms to complement product launches.'

Dangerous liaisons

Power, however, is not convinced corporations always know what they are taking on. For example, social networks that are not carefully vetted can potentially harm corporate brands by spreading criticism of them. If such web postings are indexed to Google searches, as is often the case, the effect can be the worst kind of viral marketing.

Ecademy guards against this with a policy that doesn't allow its 120,000 members in 80 countries to criticise each other. Members also have the option of pressing a 'complaints' button on the web site, which brings the matter to the attention of company officials. 'I think corporates have to really examine the ethics of the social networks they are getting involved in,' says Power.

There's also the danger of not being in touch with the customer bases that social networks reach. 'Most communication professionals are clueless when it comes to MySpace or YouTube,' notes Cere. 'They think with an advertising hat and forget why people are there in the first place. And guess what? It's not to watch commercials or read press releases. The benefit of getting involved with social networks is that this is mainstream media for Generation Y. It's a low-cost, high-exposure media.

'You can build deeper relationship with consumers if you are prepared to engage with them over a period of time. There can be pitfalls, however, if you are not prepared to listen to what consumers say, or you try pushing overly commercial messages. My advice would be to work with experienced MySpace/YouTube users from your target age group to get it right.'

The good news for corporations is that social networking is not simply restricted to web sites frequented by the young. According to comScore, 68 percent of the 55 mn MySpace users are 25 and older.

'The average age of our members is 46, which really demonstrates the benefits to companies of social networks,' says Power. 'Some have grown on the back of being very viral and tool-based. Adults are likely to tell their best friends of their online experiences although they don't span the web like teenagers do. We have 2,500 groups of social network users and they range from communications workers to corporate trainers, property agents and those who train sales personnel.'

New frontiers

Jolyon Barker, head of the technology practice at business advisers Deloitte, agrees the appeal of social networks is growing well beyond the teenagers who popularised them. 'Social networking's appeal has so far been strongest among younger demographic groups,' he says. 'In 2007, however, social networking companies will look to extend their appeal as they seek further potential revenues. Older age groups could prove to be a lucrative opportunity for online social networks as these groups would be far more willing to pay for privacy, which would encourage more people to share their uninhibited moments with their intimate circle, avoiding prospective employers or existing peers.'

But Power warns that engaging successfully with social networks involves building emotional connections and a real sense of community. 'Tools are just fads; communities and friendships evolve,' she explains. 'Being a name on a contact list is no different from being a business card in a Rolodex. Knowing who you can learn from is what matters here - and what social networks should be about.'

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