The document discusses consumer attitudes toward advertising on social networks based on an IDC survey. It finds that (1) consumers are more annoyed by ads on social networks than other parts of the internet, especially disruptive ad formats, (2) though social network users click on ads more than non-users, they click less frequently on social networks themselves, and (3) consumers are more open to relevant, personalized ads if they control what data is collected and how it is used. The document provides guidance for advertisers to focus on relevance and usability over control of messages on social media.

1. Consumer Attitudes About Advertising
and the Implications for Advertising on
Social Networks
Caroline Dangson
Research Analyst
Social Media
IDC
Copyright 2008 IDC. Reproduction is forbidden unless authorized. All rights reserved.

2. Is Advertising Failing on the Internet?
No, advertising will remain
important business model,
but it must evolve
Consumers expect content
to be free online
IDC survey shows that
consumers hate paying for
content more than they do
Source: TechCrunch, March 22, 2009
advertising
Clemons argues that consumers do not trust
This calls for innovation –
advertising, consumers do not want to view
advertisers AND publishers
must rethink online ad advertising, and consumers do not need
strategy advertising.
Publishers must employ a IDC argues that people remember experiences
mix of models that are personally relevant to them - that’s
what advertisers should be aiming to provide.
© 2008 IDC Jul-09 2

3. IDC Primary Research Data Measuring
Consumer Attitudes About Advertising
© 2008 IDC Jul-09 3

4. Consumers Actually Like Ads
Q. How much do you like advertising in general, no matter where you see it?
24.9%
Like Advertising
42.3%
Neutral
Dislike
Advertising
32.8%
Source: IDC, U.S. Consumer Online Attitudes Survey Results, Part I: Advertising Tolerance, Doc
#213481, n=3,001
© 2008 IDC Jul-09 4

5. Not All Mediums The Same
Q. How much do you like advertising in each of the following media?
60 Consumers like ads
Magazines on more passive,
50 sit back mediums
Newspapers
Satellite TV 40
Cable TV
30
Broadcast TV
Internet 20
Radio 10
Direct mail ("junk mail")
0
Source: IDC, U.S. Consumer Online Attitudes Survey Results, Part I: Advertising Tolerance, Doc
#213481, n=3,001
© 2008 IDC Jul-09 5

6. Not All Formats The Same
Q. How much do you like each of the following kinds of online advertising?
Pop-up ads
Are Annoying
Interstitials
Are Useful
Video ads
Like Them
Sponsorship and Rollover ads
search are useful
Email ads
Pop-up ads, Online game ads
interstitials and video
ads are annoying Search ads and text ads
Advertisers should Display ads
avoid disrupting the
Sponsorship logos
experience
0 10 20 30 40 50 60 70 80 90
Source: IDC, U.S. Consumer Online Attitudes Survey Results, Part I: Advertising Tolerance,
Doc #213481, n=3,001
© 2008 IDC Jul-09 6

7. Consumers Are More Easily Annoyed
By Online Ads
Find ads online more annoying than useful
More annoyed by ads on social networks than elsewhere on the Internet
Annoyed by ads that disrupt the experience – the online environment is
active, not passive
Read magazines vs. use Internet vs. connect/share on social networks
© 2008 IDC Jul-09 7

8. Consumers Less Receptive to Online
Ads – Advertisers Shifting More $ Here
Budgets increasing for social media (they were $0)
Brand advertisers want to be in all the action on social networks
– but pages offer little premium inventory
Social media is much cheaper than traditional advertising, but
measuring quantifiable success is not as easy and consumers
not reacting as favorably
– 25% NEDMA direct marketers who run social media campaigns
have a strategy for calculating ROI
– Possibilities are almost paralyzing – where to begin, what data to
collect, how to analyze the data
© 2008 IDC Jul-09 8

9. All Eyes on Social Networking Services
(SNS)
Percentage of Online Americans Regularly
SNS users spend an Using SNS Today
average of 30 more 100%
minutes online each
day than non SNS 80%
users
60%
More than half of SNS
users age 13 to 24 use 40%
SNS at least once a
day or more 20%
38% are spending 0%
more than one hour 13-17 18-24 25-34 35-44 45-54 55-64 65
each session
Source: IDC U.S. Consumer Online Behavior Survey Results 2008, n=3092, U.S. Consumer Online
Attitudes Survey, IDC 2008. n=3001
© 2008 IDC Jul-09 9

10. Boomers Joining: SNS Is Not Just A Teen
Hang Out; Motivations for Using Differ
Growth of Online Americans Regularly
Using SNS in 2008
SNS usage in 100%
the U.S. grew June
6% from June 80%
December
2008 to Dec.
2008 60%
New growth in 40%
U.S. is from
consumers 20%
aged 35 and
older
0%
13-17 18-24 25-34 35-44 45-54 55-64 65+
Source: IDC U.S. Consumer Online Attitudes Survey 2008 (n=3001), U.S. Consumer Online Behavior
Survey Results 2008 (n=3092)
© 2008 IDC Jul-09 10

11. Traffic is Huge, But Advertising Spend
is Not
60% U.S. online consumers age
13 and older use SNS
Advertising is not paying the bills
U.S. advertisers will spend $1.3 B
in 2009 to $3.1 B in 2013
Concerns about brand safety
Poor quality inventory
IDC survey shows that ads on
SNS are not as effective as
advertising online at large
Sources: IDC U.S. Consumer Online Behavior Survey Results 2008, n=3092, Worldwide and U.S. Internet
Advertising 2009–2013 Forecast and Analysis (forthcoming)
© 2008 IDC Jul-09 11

12. Perception of Advertising on SNS
Dislike
SNS users more tolerant of
advertising in general
73% prefer free online
content with advertising Neutral
over paying for content
without advertising
18% Like
Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3001
© 2008 IDC Jul-09 12

13. Little Ad Relevancy on SNS
Q: How useful (relevant to you, informative)
do you think advertising is on SNS?
Only 1 out of 4 consumers (n=1619)
27%
find ads on SNS useful
51% find SNS ads 40%
annoying – still this is less
than mobile (66%) and
video ads (67%)
Creating ads for SNS that
are relevant, less annoying
33%
to users is your biggest
challenge
Useful
Neither useful nor not useful
Not useful
Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3001
© 2008 IDC Jul-09 13

14. SNS Users Click on Ads –
Just Not As Frequently On SNS
Q: How often do you think you click on an advertisement
online? on SNS? (n=1619 SNS Users)
Ads on SNS 57%
17%
All online
79%
ads
20%
0% 20% 40% 60% 80% 100%
Source: U.S. Consumer Online Attitudes Survey, IDC 2008. N=3001.
Percentage of users who clicked on an ad at least once in the past year.
© 2008 IDC Jul-09 14

15. SNS Users Are More Active Click to
Purchase Than Non-Users
Q: In the past 12 months, have you ever
More SNS users than
purchased a product or service as a result
nonusers report 100% of clicking on an online ad?
clicking 80%
74%
to purchase 80%
60%
SNS users are more
active online 40%
26%
purchasers 20%
20%
But getting them to 0%
click on SNS ad is YES (click to purchase) NO (click to purchase)
more difficult
Users Nonusers
Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3001
© 2008 IDC Jul-09 15

16. But SNS Users Are Not As Active Click
to Purchase on SNS
Q: In the past 12 months, have you ever purchased a
product or service as a result of clicking on an
online ad? General Web vs. SNS site
SNS 11%
Web In
23%
General
0% 5% 10% 15% 20% 25%
(95% confidence interval, 3% margin of error)
Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3001
© 2008 IDC Jul-09 16

17. Consumers Are on SNS To Connect
To keep in touch with friends
To communicate with friends
To share media with friends
Virtual social event
© 2008 IDC Jul-09 17

18. Behavioral Targeting Promises Increased
Relevancy, But Consumers Against It
Q: Would you consider allowing Web sites to collect personal info about you in
return for ads that fit your purchase intents?
3%
38%
59%
Yes - without reservation
I would consider it under certain circumstances
No - not under any circumstances
Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3001
© 2008 IDC Jul-09 18

19. SNS is a Goldmine of Rich Personal
Data, But Consumers Want Privacy
Q: Under which circumstances would you consider letting Web sites collect
personal information about you? Check all that apply. (N=1239, those who
would allow it without reservation and those under certain circumstances)
I choose how much info. to give away 67%
Service collects info. only if I opt-in 66%
Service allows me opt out 61%
Notified in Terms of Service 41%
Service sends me email notification 34%
Informs me with a pop-up window 23%
0% 20% 40% 60% 80% 100%
Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3001
© 2008 IDC Jul-09 19

20. Are You Invited to the Party?
© 2008 IDC Jul-09 20

21. Some Consumers Open to Sharing
Info About Themselves, But Not Others
Q: What kind of personal information would you allow Web sites to collect about
you provided it could not be connected to you as an individual? (N=1239)
Internet surfing
50% who had some or no behavior
55%
reservations will share as
long as info not connected to Demographic
48%
info
their personal identity
Online
Most respondents will not purchasing 46%
share info on who they know behavior
Enable your customers to Info on who I
8%
know
speak for you – tap into word
of mouth None of the
13%
above
0% 20% 40% 60% 80% 100%
Source: U.S. Consumer Online Attitudes Survey, IDC 2008. n=3001
© 2008 IDC Jul-09 21

22. Facebook Revolts
Nearly 2.7 million
members of this
group alone
Ambiguous language
about what data
Facebook owns
Consumers starting
to realize the value of
their profile data for
Facebook’s business
© 2008 IDC Jul-09 22

23. But the Reality…
Millions are opting to share when adding multiple
applications that require them to share personal
information with third parties
© 2008 IDC Jul-09 23

24. Participate By Giving Consumers
Something They Want To Share
Intel teams with Buddy Media to
create InTru 3D application for
Facebook
Goal: Generate awareness of Intel’s
new cinematic 3D technology
Create personal avatar
Play a game
Earn points to upgrade creature
Invite friends to participate (share the
message)
Godiva teams with AdNectar to
sponsor a branded virtual gift for
Facebook & MySpace members
Goal: Drive engagement and purchase
intent (it worked)
Those exposed to virtual chocolate gift were 20% more
likely to purchase a real box of Godiva in the next 6
months compared to the control group with no exposure
© 2008 IDC Jul-09 24

25. Offer Coupons
Q: In the past 12 months, when you were using the Internet for personal reasons (i. e., not for
work or school), in which of the following ways have you used the Internet? Please check all that
apply.
70%
47% online
60%
participated in
online contests 50%
or 40%
sweepstakes
30%
31% used
online coupons 20%
10%
Contests
0%
Coupons
13-17 18-24 25-34 35-44 45-54 55-64 65+
Source: IDC U. S. Consumer Online Behavior Survey Results 2008, n=3092
© 2008 IDC Jul-09 25

26. Case Study: @DellOutlet
Started Spring of 2007
500,000+ followers who opt-
in for updates (leads)
ROI = $1 million in direct sales 12/08
Followers RT @DellOutlet
Tweets
– Special discounts –
coupons with code
– Follower feedback
1-2 general tweets/week
Lots of conversation
Uses applications to target
geographies and connect
with outlet specials to
increase demand
© 2008 IDC Jul-09 26

27. Customers Using Social Media To
Talk about Your Brand
Frustrated with product
or service Seeking to control the
message
Use social media to
speak out Spending money on
customer support,
Comments get to but still losing
bloggers - influence customers
social network
© 2008 IDC Jul-09 27

28. Organization Learns to Participate in
the Conversation and Shape It
Comment Listen
Connect Support
Share Engage
Collaborate Empower
© 2008 IDC Jul-09 28

29. Social Media Gives You Voice, Not
Control
Social media empowers
consumers – they will complain
on SNS not matter what
The power to control
messages about your brand
are diminishing
Be prepared to be compared
to other companies who are
not even direct competitors
Consumers want to be heard
- show them that you are
listening
Turn a complaint into a
message of appreciation
© 2008 IDC Jul-09 29

30. Essential Guidance
You do not control the message on social
media, but you can steer it.
© 2008 IDC Jul-09 30

31. The Future Is Personalization
The Internet allows for better targeting.
IDC argues that behavioral targeting is ultimately
good for consumers, but they need the option to
choose what info is collected and how it is used.
Know your customer; deliver relevant messages.
Otherwise, your message will be ignored.
© 2008 IDC Jul-09 31

32. Essential Guidance
Understand the context and sub-context of
interactions on each social media site and
speak the local language.
© 2008 IDC Jul-09 32

33. The Future of Business Is Relationships
Social media is relational. It takes time, patience
and multiple interactions to garner trust.
Source: P Kinski/Peter Spaczynski, June 2006, Flickr
© 2008 IDC Jul-09 33

34. Essential Guidance
You must be social.
You cannot fake it.
© 2008 IDC Jul-09 34

35. Contact us for more information
Caroline Dangson
cdangson@idc.com
http://tinyurl.com/CarolineDangson
© 2008 IDC Jul-09 35