The World: Profit from the booming domain of social media

The Web 2.0 landscape represents a massive opportunity, because it relies entirely on advertising support, Tom Smith says.

Cast your mind back to the arrival of Web 2.0 in 2004 and the hype that surrounded it. Everyone was predicting the end of media and advertising as we knew it.

In the event, that hasn't turned out to be true. But to provide some answers amid the flurry of inaccurate predictions, in September 2006 we at Universal McCann implemented a global research tracker across 15 countries and 7,500 internet users.

Its aim was to investigate consumer usage and attitudes towards social platforms such as blogging, social networking, podcasting, RSS, video and photo-sharing. By March 2008, when we conducted our third wave of research, the study was monitoring 29 countries and 17,000 consumers.

The result is the emergence of a wealth of simple, mass-market, social media services, such as social networking, blogging platforms and video-sharing sites, which have massively impacted on the way we use the web. For the first 15 years of the internet, creating content and socialising were the preserve of geeks who knew code or could navigate unprepossessing bulletin boards. Today, anyone can do it.

And smart brands have looked to take advantage. Intel set up a collaborative music page on MySpace; Smirnoff appointed ten brand ambassadors to travel the world, giving them free rein to create and share content. Lenovo, Microsoft and Sun allow their staff to blog freely. UPS invented a widget to share parcel-tracking with customers in their computer space.

The reason why these brands are investing in social media is because consumers are increasingly spending as much time with social media as they are with traditional sources. Among active internet users, social media are beginning to rival TV, print and radio in terms of time spent and frequency of usage. Video-sharing sites and clips are the most frequently viewed, with 71.3 per cent of users visiting at least once a week.

Reading blogs is not far behind, with 51.3 per cent of readers consuming once a week or more. Although clearly there is an issue of fragmentation, social media in general are eroding the time we spend with traditional media.

More importantly - and the rise of user-generated content campaigns is evidence of the way brands have been swift to take advantage - there has been a big shift from passive consumption to active involvement via content creation and sharing.

Penetration of blog-writing has risen from 28 per cent to 39 per cent, while uploading video has climbed to 46.5 per cent from 22 per cent in Wave 2. Uploading photos is now at 52 per cent. The fact that ten hours of video are uploaded every minute to YouTube and that Flickr receives five million photos a day are part of the same phenomenon.

There's another trend that brands will have to take on board if they wish to use these media successfully. Social networks have become broad platforms on which to organise internet experience, with an increasing range of services being adopted.

More than 55 per cent of social network users have uploaded photos to their page, 31 per cent have written a blog inside their social network and 22 per cent have uploaded a video.

Of course, these developments are not uniform and there are clear geographical differences. Asia leads the way in blogging take-up; the top three markets are South Korea on 72 per cent, Taiwan (71 per cent) and China (70 per cent).

This compares with the US, which has a 26 per cent take-up, the UK (25 per cent) and France (32 per cent). Despite an internet penetration of just 15 per cent, China is now the world's biggest market for blogging, with an estimated 42 million bloggers.

In social networking, the leading markets are the Philippines (83 per cent), Hungary (80 per cent), Poland (79 per cent), Mexico (76 per cent) and Brazil (75 per cent). These are all markets with high levels of migration, demonstrating perhaps how social media are connecting the world.

The clear trend is that internet users in markets that have traditionally been viewed as emerging and technologically less developed are leading the way in the adoption of social media.

There are good reasons why this might be the case: a near-zero cost to using social media, always free once you get online, thanks to internet cafes and shared PCs; less competition from traditional media and a thirst for new sources of media; lower levels of in-home technology such as games consoles and a propensity to fit the early adopter profile.

The gap between developed and emerging economies is closing and, as internet penetration in these markets climbs, the shift towards the emerging economies will continue. Don't be surprised if social media campaigns start to move from these markets to the more "advanced" markets, rather than the other way round.

All this represents a big change in the media, advertising and marketing landscape. It's becoming more consumer-driven and increasingly internationalised. It is, however, a massive opportunity for brands, because this emerging media landscape relies entirely on advertising support - marketing communications is crucial to its future growth.

The bottom line for brands - and the reason why the likes of Intel and UPS are using these platforms - is that media can create positive experience and engagement.

Brands should exist inside the social media platforms that consumers spend time in. They should be creating content and they should be developing the applications and services that enhance a user's web experience.

Thanks to the rise of social media, it couldn't be a more exciting time to be involved in advertising and marketing.

- Tom Smith is the EMEA research manager at Universal McCann.