Maciejak+Final

// // proximity a next generation connection Proximity Research Report

** Advertising to Gen Y Using Social Media **

** Social Media Sites for Social Use Only ** By Victoria Maciejak Spring 2010
 * __ make the subtitle reference "testing advertising" BUT - I don't yet really see anything about that topic in the contents. __**

//

// ** Table of Contents ** ** Executive Summary ** ** Introduction: The current landscape of social media ** ** History of Social Media ** ** Gen-Y on Facebook ** ** Click-Through Advertisements ** ** Target Advertisements ** ** Recommendations ** ** Attachment 1: Focus Group Findings ** ** Attachment 2: Healthy Balance Facebook Page ** ** References ** //

// ** Executive Summary **

Businesses are finding it harder to reach Gen Y through advertising than any other generation. Gen Y doesn't stay in one spot long enough for companies' investments in advertising to pay off. Gen Y, however, has seemed to latch onto social networking. Unfortunately, it would be a waste of time and resources for companies to try to advertise to Gen Y on social networking sites, because Gen Y has become immune to click-through banner advertising. Gen Y doesn't want to be contacted via texts or e-mail either. In order for businesses to reach Gen Y, Proximity recommends the use of testing advertisements. //

// ** Introduction: Current Landscape of Social Media **

Gen Y uses social networking sites mainly to stay in touch with friends from high school. Another purpose is to upload, view, and comment on pictures. Facebook has long dominated the social networking field. Our focus group results show that Gen Y users do not look at the advertisements on Facebook. //

// ** History of Social Media **

Facebook is now the dominant force in the social networking field, but it wasn’t always that way. The beginnings of social networking started with the Bulletin Board System (BBS). “These online meeting places were effectively independently-produced hunks of code that allowed users to communicate with a central system where they could download files or games (many times including pirated software) and post messages to other users” (Digital Trends).

However, the first social media that looked like the social media of today was AOL. It had member-created communities and searchable member profiles that allowed users with common interests to find each other (Digital Trends). In 1995, classmates.com was created. The site allowed people to search for members of their high school classes so that they could get back in touch. The early version of the site didn’t allow members to create profiles, however, it eventually adapted to what the users wanted and allowed the creation of profiles (Digital Trends).

Myspace was launched in 2003 and had over 90 million members. However, Facebook was launched in 2004, catering only to Harvard University students. In 2006, it was released to the general public and now has over 150 million users (Digital Trends). Facebook quickly became the dominant force in social networking.

** Gen-Y on Facebook **

put the summary below in present tense

Proximity Social Networking Focus Groups show that Gen-Y users clearly favor Facebook above all other social networking sites, citing its simplicity and privacy settings. //// Participants agree that the main reasons they maintain Facebook pages is to upload and view pictures, and to keep in touch with friends. ////

Most participants agreed that Facebook’s major competitor, Myspace, was “too cluttered.” Many users claim that they once had Myspace pages, but switched to Facebook because Myspace took too long to load. They also preferred Facebook’s privacy settings to those of Myspace.

A select few would chose to be friends with their favorite stores on Facebook. However, the majority stated that businesses had no reason to be on Facebook, and that they had no interest in being friends with them. (See Attachment 1: Proximity Networking Focus Group Summary) // There are 22 social networking focus group reports on the wiki:

@http://engl317s10.wikispaces.com/search/view/%22Social+Networking+Focus+Group%22

and the summaries of these findings are linked from the team pages:

MWF 1 social networking, MWF12 social networking, TTH 1230 social networking,

You attachment should start by describing the purpose of the focus groups and summarizing the number of students in all the groups and span of time the sessions were conducted (e.g. 115 Gen-Y students during the weeks of March XXXX, 2010. Then consolidate all the findings from the team pages into a single list, give some approximate summary of responses for each point, and copy in some telling quotes for each one.

// ** Click-Through Advertisements **

A popular method of advertising currently is the use of banner advertisements. Banner advertisements are pieces of coded html that when clicked upon, transport the user to the advertiser’s website. They are usually found at the top, bottom, or side of a webpage, and they can come in all different sizes (See Figure 1).
 * How Click Through Advertisements Work **

Figure 1: Sizes of Banner Ads (Howstuffworks.com)

Advertisers have two goals when using banner ads.

use list here

The first is that the user will click the ad, be taken to their site, and then buy something. The second is that in the absence of a click-through, the user will remember the ad in the back of their head and then have brand recognition when they see a product from that advertiser (Howstuffworks). The company advertising pays the site for the privilege of having the ad on the site, either in a set monthly fee, or by number of clicks.

Facebook, as well as other social networking sites, have the option for companies to customize their advertisements toward certain types of people. Facebook easily segments Gen Y by gender, interests, and geographical location. This information is easily accessible because users put it into their profile. Facebook then uses this information to display the types of advertisements that it thinks the user will like (Businessweek).

Banner advertisements are becoming more and more ineffective. Users are so used to seeing customized banner advertisements that the ads just blend into the background. Users don’t even notice the advertisements anymore, let alone click on them. Since many companies are buying banner ad space on social networking sites, “Users will be barraged by ads to which they will pay less and less attention. Call that public space, a world of billboards and cacophony. Even though the ads will be more ‘relevant’ than ever, users will increasingly tune them out” (Wall Street Journal). When users are “numb” to advertisements, they become ineffective, because Gen-Y doesn’t notice them.
 * Why Click Through Advertisements are Failing **

Click-through rates have been on the decline for the past few years. “The average click rate on standard banner ads across the whole Web [is] 0.2%. This reflects a surge in new ads and Web pages, fueled by the rise in social networks” (Businessweek). If Users aren’t clicking on the advertisements, businesses are wasting money and resources by creating them.

Many businesses are not only placing banner advertisements on social networking sites, but creating pages for Gen-Y users to become their “friends.” One such business is Healthy Balance. Healthy Balance created a Facebook page. On this page are coupons and promotions (See Attachment 2). Users have the ability to “Become a Fan.” Out of the over 150 million users on Facebook, Healthy Balance only has 9,000 fans. Out of the 31 posts on the first page of their wall, 26 of them are posts by Healthy Balance. Only five are posts by actual fans (Healthy Balance). Gen-Y users are simply clicking “Become a Fan” and then never returning to the site. It is a waste of time and resources for Healthy Balance to have this page on Facebook when no one views it.
 * Case Study on Healthy Balance’s Facebook Page **

** Target Advertisements ** Gen-Y users are numb to banner advertisements. The future of online advertising lies with target advertising. Amazon has the right advertising model. [Amazon has] your purchase history dating back to your very first purchase on the site, and display[s] it for you right in your account. [It has] a wide variety of products from nearly every possible retail market, from groceries to media to electronics, and with the addition of merchant storefronts through the Amazon system, [it] increases that data set (Aleo-Carierra).

Amazon then makes product suggestions based on what the user has bought in the past, and what other users with similar purchase histories have recently bought. If Amazon was tied into different aspects of the web, advertisers could pay Amazon to target audiences even further. If the noise of advertising is reduced, people will be less numb to advertisements, and more willing to click-through, provided that the ad showed exactly what the user wanted. ** Recommendations ** use list here to highlight main pionts It is important for clients of Proximity who wish to reach Gen Y to not waste time and resources placing banner advertisements or creating pages on social networking sites. Gen-Y does not respond to advertisements on social networking sites. They only use social networking sites to stay in touch with their friends and upload and view photos. Gen-Y does not click through ads on Facebook, and they do not view company pages. What Proximity suggests its clients do is wait for Amazon to offer an advertising service and get on board with that.
 * Attachments **
 * Attachment 1: Focus Group Reports **
 * - I am not sure how to organize all the focus group reports into one attachment. ** see above

Here is a screen shot of the Info section of Healthy Balance’s Facebook Page. On it, it lists the company overview and the mission statement, as well as has the link to their actual website. The company offers coupons and promotions, such as a $5000 contest.
 * Attachment 2: **

Aleo-Carreira, Cyndy. "Where Online Advertising Fails: The Future of Web Advertising | Profy | Internet News and Commentary." //Profy - Technology News and Commentary//. 12 May 2010. . "Healthy Balance." //Facebook//. Web. 13 Apr. 2010. <[]>.
 * References **

"How Banner Ads Work." //Howstuffworks//. 10 Apr. 2010. <[]>.

"How Many PPC Ads Should You Put to the Test?" //DBASE MEDIA LLC | LEAD GENERATION | ONLINE MARKETING | SEARCH ENGINE MARKETING | SOCIAL MEDIA MARKETING | MOBILE MEDIA//. 11 May 2010. .

"So Many Ads, So Few Clicks." //BusinessWeek - Business News, Stock Market & Financial Advice//. 10 Apr. 2010. <[]>.

"The History of Social Networking." //Technology News, Product Reviews, Software Downloads | Digital Trends //. 10 Apr. 2010. <[]>.