Social networks are good for PR but not advertising

According to trends within WPP Group's marketing and communications services social networks may not be effective for advertising. According to a year end report from WPP, social networks worked well for public relations but didn't have the same effect on advertising efforts.

by Kristina Knight

"In 2007, our broadly-defined internet-related revenue was almost $2.8 billion or 23% of our worldwide reported revenue and our narrowly-defined internet-related revenue was almost $1.5 billion or 12% of our worldwide reported revenue," said Martin Sorrell, CEO of WPP. "These are both more than the 10% for online media's share of total advertising spend both in the United States and worldwide. The new media continue to build their share of client spending."

WPP found that more of their clients were interested in keeping consumers updated on company changes, events and specials and that social networking sites were a good way to do this. However, advertising on social networks was not as popular, leading the company to deduce that social networks are helping businesses but in a different way than originally thought.

From the beginning, many businesses have been interested in creating branded micro-sites within social networks. What this trend report indicates is that this is a good way to connect with a user-base, to introduce new products or to keep consumers updated on sales or company events.