Social Network Sites Gain Market Share, Drive Retail Traffic

Social Network sites such as Facebook, MySpace and Bebo received more Internet traffic in the UK last month than email sites Hotmail, Yahoo! Mail and Gmail. According to Hitwise, the top 25 social networking sites accounted for 5.17% of all UK visits in October, as compared to 4.98% for email sites.

That growth is significant, as just a year ago the email sites more than doubled the traffic of the social networks.

According to Hitwise research director Robin Goad, the stats show that communication between friends using social networks is starting to eat into web-based email traffic.

A growing proportion of the UK online population is choosing to communicate with friends via social networks rather than email.

Perhaps more importantly, their statistics show that clicks to retail sites from social networking sites are now equivalent to the traffic generated from the web-based email sites. In other words, while many businesses view social networks as entertaining distractions, referrals via social networks are generating eCommerce activity.

Earlier this week, Facebook introduced Facebook Ads, in an effort to drive referral-based marketing. While time will tell which products are suitable for such referrals, it’s clear that social networks are already playing a role in driving online commerce.

In a related story, eMarketer projects that the shift from traditional media to online advertising is accelerating. They estimate that advertisers will spend $21.4 billion this year and project that to grow to $42 billion by 2011. The increased dollars spent online are coming out of their traditional media buys. Of the 100 leading national advertisers, according to eMarketer, more than half decreased their advertising budget for TV, radio, magazines and newspapers in 2006 while increasing their online advertising budget.

Combined, the 100 top advertisers spent nearly $230 million less on the Traditional Four media in 2006 compared with 2005, while boosting their Internet ad spending by $558 million.

Technorati Tags: Bebo, eCommerce, Facebook, internet, MySpace, social-networks

• Add to del.icio.us
• Digg This!
• Reddit It!
• Email This Post
• Subscribe to this feed

Thursday, November 8th, 2007 : Industry Research : No Comments

You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.