Is there money in social networking? Sensis thinks so

A report by online marketing company Sensis and the Australian Interactive Media Industry Association warns that companies are not doing enough to tap the commercial potential of social networking sites.

Based on surveys of 2,000 Australian businesses and 800 consumers, the Sensis Social Media Report found that 62 percent of Australian internet users have a presence on social media sites such as Facebook, Twitter, MySpace and LinkedIn.

Of all people using social networking sites, 97 percent are signed up with Facebook, with the average user spending more than five hours a week.

Yet the report found that just 14 percent of small businesses users, 25 percent of medium sized businesses and only half of large businesses in Australia have a social media presence.  

This is despite the fact that 12 percent of social networking users are using sites like Facebook to research products. Sensis and AMIA found that about 36 percent of searches resulted in a purchase, with 70 percent of these transactions conducted over the internet. About 42 percent of products researched via social networking sites were clothes and other and fashion items, followed by electrical goods at 39 percent and furniture at 28 percent.

The research also revealed that 57 percent of social media users were most interested in what businesses could offer in the form of discounts, with 45 percent citing giveaways. Invitations to events were noted by 41 percent of survey respondents as demanding most of their attention.

Reflecting the increased sophistication of internet users, 41 percent of consumers surveyed considered information on products as most important to them.

“With so many people using social media, it’s clear there are huge opportunities for brands to connect with current and potential customers, but businesses need to be careful in how they interact with people via these sites,” said Sensis head of emerging business Simon Betschel.

 “Although catching up with friends and family, sharing photos and coordinating social events continue to be the main reasons people use social media, there are increasingly more opportunities for brands and businesses to use this space. To succeed, they need to make sure that, above all, their communication is targeted and relevant,”

While the report found that ads on social media sites tend to be ignored by visitors, it found that blogs and reviews can greatly influence buying decisions. Some 63 percent of social network users read an average of six reviews online prior to making a purchase.