Social Shopping

Social networking + viral marketing = e-commerce revenue.
There is no doubt that social networks are the 2006 stars in internet. The New York Times reported this month on a new hybrid of social networking and e-commerce called “social shopping.” The article listed ThisNext, Kaboodle, Wists and StyleHive as examples.

bigfish

The sites attempt to answer the characteristically American question of “What should I buy?” based on recommendations made by uber-shopper site members who each have their own MySpace-like profile.
These sites can be a boon to small businesses, with a word-of-mouth factor that outstrips what they might otherwise be able to generate on small business marketing budgets. Social networking and online shopping are top activities among heavy Internet users, according to a study of Internet usage in April 2006 by Universal McCann and Insight Express, so social shopping sites also have potentially strong appeal for some hardworking brand evangelists.

Technology used by heavy internet users

Individual e-commerce sites are getting into the social networking act too. Casual game publisher Big Fish Games just launched a beta site designed to get users to promote games to their friends. The site goes one step further by giving a cut of each game sale to the user who promoted it to the buyer. Low-cost promotion is a big deal in the casual games sector. Although casual games, which are favored by women over 35 in particular, account for the lion’s share of all game hours played, they are dwarfed in revenue by the graphically intensive games associated with the teenybopper set. A study by DFC Intelligence and iWon put casual game revenues for 2006 worldwide at less than $1 billion, which is a niche in the nearly $30 billion worldwide market for video games overall.

Online casual games

So incentivizing casual gamers to promote actual sales is a smart move. “People don’t want to pay for social networking sites in general, so a gaming site with a social networking component could help overcome that barrier,” notes eMarketer senior analyst Debbie Williamson. In fact, any site with an e-commerce angle could also involve social networking. Many more are likely to try it.
For more information and analysis on social networking, read eMarketer’s recent Social Network Marketing: Carving Out Some MySpace report (By James Belcher – Senior Analyst).

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