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Social networkers are increasingly turning away from traditional media and toward their peers for information and product recommendations. This change provides marketers with a new opportunity to reach consumers by launching s-commerce initiatives that weave best practices from social networks and online comer, according to a report released by market research firm Compete on the convergence of social networking and e-commerce. In the process it has tried to coin a new buzzword, 'social commerce,' or s-commerce for short. The report, 's-commerce: beyond MySpace and YouTube,' finds consumer visits to social networking sites have increased 109 percent since January 2004, and page views per visitor have grown by 414 percent in the same time period.

Growth in online social networking has been explosive consumer visits to social networking sites have increased 109 percent since January 2004, while site usage (measured by pages viewed per member) has increased 414% over the same time period, four-times faster than member growth. As online 'socialites' spend more time on these sites, they become impervious to traditional media; over one-third of social networkers spend less time watching television, and reading newspapers or magazines as a result of increased usage of social networks. What’s more, online socialites say peers and colleagues hold more influence over their purchase than any other source of information.

The challenge for marketers is to connect with consumers while they become disengaged with marketing. New s-commerce approaches examined in the study recognise that the transactional and social web can be blended and that marketers can achieve commercial success by involving consumers in promoting and selling their offerings.

Other findings include:

• Compete’s analysis indicates that people join a social networking site to receive four benefits, meet people (78%); find entertainment (47%); learn something new (38%); and influence others (23%).
• Online socialites have different a spending profile than other consumers. Annual discretionary income for online socialites is nearly USD 8,000, 20% higher than consumers who have not used a social networking site, and they spend nearly 25% of their disposable income on online purchases (versus 17% for non-socialites).
• s-commerce innovators are using one of six strategies to integrated consumers into their sales and marketing efforts, branded micro-sites; customer reviews and ratings; online customer forums; peer-to-peer transactions; product-focused blogs; and community-created products.

"By understanding why people seek out social sites and the factors that shape their participation, marketers can explore and create new ways for their brands to thrive within the social web," said Stephen DiMarco, vice president of marketing at Compete. "Committing to a social commerce strategy means welcoming consumer participation throughout the marketing process."

Compete identified key steps to help marketers find success as they engage in s-commerce initiatives:

• Research consumers, while they research you and your rivals
• Create a channel to connect consumers and your brand
• Engage consumers in a conversation: listen, learn and leverage

On the other hand, report author Stephen DiMarco, VP of marketing at Compete said, "Consumers have limited social bandwidth. People only want so many friends, so the bar is high for marketers to create that bond that social networks have," he said. "Already people are starting to become social-saturated. For marketers, there are not going to be as many opportunities as they think there are. So they need to be more creative."

The key, DiMarco says, is to create social web sites as part of a brand designed to track customers and listen to them at the same time.

"Companies would be better served to build online forums on their sites, micro sites that support their brand, or explore other ways to get consumers to participate with them versus going to social networks to find more consumers," he said. "If I we’re a CMO or VP of marketing or head of media buying for an ad agency, I would seriously re-examine the sites that I’m looking to spend my money on in 2007 and see how I can redirect it back into more research and internally customer focused marketing."