Social Networks Baffle East Europe Media

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In Romania, it accounts for only 1 percent of online advertising, a market that last year reached 20 million euros. But its potential is huge, advertising strategists are saying.

Internet advertising has been growing for more than five years by some 30 percent annually in most countries in the region, not even slowing much since the recession hit. The growth is predicted to continue. But can media milk this new cash cow? It can if it simply does what social networks are doing: build communities online.

THE TRUE GOLDEN AGE OF MEDIA

In the old days, newspaper and magazine publishers dreamed up more and more ways to communicate with readers. We had letters to the editor, reader's advice columns, and so on. The idea was to give voice to your readers and bring them together. Then, it was not that simple to have real-time debates, interaction, and participation. Now, it is. And it's cheap.

Facebook ended 2008 with about 800 employees globally. In comparison, the public TV station in Romania has some 3,000 people on its payroll, and its stale and goofy programming is alienating more viewers every day. Obviously, the two organizations' offerings and mission differ, but when it comes to the new media business, the comparison is worth keeping in mind, especially as social networking is fast transforming from a connecting-people platform into a knowledge- and information-sharing agora.

The model has been attracting large amounts of cash in recent years and we already see some serious consolidation in the social networking segment in Eastern Europe. Estonia's Forticom owns some of the biggest social networks in the region, such as Russian odnoklassniki.ru, nasza-klasa.pl, and the three Baltic "One" sites. The networks have a combined membership of some 60 million people. In May, Russian company Digital Sky Technologies, Forticom's investor, paid $200 million for a 1.9 percent stake in Facebook. Over the years, Digital Sky has pumped more than $1 billion into social websites in the region.

Social networks are cited in the media and talked about. Businesses and institutions create their own accounts and communities on these platforms. It is exactly what the media should do to maintain and attract fresh readers and viewers.

Social networking is not replacing journalism, far from it. It helps direct the journalistic product to its consumers. Media need dedicated, reasonably staffed digital divisions tasked with spreading the content through as many new platforms as possible. This will bring back the readers who stopped buying newspapers and the viewers who tuned out. And with them the advertising money.

Provided by Transitions Online—Intelligent Eastern Europe

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