A massive 80 per cent of people who use social networks have either chatted about, commented on or reviewed a brand or product on an online forum or social network. That’s one of the key (and most alarming) findings of the 2007 Social Media for Brands Report, conducted amongst 698 UK adults aged 18-35 in June 2007 by search conversion agency Tamar.

The report also reveals that two thirds of 18-35 year olds in the UK are actively engaged in social networking and almost two in five (38 per cent) are members of two or more online forums or social networking sites. There is a clear correlation between age and social network use, with usage figures increasing amongst younger age groups, peaking with eight out of ten 18-20 year olds actively engaged in social networking.

They’re Listening To What’s Being Said
The Report indicates that negative comments posted on online forums and social networks put off customers, with more than half (52 per cent) admitting that’s how they respond.

Travel brands are most at risk
Travel products and services were identified as the sector most at risk from negative comments on social networks, with 58 per cent saying that negative comments would lead to them abandoning a purchase. This was followed by consumer electronics (e.g. TVs and computers) with 51 per cent, financial services with 44 per cent and communications brands such as broadband and telephone providers with 40 per cent.

Neil McCarthy of Tamar commented, “The rapid growth of social networks and user generated content is shifting the online balance of power away from marketers towards the consumer, and the effectiveness of traditional online marketing channels is decreasing. With so many consumers actively commenting on brands through social networks, online reputation is becoming even more important. Social networks are a large and unregulated channel with a massive user base, through which brands could see their good reputation built through other channels, undone very quickly.”

Befriend, don’t banner
The Social Media Report noted that nearly 1.5 times as many 18-35 year olds would rather accept a friend request from a brand than have banner adverts on a social networking profile page. The best way to get users to accept friend requests was identified as through offering special offers and discounts (60 per cent). In contrast only 5 per cent said that they would be enticed by previews of forthcoming services, and only 10 per cent by exclusive products or services.

18-35 year olds are most receptive with more than half (51 per cent) stating the they would even be willing to act as a brand advocate (e.g. set up groups for brands, encourage friends to join and participate) on social networks in exchange for offers and discounts. This rose to almost two thirds (64 per cent) in the 18-20 age group, who are also the biggest users of social networks.

McCarthy concluded, “There is a clear need for brands to get their foot in the door of social networks, as these sites epitomise a new way of life for today’s consumers. However, users of social media are increasingly indicating that they don’t want to be advertised to by all and sundry, but would be happy to choose to have a closer relationship with advertisers they like.

“The first step is to understand how your brand is talked about in the social media space, and then decide on the best way of targeting a certain group of consumers. The approach preferred by the consumer is clear: brand owners must look to ‘befriend’ consumers on social networks rather than advertise to them, and the best way for them to do this is by offering discounts and special offers.”

Handle with care
The research results above fall into the “nice thought, proceed with caution” territory, in our humble opinion. Audiences circa 2007 don’t tolerate fools gladly. A recent example illustrates the peril of grown-ups trying to be cool: giant retailer Wal-Mart, has already racked up two failed attempts at trying to be Web 2.0 (their own social network, The Hub, closed after ten weeks; and a pro-Wal-Mart blog supposedly “written by two independent consumers” was later revealed to be part of a Wal-Mart PR initiative).

Wal-Mart launched its own “Roommate Style Match” group on Facebook earlier this month. The theory: that students heading to college would log on to Facebook to design their dorm room with their roommate.

As Wired notes on its blog network, so far the Facebook page has been hijacked and turned into a missive on the evils of Wal-Mart’s labour and business practices.

Of the more than 200 posts, only a handful relate directly to dorm decorating. And instead of color coordinating with roommates, users seem to prefer talking about how the retail giant “destroys communities” and prevents unionization.

To be fair, there was one positive comment — on a 4-pack of men’s environmentally friendly organic socks for $4.