Advertising is missing a trick in ignoring rise of the silver surfer

24 November 2007

MOST social networks are generally thought of as the preserve of the Facebook Generation – young, web-savvy consumers who were born in the 1980s.

Saga, the British company that specialises in financial services and holidays for the over-50s, is one company keen to exploit the gap online. Last week it officially launched SagaZone, a social network for its core customer base. It believes it can build on the success of Saga Magazine – with over 700,000 subscriptions, Britain’s largest subscription-based consumer monthly– and capture a new audience online.

The concept sits well alongside Saga’s other products. Many of its consumers are open to making new friends and are keen to communicate in an online environment away from the embarrassing photos of Facebook and blaring music on MySpace. It believes the site will also help it with sales in other areas of the business; a group of users who meet online might end up booking a holiday together, for example.

SagaZone, which has 16,000 members after it soft-launched a few months ago, will also help focus the company’s image as a compassionate commercial operator. Although its primary purpose is to generate revenue by selling advertising and punting its own products, Saga believes the social network could provide a lifeline for those who are lonely or housebound, creating a so-called “halo effect” that casts the brand in a favourable light.

But the company is sure to face competition from other firms, especially ones across the pond. Eons, a Boston-based stable of websites aimed at consumers “on the flipside of 50”, as it puts it, amassed $32m in investment capital at the beginning of 2006 and has gone on to build a base of over 600,000 users. Founded by Jeff Taylor – who also started Monster.com, the world’s biggest online job site – Eons does not adhere to the “golden years” stereotype of the older consumer, instead providing content, including brain training games, for those who have no interest in growing old quietly.

It has not been plain sailing for Eons, however. While 600,000 users might sound like a lot for a niche social network, it does not warrant the multi-million dollar investment, from firms that included Sequoia Capital, General Catalyst and processor giant Intel. Under pressure from investors, Eons laid off a third of its 72 staff last month and was forced to rethink its strategy.