MySpace or Yours? How to Succeed
in the Shifting Social Network
By Brad Powers
When Rupert Murdoch’s News Corp.
bought MySpace in 2005, social
networking sites moved into the
mainstream. Today, the entity is
poised to become a significant piece of the media
— and advertising — pie. “With an estimated 110
million active users, MySpace is undeniably a powerful tool for advertisers who seek reach and efficiency,”
wrote Brian Stelter in The New York Times on Jan. 21.
This is good news for online lead generation firms,
but we shouldn’t get complacent. As in any growth
market, change will be sweeping and unrelenting.
At this moment, the social network demographic
is changing. There’s no question that they offer an exciting new forum to connect with consumer interests:
witness the surge of new niche Social Network Service (SNS) sites in recent years, from Sermo, where
doctors can share clinical results, to MyChurch, an
online Christian community.
Virtually every presidential candidate had online
communities on their official campaign Web sites this
year. As more targeted communities are created and
find an audience, the SNS landscape will offer even
more opportunities for direct marketers.
Not only is the playing field getting larger, but the
players are diversifying. Cisco Systems, for example,
recently acquired the technology assets of Tribe.net,
a social networking firm, and also purchased a social
network design firm.
Companies like Cisco are clearly banking on the
spread of online communities to a larger population of
users. As SNS Web sites continue to attract a wider
audience, soon big consumer products companies
— and big advertising dollars — will follow.
We’re not quite there yet. The SNS world still bat-
tles an image problem, with lingering questions about
security, sexual imagery, sexual
predators and spam. The big
sites have taken steps to reduce
these problems, though it’s un-
likely these kinds of issues will
ever completely disappear.
Equally persistent is the
question of clutter. Some observers complain that networking sites suffer from advertising excess that undermines the consumer’s experience and reduces the
impact of individual marketing messages. And future
adopters of SNS may not tolerate a site if they feel
they are being bombarded with ads. What does all of
this mean for us in the online lead generation industry
and direct marketers?
First, spending for ads will continue as social networking sites gain traction with more consumers and
as advertisers search for more cost-effective ways to
reach their target customers. The overall inventory
growth is there, it’s up to us to us (and the SNS sites)
to figure out how to best monetize it. In some cases,
this might mean specialized creative to cater to the
specific audiences within a social network community.
Second, experience has shown that SNS users not
only see the ads on these sites but also interact with
them, which can translate to high conversion rates.
Of course, members of this demographic are skilled
multi-taskers. This tendency and overall comfort with
multi-tasking works in the DR marketer’s favor.
Third, as more advertisers become comfortable
with the type of inventory that can be part of SNS
Web sites, our competition will grow. Direct marketers can identify quickly which creative and campaigns
are performing for us. This skill will be ever important
as competition for inventory and rates increase.
Of course, as social networking sites spread in
number and influence, the big winners will be those
that are able to shape the market, create new opportunities, and balance the sometimes-conflicting
needs of users and advertisers. The challenge for lead
generation firms will be to keep pace with a market
that promises to move at breakneck speed, to grow exponentially and — as we saw in the evolution of cable
TV — to reflect a vast universe of personal interests
Our future success hinges on our ability to work
closely with our marketing partners to identify the
SNS sites that provide a positive user experience, offer
the best strategic fit for our messages, and give the biggest bang for the advertising buck.
64 Response APRIL 2008