MyOhMy the problems for MySpace
Fox Interactive is starting to feel the heat coming down on MySpace. Monetization of the social network has been the key since News Corp. acquired it a while ago but that goal has remained elusive, with CPMs staying low for a variety of reason.
For one, the people on MySpace don't particularly care for ads, and Fox has littered everyone's profile with a ton of them. There's also the fact that advertisers aren't completely convinced putting brand messages next to pictures of the two hot chicks you met at Senor Tadpoles is a great idea. Add on top of that recent numbers showing membership is declining for the first time ever and that members are sticking around on the site for a shorter amount of time and you can see that the problem is going to become even more...ummm...problematic.
MySpace is also facing pressure from Facebook, which turned out to be much more of a competitor than they probably initially pegged it as. Considering Facebook just signed an ad deal with Microsoft that, I think, will help Facebook make many of the same mistakes MySpace has, that threat is only going to grow. As Ian Schafer says in the BW story, display ads on social networks just aren't working out well and that's where Microsoft is strongest. So expect the Facebook experience to decline in quality when this roles out.
But it's not just Facebook that is breathing down MySpace's neck. Friendster has decided to open up its platform for developers much like Facebook and others have and MySpace is planning to do. More than that, it's decided to make the platform open to widgets and apps from other networks, meaning developers don't have to re-create their work to bring it to the Friendster audience. And there are a host of niche-focused networks that cater to a passionate audience by providing them with a virtual meeting place to hang out with like-minded fans.
Social networks are, by their very nature, niche environments. It doesn't matter if an ad or other marketing message reaches two million people on Facebook. It's only slightly better if that ads reaches a group that's setup for people who share an interest in that type of product or industry. What does matter is if you, as a marketer, provide value to the community. You probably don't remember who has advertised to you, but you are likely to remember someone who, through their sponsorship or something like that, enhanced the experience you had on the site.
That's why I think the best sorts of marketing I've seen on MySpace are the ones that have added functionality. All of the examples I have, unsurprisingly, come from movie studios. Warner Bros. upgraded people's photo-album limit to market 300. Dreamworks let you edit your photos to market Transformers. Warner Bros., again, added a video slideshow tool to profiles to market I Am Legend. In each case the user got something out of the sponsorship.
The help provided by a marketer is going to stick in people's minds much more than a banner ad that flashed at them while they were trying to leave their friend a comment. Provide value and the audience will assign the appropriate level of value to your brand. Provide no value and the audience will assign the appropriate level of value to your brand.
I know which one I would prefer.
