Guest Opinion: MySpace or Yours? How to Succeed in the Shifting Social Network Service Environment1 Apr, 2008 By: Brad Powers Response
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 battles 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 unlikely 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 and demographics.
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.
Brad Powers is CEO of Active Response Group in New York. He can be reached at (212) 268-4535 or via E-mail at