All social networks are heavily working on finding ways to earn money through some kind of advertising or marketing.
MySpace, one of the biggest (if not THE biggest) social network is already earning close to billion dollars in revenue.
Now they launched a new self serving ad platform. Ads are served on a CPC basis and you have to design them yourself. However, they’re not text ads, they’re display ads, which you can design yourself on the myspace website
The most interesting feature, however, is the targeting options you have. As Techcrunch writes:
The key to MySpaceâ€™s ad platform is their hypertargeting technology. Facebook allows targeting as well, although itâ€™s based on interest areas put in by users directly. So if someone says they like books, you can target ads to them based on that. What MySpace does is much different – they build out a profile of each user based on what they do on MySpace over time, with 1,200 different ways to categorize each user. So if you only want to target women who live in California between the ages of 25-30 who like motorcycles, i can. There are 2,842 of them on MySpace.
If that works properly – and if it is accepted by the community to be targeted in that way, it could well be a huge opportunity for myspace to increase advertising revenues!
Mitch Joel pointed me to a business week article about advertising in social networks. In the same post he also links to a blogpost claiming social media sites need advertising.
In short: time spent on social networks is declining, for whatever reason – one could of course be increased advertising on these platforms. So this could be a problem for advertisers in the near future. Secondly: social networks need advertising, the same way media has always been ad supported.
But it’s not only the fact that user numbers are going down, ads on social networks are also less effective than on regular websites:
Many of the people who hang out on MySpace, Facebook, and other sites pay little to no attention to the ads because they’re more interested in kibitzing with their friends. Social networks have some of the lowest response rates on the Web, advertisers and ad placement firms say. Marketers say as few as 4 in 10,000 people who see their ads on social networking sites click on them, compared with 20 in 10,000 across the Web.
The solution to this is new targeting mechanisms, to serve users more relevant messages.
Last fall, both rolled out programs allowing marketers to pitch products to people in hundreds of categories of interest, such as fashion and sports. News Corp. President Peter Chernin said on Feb. 4 that response rates on MySpace improved as much as 300%.
Could be a solution. But at the end of the day, this whole approach still tries to use old answers to new problems. How about taking an approach that looks beyond plain advertising? How about introducing branded widgets, services, or exclusive whatevers to these platforms, so that brands can provide an added value to the interaction between users?
I am thinking of such things as the Red Bull Rosham Bull Challenge in facebook, which is a game that two users can play against each other. Or even just plain and simple things like the fact that you can sponsor digital gifts in facebook. There still is lots of potential for these kind of approaches.
Oh, and from a business model perspective: I don’t think social networks need advertising support. At least not to the extent that their business models are in danger if there is no proper ad solution in place.
Think about the German platform Xing.com. There you have a choice of paying a monthly premium for additional services – one of which is the fact that you don’t get to see any ads.
There could also be other models, like changing the business model slightly and starting e-commerce around certain product groups (i.e. certain information-based, digital products or even real products).
These problems are not really new. But what this whole discussion shows, is simply the fact that social networks have, all of a sudden, exposed the need for new marketing approaches much clearer than any of the previous developments on the web.
so there is this guy, living in ikea as a promo, and I ask myself: why?
This is the official reason why:
New York City apartment had to be fumigated. All of his friends have tiny studio apartments. Hotels in New York are insanely expensive. Left with few living options, Mark thought it would be fun and make an interesting video to move into an IKEA store where he’d live and sleep for a week. Never in a million years did he think IKEA would go for it, but miraculously they have a agreed.
You can see a video each day, showing whatever he did during the day and night.
Anyway, in a good manner these days, you can of course join the facebook group (1,260 members) and you can be Marks friend on myspace (930 friends).
Mark seems to start a series of this kind of promo. He had also done the 171 Starbucks (visiting 171 Starbucks in a day, I guess they were all located on the same block – and did he have a coffee in each?)
We expected it, didn’t we. Facebook offering advertising targeted to peoples interests and likes. Now they offer this kind of advertising via their facebook flyers, reports TechCrunch.
The targeting offered covers the following sofar:
the Flyers let you target by country, city, gender, age range, political views, relationship status, education level, workplace affiliation, or any keyword in a personâ€™s stated interests. Itâ€™s that last option that could be really powerful. For instance, simply putting in different keywords into the Facebook Flyers ad-targeting page reveals that of the 19,951,900 Facebook members in the U.S., 101,000 are into rock climbing, 411,000 are into cooking, and 706,160 people are into traveling.
Regarding Facebook: there are already many rumours spreading. And depending on who is seen with whom in photos (which are so blurry you can’t see anything), the valuations for Facebook are going up and up. Currently at $15 billion.
According to the this article, MySpace is going into the same direction offering targeted advertising.