Blog Post

MySpace Has What Facebook Will: Ad Targeting

[qi:80] Earlier this week, a lot of attention was paid to Facebook’s new advertising platform, in particular how the company was going to let marketers use profile information to better target their ads. It wasn’t a surprise, given the fascination Silicon Valley has with Mark Zuckerberg’s baby.

Fascination — or rather, obsession — is one of the reasons why the world’s largest social network, MySpace, is losing some mind share, if not the share of the actual market. That should explain why Facebook’s planned “targeted ad-platform” (to be launched later this year) got all the attention from The Wall Street Journal. The business daily failed to mention, however, that MySpace has already launched an early version of a similar targeted advertising platform.

“MySpace remains the industry powerhouse with a huge advertising opportunity in front of it,” wrote Richard Greenfield, an analyst with Pali Research, in a note to his clients this morning. He went on to predict: “The most valuable advertising real estate across MySpace should become targeted over the course of the next 6-12 months –- meaningfully increasing the advertising opportunity.”

While Facebook has been struggling with some of its banner-based advertising, MySpace has been able to attract some large corporations to its platform, such as Coca-Cola (KO). Yet, we are beginning to see Facebook get more of a mind (and media) share.

I think the reason we have this Facebook obsession is because a lot of us who live in the hothouse called Silicon Valley (including the media) are spending a lot of time on Facebook. I wonder how many of my colleagues have MySpace pages (I don’t.) It is one explanation for the apathy towards Rupert Murdoch’s social platform.

17 Responses to “MySpace Has What Facebook Will: Ad Targeting”

  1. There is more than enough room and a large enough audience for both to co-exist. Both platforms have their negatives and positives. As for why media is turning their attention to FB and away from MySpace. Think it might have something to do with journalists’ disdain for MySpace’s owner. Don’t think it’s a coincidence that WSJ chose not to mention MySpace in their article.

  2. @Ed Kohler

    I think that these companies have the data but don’t have the resources to do the sophisticated marketing they should, which is a waste. Solutions like Juice MetrIQs and Aprimo are part of the solution, a robust ad platform is the other.

  3. I think there’s definitely a big disconnect between Silicon Valley and all the tech journalists/bloggers and the outside world. Facebook is growing in popularity for sure. But I haven’t seen the same wholesale mass migration from MySpace that all the Facebook hype would suggest either. Even though it’s a bit of a pain, a lot of people seem to be perfectly content to co-exist in both worlds (one might get more attention than the other naturally depending upon where most of a person’s friends are.) Facebook’s a nice platform, but at the end of the day I don’t understand why everyone’s foaming at the mouth over it. It’s just another platform with an even higher wall separating it from the outside world. Just speaking for myself here, if I’m going to get locked into a closed platform, I’d rather it be on a larger player that I know has a good chance of still being around in 10 years (i.e., Google or Yahoo.)

    And speaking from an advertiser’s point of view (my biz) we’re not talking about anything revolutionary here. Behavioral-targeting is simply the next step up the ladder from contextual-targeting and offers a greater level of relevancy. A lot of companies are working on the next generation of this (Yahoo in particular just announced their promising new SmartAds platform) and it should help improve the quality and effectiveness of ads. But I think when people starting running off at the mouth comparing Facebook’s potential to Google they need a reality check. From a financial standpoint, behavioral-targeted ads (while better than plain contextually-targeted as) still offer a much lower revenue ceiling than keyword-targeted ads which perform dramatically better and scale beautifully.

  4. MySpace was here first, I have 2 profiles on there, and I’m not going to throw all that away to start all over again.

    Also, we advertised on Facebook last week, and got HORRIBLE traffic stats, we’re definitely staying away from Facebook in the future!

  5. Yuvamani

    @Ed Kohler

    Its not hard to do the use case you provided, But true contextual advertising involves figuring out whether the 18 year old girl in california cares about the environment (and is rich) enough for you to target Prius banner ads at her.

    Facebook has enough data to do that, However building an ad platform is really not that easy.

  6. I don’t understand why it’s so difficult to do targeting. If an advertiser said they wanted to spend $1 million to advertise to 18 year old girls in California, would it really be that hard to contextually serve those ads?

  7. It’s called lock-in, and you won’t see many bands abandoning their myspace profiles – with thousands of fans already on there – anytime soon. The more you have invested in a platform the stickier it is. You might – MIGHT – ditch old content, but you probably won’t want to ditch those relationships.

    Businesses create value. Facebook has little value for musicians and their fans, but it has great value for students. There is overlap between these two demographics, but such users just create two profiles. Facebook still has the spirit of a “gated community”, while Myspace obviously feels like public space. These two models of interaction breed different behaviors. It seems likely to me that users of Facebook are less likely to be distracted by advertising.

    Advertising is fundamentally a distraction, contextual or no. Myspace attracts distractable users who are looking to waste time; Facebook feels more like a communal intranet. Assuming the usage per user is the same on each platform, Myspace has the superior value to advertisers on a per-user basis. Thanks for making me think hard about this stuff before we launch Om !

    • Srini
  8. I have a MySpace page – but I held off as long as possible (perhaps a year ago) and still hate the platform. I only use it to keep in touch with individuals who don’t use any other method of communication.

  9. As many others have theorized I find it difficult to imagine that most college bound MySpace users will not eventually leave the site for Facebook.

    The question that I ponder is which direction MySpace will go in their absence. Will MySpace remain a top site whose primary audience is teenagers and adults who did not attend college or will the next generation of teens find another site altogether, leaving Myspace in the dustbin with Geocities and Friendster.

    Perhaps the interest in Facebook’s ad platform over that of MySpace is a growing feeling that history hinting at the latter.

  10. techmine

    Facebook is a much superior platform than MySpace. So advertisers can expect Facebook’s users to be more loyal for a longer duration.
    Myspace is more hip. Once those artists and all that music goes away (to other sites), Myspace’s popularity will come down.

    @Joel summarized it well.

  11. Really, no one else is going to say it? Fine, I’ll do it.

    If you went to college, you’re probably on Facebook. Not universally, but for the most part. Most people who work in the Valley went to college somewhere, at least for awhile. So the line is drawn and we know who is on what side.

    People who use Facebook usually don’t like MySpace (and I will admit, it is pretty gaudy at times). People who use MySpace generally don’t care about Facebook at all. They don’t read lot of blogs (or at least not tech blogs) and they are completely oblivious to the facebook hype (other than the odd magazine cover).

    It’s just a case of people living in completely different worlds. MySpace isn’t getting much love in the web 2.0 blogs, but believe it’s all over the radio and on tv. Hype is important, but MySpace is smarter than people give them credit for. Let the bloggers talk about facebook…the musicians (the people the kids follow) are still making songs about MySpace.

  12. Yuvamani

    Facebook:Mac::MySpace:Windows ?

    It has been theorized in the past that some journalists have an apple bias because they use macs for work. Can the same be said about facebook ?

    That said .. Like the mac, Facebook is in many ways a superior product. Their photo app for example is easily one of the best ones out there. Sure they are not perfect but in terms of creating a good product they are up there. Hence all the positive karma !