Social-networking sites can be classified into four primary categories.
General social-networking sites, like MySpace, have social networking among
friends as the primary focus. There are also several social-network sites that
are affiliated with major portals (like Yahoo! 360). Because of their portal
affiliation, they are typically separated from general sites for classification
purposes. Lastly, there are vertical social networks. Vertical social networks
differentiate themselves by emphasizing some common hobby, interest, or
characteristic that draws members to the site. These vertical networks do not
attract the same traffic typical of general sites, but one might argue that the
members are more involved because of the common interest that initially brought
them to the site. Within this realm of vertical networks, sites exist for pet
lovers (e.g., Catster), photography (e.g., Flickr), soccer fans (e.g., Joga),
gays and lesbians (e.g., Glee), and more. Examples of each type of
social-networking site are provided in Table 3.1.
Some social-networking sites are generating advertising revenue on a larger
scale than others; eMarketer predicts that MySpace will capture a full 60% of
the market for ad spending. Other major players for advertisers including
smaller sites like sites like Facebook, Bebo, and Piczo, which expected to earn
about 23% of ad spending on the social-networking realm. Portal-affiliated sites
will garner about 11% of ad spending and vertical sites about 5%. It probably
comes as no surprise that Myspace earns the lion's share of ad spending, at more
than $510 million for 2007 alone!
The landscape of social-networking sites changes daily as new entrants seek
to enter a growing market. The number of sites with reasonably large name
recognition is fairly small, but the Mashable lists entries for 350
social-networking sites! A few examples are highlighted below.
MySpace.com: A Place for Friends
Myspace is a general social-networking site with more than 100 million
registered profiles and unique visitors exceeding 64 million per month. It is
the mass market of social networking, akin to the Super Bowl for television
advertising. In fact, the most recent Super Bowl broadcast partnered with
MySpace to deliver additional advertising impressions for Super Bowl commercials
by offering a MySpace community site dedicated to the ads. MySpace was initially
intended for an audience of teens and young adults, but an analysis of MySpace
user demographics from comScore corrects that perception. MySpace's age
demographic is distributed over a range of ages with its largest category being
the 35-45 age group (making up 40% of MySpace’s user base). A strength of
MySpace is its broad appeal, developing at least in part from its vast array of
features, including individual profiles, music, video, instant messaging
capabilities, blogs, groups and communities, and a host of others. Given that
social-networking sites exist (at least from the user perspective) to create and
maintain personal relationships, using the largest network increases the
likelihood of an existing friend base. Niche networks, in contrast, must rely on
invitations from users to build membership and expand network. MySpace is the
most successful network in leveraging what is known as the network effect. The
network effect explains that a network gains value as more people join the
network.
MySpace recently announced one of the most advanced developments in
social-network advertising. It now offers an advertising solution for businesses
that claims to microtarget ads to members. Because the ads are highly targeted
based on the data in user profiles, the ads should have more relevance to and
meaning for the target audience, resulting in a higher rate of response. This
system promises to improve online advertising, especially for local advertisers,
but its accuracy depends upon the accuracy of the data in user profiles and the
quality of the data-mining function used to extract the segments for targeting.
In addition to targeted display ads, brands can create brand profiles and
communities.
Facebook
Facebook is the second largest social network. Though largely dwarfed by
MySpace's size and traffic, it boasts highly involved members, many of whom
report spending hours each day on the site and constantly checking for new
Facebook messages on their mobile phones. When Facebook launched in February of
2004, it focused on high school and college students, relying on existing
tangible networks to build the virtual network base. It has been enormously
successful with the college audience. According to the GenX27 Youth Research
Initiative, a higher percentage of college students use and prefer Facebook over
MySpace. According to Student Monitor's Lifestyle & Media Study, Facebook is one
of the top five "in" things to do on college campuses, second to iPods, named by
73% of students and tying with beer, which was named by 71% of students. Early
estimates suggest that about 85% of all college students use Facebook, with 60%
of them logging in daily, spending about a half hour per day on the site. Since
that time, it has opened the site to non-students, expanded to several other
countries, and earned more than 27 million members. An article featuring
Facebook in Fast Company magazine reports that Facebook boasts 47,000 networks,
30 billion page views per month, and more photos than any other photo-sharing
site, and is the sixth most trafficked Web site.
Facebook has offered advertisers more strategic value than perhaps any other
social network. It has accomplished this with a mix of strategic vehicles,
including targeted display ads and sponsored stories, known as Social Ads and
Sponsored Stories, branded profiles known as Facebook Pages, a developer
incentive program to encourage content development called Facebook Developers,
and a social news feed of brand-related user behavior called Beacon.
Facebook Social Ads are targeted at specific users based on member profiles
and behavior in the network. For instance, Facebook Social Ads can be delivered
to users whose friends have recently engaged with the brand's Facebook profile
or visited the brand's Web site. Even the location of delivery for social ads
can be targeted with ads appearing next to news feeds of friends (a Facebook
feature that allows friends to update others on their recent activities) who
mention the brand. By delivering ad impressions that are related to news feeds,
Facebook encourages discussion and word-of-mouth communication about a brand.
Facebook Pages are brand equivalents to user profiles. It is the location on
the site where brands develop their brand personas. They can be enhanced with
applications from the business itself and from developer widget applications.
The free developers feature enables programmers to create widgets, mash-ups,
tools, and projects for Facebook users. These small applications are popular
with consumers and are useful to brands that utilize them to maintain a presence
on user profiles. For example, FaceBank is a widget that enables Facebook users
to track expenses (and share information about expenses with friends). Another
popular application is Lickuacious, which lets users rank friends according to
the popularity of their wall posts. The Wall is Facebook's comments feature.
Facebook Beacon offers brands a way to virally distribute information about
user brand-related activity. News feeds notify friends of a user's engagement
with a brand's profile and Web site along with specific product search history
and purchases. The news feed stories act as a form of word-of-mouth promotion.
Further, they are targeted in that the feeds are then seen by friends who are
also likely to be interested in the brand. Beacon offers a potentially powerful
way to utilize the influence tactic of social proof, the influence a group of
others have over a consumer's decision. This feature should provide more value
for advertisers who will benefit from the additional exposure and the easy
transference of opinion-leader information to others in the network. However, it
has been criticized by privacy advocates and some brands publicly expressed a
discomfort with the degree of user information it reveals.
Author Bio
Tracy L. Tuten Ph.D. is Associate Professor of Marketing at Longwood University.
She has authored more than one hundred journal articles, book chapters, and
conference presentations; her research interests include Web-based survey
methods, branding and identify, and online advertising. She serves on the
editorial review board for the journals Psychology & Marketing and Gender in
Management and serves on the academic advisory board for the Commercial Closet.
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