Saturday, January 05, 2008

Social Networking: Focus Matters

Kim Hart of the Washington Post wrote about niche social networking sites, and why they may be more appealing for marketers:

Overall, ad spending on social-networking sites is expected to grow 75 percent next year, to $2.1 billion, according to eMarketer, a research firm that tracks online advertising. With more than 110 million active profiles on MySpace and 59 million on Facebook, those sites still attract the lion's share of attention and money, winning more than 70 percent of all U.S. social-network ad spending in 2007, according to eMarketer.

But smaller sites' share of that money is growing. Of the $920 million spent this year to advertise on social networks, 8.2 percent went to niche sites, up from 7 percent in 2006, according to eMarketer. Next year, niche sites' share of ad revenue is expected to grow to 10 percent, according to an eMarketer report released this month.

That shouldn't surprise anybody. More focused online communities are likely to attract more targeted audiences. Users are also likely to spend more time there and be more loyal to them, whereas there's a flavor of the month feel to MySpace and Facebook. (Facebook in particular seems intent on alienating its users, whether it's through creepy tracking and public revelations of personal information like Beacon, using members' pictures in ads, or ham-handedly insisting that user's personal data belongs to them. I think the clock is ticking for them.)

Smaller sites are also more likely to have the flexibility to work with marketers to create customized advertising programs. Users are more likely to care who's supporting their beloved online forum.

The main value that large networks like Facebook bring is the ability to keep track of social connections. But we're already seeing others trying to build those capabilities into things like email, contact management, and calendar applications. That will continue, and the value proposition for something like Facebook for its users is likely to weaken. When social networking is an omnipresent feature, no a destination, those smaller networks and sites become even more important - and if you're already there, you'll be ahead of the game.


Anonymous said...

I'd compare this to the difference between the TV networks and targeted cable channels.

David Reich said...

I hit the wrong button. I didn't mean to leave the above comment anonymously.