Myspace and Facebook Gunning for Local Ad Business
Myspace from NYT:
Fox officials wonder whether this sort of commerce, built on relationships [and profiles], can be extended to small businesses. A Ford dealership in, say, Indiana could create a profile, said Mark A. Jung, the chief operating officer of Fox Interactive. The profiles themselves, he said, would probably be free, but MySpace would sell enhancements to help businesses attract customers and complete transactions, Mr. Jung said.
Facebook from Matt Marshall:
The company will eventually turn to developing three revenue streams, Sze said. Those include local advertisers, such as pizza companies or bookstores that want to post an ad for a local college audience; banner advertisers seeking to reach Facebook's demographic type nationally; and sponsored groups, such as large companies sponsoring an online forum to interact with students.
(Both articles via Greg Sterling – here and here. )
As you can probably tell from earlier post, I think that this is the key to social networks. Pay per click is the only way local small businesses can advertise now. In most cases, it is not cost effective. And it certainly doesn't enable direct marketing. Myspace and facebook do. However, it isn't very efficient to advertise on either of these sites. Interact: Yes. Advertise: no.
I've tried. I've bought some facebook announcement ads and they didn't convert for a local pub. I've priced out myspace ads. If you work directly with them, you better be ready to spend $5K/month. If you work with a reseller, you can start around $1k/month. That just doesn't work for small local advertisers, especially given the disconnect between the community and banner ad conversions.
~admin
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I think the trouble with the likes of MySpace, is that advertising is simple in over-kill mode. When a targetted advert does come up, the end use is simply immune to it.
They are getting there… Social networking sites need to be expanded to encompass industries. In the nonprofit, international humanitarian sector, a “myspace” for NGO’s and nonprofits would help create awareness and build relationships among those tied to a similar cause(thus mobilizing shared resources, saving money, and expanding output). If I had the VC, I would build this.