MySpace and new marketing.
No one in 2004 ever thought that MySpace and contemporary media platforms where synonymous. But its four years and a $580 traditional million major media buyout later. MySpace, still the highest trafficked Social Networking site with 110 million active users a month. Now in 24 countries, the site is expected to make $800 million in revenue in 2008, the majority of that income will be from the advertising and marketing sectors. Google, recently inked an advertising deal with MySpace’s parent company, Fox Interactive Media for $900 million.
So what’s the problem? Well, its called Facebook and the growing use of the term “MySpace-refugee” that has begun to erode MySpace’s market dominance. Facebook, known for its higher technology, cleaner interface and wider demographic is garnering users at a faster rate than MySpace. The advertising and marketing industries are seeing Facebook as a better bet for their money these days.
MySpace is no longer considered the “sexy choice” for scenesters in the know, as it is beginning to be seen as a traditional media outlet by turning into a portal, like Yahoo, AOL, or worse, Netscape. To be fair, Fox intended it to morph into a portal, but hoped it to be further along in that vision by now.
Some might argue that this is due to the hands off approach by Fox Interactive. With Tom Anderson and Chris DeWolfe signing new $7.5 million dollar contracts recently, it looks like it will remain that way. DeWolfe says that Fox Media mogul, Rupert Murdoch, reports about once a month and is “very aware of the product road map.”
The struggle is between the chaos of free programming that is de rigeur for MySpace users and the clean cut neatness that most consumer product companies have become used to. “The challenge…is making it more of a well-lighted environment for big-brand advertisers, the Procter & Gambles and Unilevers” said David Cohen, the US director for digital communications for the media buying agency Universal McCann.
Some experts say that it’s just not conducive to advertisers with it’s cluttered, often third party looking layout and it’s just not good from a consumer experience standpoint. Also MySpace is suffering from an image problem, with a deluge of unwanted friend requests, spam and sexually suggestive material. These issues have lost it some users.
MySpace is prepped to counter the trend and holds some heavy numbers to give it some room in this seemingly troubled time. Second only to YouTube in online video viewership and still holding a gigantic 1.3 billion page views a day (which did dip for the first time in December 2007 according to comScore), MySpace insiders are not showing that they are concerned. Instead, they are moving to meet the needs of its advertisers and users by introducing customized features, mobile device services, new security and sighting its growth potential. MySpace has announced an accord with 49 states to tighten privacy restrictions, in response to concerns of child predators.
Despite competition nipping at its heels, MySpace is still far and away the most trafficked internet site and heavy numbers will give it some room in this seemingly troubled time. “Think about the size and scale of MySpace and the opportunity to affect people and the opportunity to play a role in the culture” said Peter Chernin, the president and chief operating officer at News Corp., “there’s really nothing like it”
Weather or not the size and scale of MySpace will remain is yet to be seen. It has a great head start and very capable people at its front. But advertisers and users will be the tale of the tape.