MySpace's Top Rivals Vie for Advertiser Attention

NEW YORK Whenever members log on to MySpace, they find the network growing ever larger, last week topping 180 million users. Yet while the News Corp.-owned site is the undisputed 800-pound gorilla of the social-networking world, its rivals are wooing advertisers with the pitch that they are more nimble, less cluttered and willing to try new, subtle methods of connecting brands with their audiences. At the top of the list is Facebook, which is quickly transforming itself from a college-student obsession into a full-fledged MySpace foe, with ambitions to serve as a "social operating system" for developers to build useful applications for its audience—and profit along the way through advertising and commerce. Other sites like Bebo are playing up their flexibility in crafting custom ad campaigns with minimum user interruption. Facebook revealed its grand ambitions a little more than a week ago, when CEO Mark Zuckerberg laid out a plan to allow companies and individuals to build social applications that would tie deeply into the site's rich trove of user data. The move stands in contrast to MySpace, which last month temporarily blocked photo-sharing application Photobucket, making it clear that it was not keen on application developers building businesses off MySpace's audience without giving News Corp. a cut. In the end, News Corp. ended up buying Photobucket outright last week. While Facebook chief revenue officer Mike Murphy said the platform is meant for developers, advertisers are also welcome to craft applications for users. "We're going to end up learning a lot," he said. "We're hopeful that this creates an environment where we can build tool sets for marketers to include application-like products with their sponsored content." The potential is evident in the first brand to build a Facebook application: Red Bull. That company's youth-focused branding shop, independent Archrival in Lincoln, Neb., created a brand application it calls Roshambull, which lets users challenge friends to games of rock, paper, scissors. It ties into Facebook's user data to give players "scouting sheets" of their friends' RPS tendencies. Creating Roshambull for MySpace would have been a much trickier endeavor, said Bart Johnston, interactive director at Archrival. "We could have built it for another social network, but the tools Facebook offered really eased the development," he said. "It would have required a lot of extra work [elsewhere]." The expectation is that such applications have viral appeal. Facebook's platform has built in this possibility with its News Feed feature, which shows a user if a friend adds an application like Roshambull. Indeed, Red Bull's effort got off to a solid viral start, attracting nearly 60,000 users in its first week, making it the 11th-most-popular outside application. Music-sharing site iLike also created a Facebook application that spread quickly. In less than a week, nearly 1 million Facebook users had added it. "If you're a big bank, spending $250,000 on advertising is nothing," said Chad Stoller, executive director of emerging platforms at Omnicom Group's Organic. "Think about what that $250,000 going to a group of developers to make Facebook a better experience [could do]. That's much better than a banner buy. You probably have a better chance of attracting someone's attention." Facebook's user base, which had been mostly confined to colleges and high schools, has exploded since it opened its doors to all users last September. Its visitor count has more than tripled in a year, to 40 million, according to comScore. What's more, Facebook is holding its visitors longer. In the past year, the average minutes-per-U.S.-visitor-per-month has gone from 171 to 195. MySpace has seen its average time per user decline from 215 minutes a month to 195 over the same period. Despite the Facebook challenge, MySpace's current dominance is undeniable. In terms of population, if it were a country, it would be the 11th largest in the world. Its visitor, page-view and time-spent metrics continue to rise, albeit at a slower rate now that it has achieved such scale. It drew 110 million visitors in April, up 80 percent from a year earlier, according to comScore. Much of that growth came from international markets, while the number of U.S. monthly visitors grew by 40 percent. One common criticism of MySpace under News Corp. it is that it is too cluttered with low-quality direct-response ads. Stoller said the site would likely remain a must-buy for big pushes like movie launches, yet he noted much of the advertising on MySpace fails to connect. "You feel like advertising is the top priority there," he said. "It comes in and takes things over." Bebo, which has tripled its number of monthly visitors in a year, to 61 million, according to comScore, is following Facebook's more restrained approach to ads by limiting banners to one per page—with none on users' profile pages. Instead, it has focused on what it calls "engagement marketing" programs. In a campaign launched last month, Bebo built a sponsor section where users could add a Skittles theme to their profiles, download a brand widget or take a poll. Rather than promote these offerings through banners, Bebo is relying on its friend-messaging features, which update users on what their friends have done recently on the site. "We're balancing the advertising with the community content," said Jim Scheineman, vp of sales and business development at Bebo. "We've got to remember Bebo-ers are there to hang out with their friends, and an interruptive message is not going to work." MySpace executives were unavailable for comment.The varied approaches show a maturing market, not necessarily cracks in MySpace's leadership position, said Sarah Fay, U.S. president of Aegis Group's Isobar network of digital shops. Isobar's Carat Fusion recently conducted a study with MySpace that showed Carat's Adidas ad campaign on the site was highly successful in swaying consumer opinions. "It was even bigger than we thought," Fay said. "For us, MySpace is a proven entity."

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MySpace's Top Rivals Vie for Advertiser Attention

Brian Morrissey

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