Monday, August 6, 2007

Facebook vs. Myspace

A recent article on talked about the online war between two social network websites, and Facebook, which started in 2004, was originally only available to Harvard students, then spread to other colleges. Myspace was a website designed for people who weren’t in college; the “hip teen who didn’t go to the ivy leagues after highschool.” Facebook has now recently opened up to high school students; over the past year ages 12 to 17 on Facebook have increased 149% while Myspace has lost 27% of it’s teenage users.
Myspace and Facebook together account for 72% of online social networking with annual ad revenue of $650 million. With such high revenue, marketer’s have flocked to the sites to gain profits. Researchers have concentrated on the demographics to decide where they should advertise. Stores such as Hot Topic which include more trendy fashions advertise on Myspace whose users consist of the “hip working class teens,” whereas stores such as J-Crew advertise on Facebook whose users consist of the “Ivy League College Co-eds” who generally rely on more traditional fashions. Marketers admit they would rather work with Facebook because it’s users are more willing to follow through with advertisements. Demographics show that Facebook users also have a higher income than Myspace users, however Myspace still controls the majority of revenue at $525 million to Facebook’s $125 million due to it’s larger population. The article also discussed how demographics shouldn’t be researchers only concentration, but user behavior should be looked at as well; who visited sites, and what they did on those sites need to be a stress point for advertisers. Myspace is large and there is no evidence to show that advertisers will leave, however with new innovations from Facebook, it does threaten Myspace’s control over this new online networking trend.
When I saw the title to this article, I immediately was reminded of previous class topics in e-marketing class which discussed these online networks. It’s interesting to think how the internet has changed the way marketer’s think. The teenage group is highly saught after in marketer’s eyes because of their disposable income. How to penetrate this group has been a dilemma for some time and these new social networks are a great way to market products and services because of the high concentration of the teenage population. I use Facebook, but not on a regular basis, I also never paid any attention to the online advertisements Facebook delivers. After reading of the revenue from online ads however, I respect these marketing strategies a lot more. With ad revenues reaching nearly a billion dollars, these networks need to be explored more in depth on how to reach their users. The sites are growing daily, and with the power of the internet growing at just as high of a rate, this is one great way for marketers to expand their strategies.

The article can be found on in the tech area.

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