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.

Melanie's Blog

Here is a link to my blog from my advertising class.

It's an Ad Ad Ad Ad World

The article I chose is relevant to our e-marketing class because it paints a very clear picture of how advertising and marketing are going to be innovating the way we use technology in the coming years.

The article explores the new ideas emerging from David W. Kenny’s, chairmen and chief executive of Digitas, ideas that it’s only a matter of time before all of the world’s advertisements are digital. Digitas is an advertising agency in Boston that was recently acquired by the Publicis Groupe six months ago for $1.3 billion.

Mr. Kenny is now trying to reshape the digital advertising strategy for Publicis’s worldwide conglomerate, which includes advertising agencies like Saatchi & Saatchi and the global accounts of Proctor & Gamble, Hewlett-Packard and General Motors. Mr. Kenny’s plan is to build a global digital ad network to create thousands of versions of ads. Then, with the help of information on consumers and computer algorithms, the network will be able to decide which ads to show at every moment to each person that turns on a computer, cell phone, and the television. Mr. Kenny wants to make each advertisement that a consumer sees into a personalized message.

When I first read this article, I thought “Wow, no way! That seems impossible!” But as I read over it a few times and really sat and thought about it, I realized that this kind of technology really isn’t too far into the future. Being able to personalize an advertisement to every single person at every single moment seems quite impossible. However, with how rapidly information technology is expanding this kind of technology may really be possible in the near future. Mr. Kenny is building upon the basic ideas of companies like DoubleClick, by storing and sorting through user data the new technology will be able to directly connect with each individual consumer.

For advertisers and marketers, this seems like a great idea, in fact maybe the best idea any marketer as ever had. I can not think of a better way to reach your target audience than by being able to actually send them a personalized message every time they are surfing the web, talking on cell phones or even watching tv.

However, as a consumer, I do have a few concerns. Personally, I think that kind of technology and advertising may be a bit of information overload for a consumer. If a personalized message popped up on my cell phone every time I turned it on I would definitely be frustrated. Or every time I went to check my e-mail and ads appeared all over the place, I don’t think I would ever want to turn my computer on. Consumers like having control over what ad content they take in, and if there was shift of power back to the advertiser, I think consumers would begin to dread using the technology that they have.

My other concern would be, how do they know who is actually sitting in front of the computer or television screen? If a child is using his dad’s computer and suddenly there are adult ads popping up, who can control that? The same could be said for the television. Technology would not be able to tell what member of the household is watching the tv at that particular time, so all of the money they are spending to advertise to a certain demographic, may be a wasted effort.

From the advertiser’s perspective, I realize this is just the next big advancement in global technology. And really, Mr. Kenny is an advertising-genius for being the first to come forward and claim this idea. It could really keep consumers from filtering out ads. If a series of advertisements were able to keep a particular consumer’s attention because the ads had value to that consumer, then channels wouldn’t get changed during commercials and advertisements on the internet would not get overlooked.

E-marketing Article #2

Microsoft Tosses Ads Into the Works
By Katherine Noyes
E-Commerce Times

Microsoft is launching a pilot program to test a free, advertising funded version of Microsoft Works. It’s called Microsoft Works SE9, and it will be a desktop program instead of a web-hosted program. Recently we talked about how companies were starting to see how effective online advertising can be, and how it can be tailored to the interests of your target market. Microsoft is on of the companies considering advertising as another revenue stream for their company. They recently purchased aQuantive, which is a company that helps marketers reach their target markets through digital marketing services. No doubt they helped produce the ads that will be seen in the SE9 version of Microsoft Works. I’m curious to see how the test market will react to this product. In this age of people doing almost anything to get out of watching advertisements, do they really think people will buy a wordprocessing, spreadsheet program with ads in it that you can’t avoid just because it’s cheap? The program will retail for $39.95, which is great compared to Microsoft Office, which ranges in price from $149 to $679. Consumers will also have the option of buying it preinstalled on their PC’s, which makes it virtually free. However, there should be some concern about the brand equity in the Microsoft name, and whether this product will decrease it in any way. People purchase these products because of the service they provide. They are able to get their work done offline in an advertisement-free environment. Now Microsoft wants us to deal with advertisements offline as well. Fortunately this is just a test for now. Here is a link to the article….

E-Marketing: Bloggers Consider Labor Union

This article is It discusses the ongoing movement by a coalition of bloggers to develop a labor union. The objective of the union is to help bloggers receive health insurance, carry out collective bargaining, and set professional standards.

This movement has developed from the growing power of bloggers. Because the field of bloggers is diverse, it is unclear what type of professional organization is needed.

Most bloggers agree that having a union would allow them insurance discounts and press credentials. Others believe that a union could also help set up guidelines for advertising and data on blogger pages.

A union would lead to increased professionalism and regulation. The increase of these elements could lead to a boost of more jobs for bloggers as well as becoming a more trustworthy source of information.

Not all bloggers think unionizing is a good idea. Because there is no regulation on blogging, many consider it to be freedom of expression. Setting up unions may lead to compromising of these freedoms.

The effect of this movement on marketers is great. If bloggers begin to unionize, the will be both positive and negative consequences.

Positive effects would be regulation on bloggers. This lessens that chance that an advertisement will be placed on a distasteful website. Thus, there is less risk for a marketer placing an advertisement. Also, if regulation is enforced, it is more likely that negative blogs would be restricted. This would silence some overly critical bloggers.

A negative consequences of unionizing would be less freedom of expression. If blogs begin to restrict what can and cannot be discussed, important consumer topics could be lost. Marketers would loose a strong outlet of customer reviews that allow them to evaluate and change products and promotions.

e-marketingclass article 2: Differentiate Or Die

This article, which comes from, discusses how products are becoming more and more similar in the consumers’ eye, because they are not taking the time to truly differentiate themselves. Jack Trout, president of marketing at consulting firm Trout and Powers, points out how in a book he had written in 2000, Differentiate or die, told companies that in order to be successful they have to differentiate themselves from their competition, and suggestions on how to do this. Trout’s advice has been taken by many companies, but not all. He sites Coca-cola verses Pepsi as an example. Coca-cola has had a drop in sales because they have given up a lot of profit by trying to target a large population instead of a segment. He uses the fact that if Coca-cola would have differentiated themselves instead of trying to invent many new soft drinks and becoming overly diversified with everything from Coke to Diet Coke, to Cherry Coke and most recently Coke Zero, and just positioned them as a drink for more mature cola drinkers, instead of chasing everybody, they could have stopped Pepsi from becoming as large as they are today.

This article is important for marketers because it is an example of how having too wide of a target market and not being able to differentiate yourself from your competition. A company needs to look at itself and define a definite target market based on how they want to position themselves to the world. If they fail to do this, it could lead to a loss of profits, and the company loosing the strength in its name and image. Also, by marketing not differentiating the company enough, it could leave the company open to a greater loss, new competition coming in and taking its customers away. Market penetration could be easier for a company depending its size, the strength of its name and image, and how loyal its customers are. For a well established global company such as Coca-cola, it would be much harder to take away its customers, than it would be for a smaller, less established company, but it is possible if the company, no matter its size or brand name, stretches itself out too thin trying to be too many things to too many people at once. It’s a marketer’s job to notice when this starts to happen, and try to help the company reorganize itself and take steps towards reaching its primary target audience(s), before it looses them completely.