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The Score: Crowding Out MySpace?

comScore Media Metrix
The Score: Crowding Out MySpace? comScore Media Metrix
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There is no denying the incredible growth in MySpace.com over the past year and its dominance among social networking sites. The site’s popularity has garnered so much attention that it has inevitably invited competition from other social networking sites. New sites are cropping up every month attempting to siphon away users from MySpace, but they have been only moderately successful in cutting into MySpace’s market share dominance.


A well-established social networking site poses a difficult barrier to entry for potential competitors because of the pre-existing network of people with whom to interact online. Because greater numbers of users at established social networking sites increase the audience’s networking capabilities, it can be difficult for a new networking site to get off the ground. Competitors have found that their best chance of survival in the market is to focus on a specific niche or demographic.



  • MySpace.com predictably skews younger with a composition index (CI) of 205 among 12- to17-year-olds (composition index represents the proportion of the given group within a specific site audience, compared to the proportion of that group in the total online population. A CI of 100 represents parity.) However, MyYearbook.com (CI 374) and Xanga.com (CI 246) show a stronger relative skew among the same demographic.


  • Facebook.com holds a strong relative advantage among the college-aged crowd (ages 18 to 24) with an index of 352.


  • Friendster’s niche appears to be among the “young professionals,” as persons 25 to 34 are more than twice as likely than average to visit the site. Hi5.com is the only other social networking site that people in this demo show an above-average likelihood of visiting.









Selected Social Networking Sites by Age
*Composition Index
December 2005







































Social Networking Sites Composition Index
Persons:
12-17
Persons:
18-24
Persons:
25-34
Facebook.com 120 352 52
Friendster.com 61 151 203
Hi5.com 153 185 105
MySpace.com 205 169 84
Xanga.com 246 132 65
MyYearbook.com 374 129 53
Source: comScore Media Metrix



Some competitors of MySpace are experiencing greater success than others, however. While a few competitors seem to be making inroads into the 12 to 17 demographic, MySpace is maintaining its position among other demos.



  • Growth among persons 12 to 17 at both Xanga.com and MyYearbook has outpaced MySpace during the past month. Xanga grew 29 percent and MyYearbook grew 44 percent versus MySpace’s nine percent growth among its core demographic.


  • Among persons 18 to 24, MySpace grew at a strong 34 percent pace over the past month to outpace every competitor except MyYearbook, which grew 43 percent. Facebook.com, which shows the heaviest skews to this demo, grew at 14 percent.

 




















































  Unique Visitors (000)
  Nov-05 Dec-05 % Change
Total Internet Persons: 12-17 16,507 16,637 1
MYSPACE.COM 5,925 6,437 9
XANGA.COM 1,628 2,093 29
FACEBOOK.COM 1,595 1,458 -9
MYYEARBOOK.COM 613 884 44
HI5.COM 556 460 -17
FRIENDSTER.COM 100 93 -7
Source: comScore Media Metrix

 




















































  Unique Visitors (000)
  Nov-05 Dec-05 % Change
Total Internet Persons: 18-24 20,963 21,313 2
MYSPACE.COM 5,106 6,831 34
FACEBOOK.COM 4,798 5,467 14
XANGA.COM 1,437 1,437 0
HI5.COM 680 711 5
FRIENDSTER.COM 275 295 7
MYYEARBOOK.COM 273 390 43

Source: comScore Media Metrix


*Composition Index represents the proportion of the given group within a specific site audience, compared to the proportion of that group in the total online population. A composition index of 100 represents parity.

The frenzy around social buying is palpable these days. With deals like 75 percent off a Pilates for Pets package, how couldn't it be? The real question remains: Is there heft beneath the hype? Let's see if our debaters think it's really wise for you to group on to this trend.


The brand: Leave it
The idea is smart -- give consumers a deep discount they can't refuse while sucking the life out of local businesses; they won't know any better. The idea was strong and worked well on a local level with two or three top-tier innovators in the space. That is, until more than 500 of them came along, and then the larger players started opening their database up to national deals. Once larger brands caught wind of the idea, all hell broke loose. All of a sudden, we have a whole new channel on our hands to navigate just like the ad network world of yesterday.


Social shopping cheapens brands, cannibalizes customers, and creates bad habits for consumers. I don't think Neiman Marcus or Apple will be doing a group-buy daily deal whatchamacallit anytime soon. That is because the company has a classy brand and strives to uphold the aspirational nature of its brands.


As soon as a brand does a large-scale deeply discounted daily deal, consumers see multiple signals. Is the brand having trouble? They might not have thought of buying from the company before, so they start to check out your competitors. And then starts the perception driver. The driver that they will only buy from you when you are on sale. Even when you wow them with your product at 80 percent off, they expect you to always woo them with your product at 80 percent off -- and you will probably have to if you ever want them to come back. They also tell their friends, "Go buy this product for X dollars, 80 percent off." Thus, the trail of cheap starts rolling in.


Not only will the new customers start off on the wrong foot, but your current customers will also perceive that they have been paying too much and begin to buy what they were already going to buy at full price -- for 80 percent off. The deal sites require such a steep discount that there is almost no way of getting around this. The technology is typically not strong enough to do very complex things like de-duping its list from your new customer list -- wow.


When your customers and prospective customers start to only buy from you or your competitors for 80 percent off or more, no one wins -- well, except for the social shopping site.


The agency: Love it
Clearly Google's $6 billion dollar bid to buy Groupon reflects Groupon's ability to make money off of businesses that use it, not for businesses that use it.


My friend Dan owns a chain of pizza joints called the Lanesplitter and was recently approached by LivingSocial to do a promo. "It sounds like a great way for me to lose a massive amount of money," Dan told me, "Am I missing something?"


Yes and no. If Dan takes time to do the numbers and is careful, he could gain widespread awareness for his new location (on San Pablo Avenue in Emeryville). If he's not careful, he could very well lose his shirt. I told him to pass.


But there's a reason that Forbes is telling us that Groupon is the fastest growing company ever. It's because the way people interact in a socially connected world has fundamentally changed forever. People like to participate, they like to give each other deals, they like to feel like they've won, and social shopping empowers them to do that.


And Groupon's not the only game in town. Many retailers are already experimenting with their own social shopping promotions. Taking advantage of social buying doesn't have to equate to giving 80 percent on Groupon or LivingSocial.


My brand antagonist makes great points about cheapening brands and creating bad habits, but there are loads of companies already doing that on their own by focusing their entire marketing programs on direct response and quantifiable ROI. Social shopping is a tactic, and one that marketers must use wisely like any other. But it's a powerful tool in the modern marketer's toolkit.

Love it or hate it, you'd have to be under a rock to have missed the media buzz about check-ins and location-based services such as Foursquare.


The brand: Love it
What is the best way to identify loyalists, spread word of mouth, and get them coming back without giving them any more than a sexy little virtual badge? For brick-and-mortar retailers and other marketers that are location based, this is one of the best opportunities marketers have under their noses today. For 2011, you will see marketers taking advantage of location-based check-ins more and more.


It is a great way to drive in store traffic with a press release or word-of-mouth sale. Gap has had numerous successes when it announced that a check-in on Foursquare would get the customer various discounts or even free jeans. With the true value of a Facebook posting unknown, marketers all agree there is value in word of mouth via Facebook and other social channels. When your friends see that you are shopping at the Gap, working out at a specific gym, or hanging out at a particular bar, it's like the brand being able to speak to prospective consumers but allowing their existing customers to do the work -- genius. Marketers in 2011 need to get creative about how they can use location-based marketing to drive in-store traffic.


When you use location-based check-ins to drive word of mouth, and loyalty, everybody wins.


Next big prediction: There will be a web-based version of Foursquare that is driven by where you are shopping online for e-retailers. There are some ways that this is currently happening organically online, but not in the way it is offline. It's a big opportunity in 2011.


The agency: Leave it
A year ago, I stood on stage at one of the iMedia Summits with a giant "douchebag" badge on the screen behind me and proclaimed that Foursquare would be the next big thing in digital. Some think I was right.


I don't.


I'm bored of checking in. The novelty has worn off. I'm still intrigued by incentives based on where I am, but on which of the two-dozen check-in apps should I check-in? That's frustrating.


And if I'm bored and frustrated with check-ins, so are other people.


Don't get me wrong. The ability to lure someone who checks in at the mall into your store through a Foursquare special is powerful -- but only if they check in. The potential for Facebook Places is huge. But there's no "there" there yet.


If you've got a big budget, experiment away. But don't expect check-ins to have a major impact on your business in 2011.

The idea of having a party without even having to pick out an outfit sounds great. And to more than 200,000 mommies, getting rewarded for being social while going to parties sounds even better.


The brand: Love it
Three hundred or more customers and prospects constantly tweeting about your brand, trending higher than a movie release on Twitter, paying someone to administrate the party, and attending in your pajamas -- sounds like a marketer's dream. The cost is minimal, and the benefit is great. The modern Tupperware party is underway, but the attendees feel less pressure to buy; they just chat.


It goes like this: An administrator (perhaps, a blogger) or even the brand notifies its customers or prospects of the upcoming Twitter party, or other social party. (There are other ways to do this off of Twitter, but it seems to have caught on there first.) Promises of female bonding, prizes, and great tips and tricks that will make the party-goers lives easier are made, and customers are told that it will only take an hour of their lives. Attendees RSVP and comment up to the big event. When it's time for the big event, the administrator kicks off a question related to the topic at hand. Attendees fire away at everything from random conversations, useful bits of information, and even begin to make friends. The hash tag is usually the brand name, so when you take all of those attendees, and their followers, you have a pretty powerful word-of-mouth campaign, all for a few thousand bucks.


Sounds like a pretty strong ROI to me, and it's good for the environment.


The agency: Leave it
This does sound like a marketer's dream. The problem: What happens when it's time to wake up and execute?


When people tweet to win stuff, it's transparent. Impressions might be made, but the folks on the other side are rolling their eyes.


And do impressions equal eyeballs on Twitter? I'd call it a good day if I saw one in every 10,000 tweets my followers blast out in a day -- and I tweet a lot.


Having a burst of social activity on Twitter sounds great and is obviously cost effective, but I don't think it's going to move the dial too far. If the name of the game is scale, Twitter parties sound more like play dates to me.

Web-enabled television will blur the lines between the web and TV more than ever. TV is finally coming into the web world and will never look back.


The brand: Love it
Since I have been in the online media business, it has always been the online vs. offline wars, and TV was always known as an offline, siloed marketing channel. Finally, what we have been waiting for is here: a world where web and TV are no longer two separate channels. In this world, brands know more than ever about their consumers and can help them in so many new ways.


Imagine a show that features a product the consumer is interested in, and they have the ability to store that product into a list of things to go back to later, or a wish list of sorts. In their free time, they review their list, and your product or service is sitting there, waiting to be purchased. Even better is a TV show watcher who can buy the sweater off their favorite celebrity's back, by using technology to allow them to order it right then and there. TV and web are no longer siloed, and brands will be able to take advantage of this in so many ways. Gone are the days of GRPs and brand awareness on TV. In their place are watch-to-purchase rates, watch-to-save rates, and many new forms of metrics that brand marketers can embrace.


The agency: Love it
I'm so excited about interactive TV-- I feel almost giddy about it. It's like we've been given a blank new canvas upon which we can design interactive experiences that stretch our imaginations to new limits.


The notion that we will be able to transform the passive act of watching television into immersive and interactive experiences is exciting for two reasons.


First, integrating content with apps will lead to all sorts of innovations that no one has even considered yet. When I got my first TiVo a few years ago, it transformed my lifelong relationship with my television overnight. Combine Google TV or Apple iTV with an app store full of possibilities, and I'm looking forward to that relationship being transformed all over again.


Second, the majority of advertising budgets are still focused on traditional channels because of the scale and ease of buying. Combining the power of digital experiences with the reach of television will cause complacent marketers to reconsider how they spend. The race to the future is being accelerated.

Why are children always so happy? Because they play. Everything in their lives is about playing and having fun. It's what drives them. As adults, we lose all sense of play; we take life too seriously, and we focus on the negative. Gamification has been defined as the application of game technology and game design outside of traditional "game spaces" and the acceptance of games in non-gaming sectors -- essentially turning work and everyday activities into games.


The brand: Love it
The human race is naturally competitive, so this is good for marketers. When someone is willing to compete and to be sponsored by your brand or to compete with your brand for an award, not only will they talk about it in social media outlets, but they will be immersed in your brand presence.


People love reasons to socialize, and turning everyday tasks into a game gives consumers something cool to talk about. Giving rewards or checkpoints for each purchase they make, or even rewarding them for walking into the store, will give them something to get excited about. With My Coke Rewards, Coca-Cola figured this out years ago, and so has the travel industry.


Gamification drives more engagement and loyalty to a brand and warrants a more natural word-of-mouth effect. Give your customers something to play, and it takes them back to childhood when things were fun.


The agency: Love it
When I was in college, I drank a lot. And when I drank a lot, I smoked. And when I smoked, I collected Camel Cash.


Camel Cash was a brilliant marketing ploy. You bought cigarettes and in the pack was a coupon for Camel Cash. You collected Camel Cash, and then you could trade them in for Camel stuff (I got a set of Joe Camel darts). People were going nuts over them. It was part loyalty program, part box of Cracker Jacks.


Then somebody realized that this game was killing people faster, so Camel had to stop. But it was fun while it lasted.


Today, 80 million people play FarmVille. That's an awful lot of people leveling up, topping off, growing crops, and feeding pigs (or whatever the hell it is they do in FarmVille).


Many brands love direct response marketing. It drives revenue because it appeals to the most obvious of human motivations: the desire for a deal. But there are other things that motivate people: the desire to help others, the desire to be recognized, and the desire to win.


Game designers have long recognized this and designed engaging experiences based on these motivators. Now, innovative companies like Bunchball make it easy for brands to "gamify" their own loyalty programs and create experiences that drive people to engage on deeper and deeper levels.


The brands that invest in gamification in 2011 will, well, win.


Katelyn Watson is online marketing manager for Shutterfly. Adam Kleinberg is CEO of Traction.


On Twitter? Follow Watson at @katelynwatson. Follow Kleinberg at @adamkleinberg. Follow iMedia Connection at @iMediaTweet.

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