Fresh & New(er)

discussion of issues around digital media and museums by Seb Chan

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MySpace downturn? Monetising issues

May 27th, 2006 by Seb Chan

Everyone is talking about Scott Karp’s article questioning whether MySpace is experiencing a downturn. There is a lot of anecdotal evidence both from Karp and others, but I think the strongest argument for the MySpace hype eventually running out of steam is that teens are always a very fickle market, and they are getting increasingly fickle.

As I (amongst many many others) keep pointing out in presentations, the real pull of MySpace is/was its stickiness as a communication platform/site. Once you set up a MySpace page then you had to keep going back to it to check if your ‘friends’ had ‘added’ you or you’d gotten mail etc. While this was genius while MySpace was/is ‘hot’ it will quickly become a big turnoff when/if it falls from favour.

The problems with ‘monetising’ MySpace through advertising versus, lets say advertising on Google, is that when people visit a MySpace page their motiviation is purely conversational – versus a Google search which is likely informational/information-seeking. The informational motivation can more easily be monetised through well placed advertising – advertising which offers to make easier your search for information (or cut through the plethora of choices with a simpler option).

Monetising the purely conversational is difficult.

I’d be fascinated to know how successful the advertisements that pop up in those ‘free telephone services’ that were written about a few years ago actually were . . . these were advertisements that interrupted your telephone calls (effectively the advertiser paid for your free calls by forcing you to listen to their advertisement).

Of course, these advertisements that intruded on your phone conversations were not able to be customised/personalised to the conversation topic in the same way that is now possible with conversations over the internet.

Google have been doing this very thing with their advertising that appears in your Gmail account – supposedly tailored to the conversation topics (content) in your email.

But does anyone actually click (or see) those advertisements?

Maybe the value of MySpace for its owners is purely as market research. But even that relies on its continuing dominance.

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1 response so far ↓

  • I must admit a few days ago I actually clicked on an ad that appeared in my Gmail account. It was a link to a South American travel site that was very relevant to the discussion I was having in the email (travelling to South America).

    I was actually quite surprised I even noticed it because over the years I have taught myself to tune out and completely ignore banner ads. I think the winning combination in Gmail is the unintrusive nature of their ads (unlike annoying flashing banner ads found in Yahoo mail) and of course the intelligent algorithm that pulls up relevant links for you.

    I think the main difference between ads in Myspace and Gmail is that the content on Myspace seldom changes. The most they can do is to look at your profile and attempt to serve up ads that you may find interesting. e.g. mobile ring tones of your favourite bands. But the content in Gmail is constantly changing and the content inside your email is a real-time snapshot of your profile that changes minute by minute. In an email you are more likely to ask a question rather than state something trivial about yourself. For example you may email a travel agent tomorrow about a quote therefore a link to some budget airline website is going to be far more attractive than anything else.