I find it fascinating that we have two trends occurring right now in the online advertising space which are working in opposite directions. First, we have consolidation of ad networks and ad platforms happening as fast as companies can get the deals done. AOL bought Quigo in the latest move in the Battle of the Online Advertising Superpowers. But at the same time, we now have individual publishers and social networks starting their own vertical ad networks all over the place. Myspace and Facebook have both announced such efforts in the past week.
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Search Results: Vertical Social Networks
Ad Networks and Platforms Everywhere!
Myspace and Facebook Losing Ground to Niche Networks?
I’ve posted numerous times about niche or vertical social networks, and how I think that Myspace and Facebook will lose traffic to them over time.
The WSJ has a story today talking about a slowdown in traffic for these two combined with anecdotal stories of problems and negative experiences. Essentially those problems boil down to it being too popular, too much spam, too much advertising, and “creepy experiences”.
Beyond these, I think that these sites still lack some utility for a large percentage of the population. As a married guy approaching 30, the only real use I have for Myspace is really to maybe find some old friends and send messages there instead of email. However, this doesn’t mean I’m a boring guy without any interests, it’s just that Myspace is so vast and large that really finding and interacting with my core interests while I’m in the mood to do so doesn’t happen.
Instead, I still find myself visiting community and content sites that are specifically focused to my interests. Most of these sites still operate in the older web model of content and comments or content and forums, but I’m already starting to see the shift towards making these sites into niche social networks.
Is it a pain to participate in numerous social networks instead of one or two big ones? Not really, think of all the various accounts we already all have at numerous sites. So instead of idling around Myspace, I can participate in a basketball social network, wakeboarding social network, or whatever else my interest at the moment may be. This is far more compelling to me, and I think we’ll see a shift towards people fragmenting their networks in this way. There’s a reason these niche sites exist in the first place, and it’s because an all-encompassing website can’t service every content area. The same holds true for social networking, Myspace can’t be all things for all people.
If I’m right this doesn’t mean Myspace and Facebook will die, far from it. I think we’ll just see their growth and influence slow and perhaps decline into a phase of maturity.
Here Comes the Niche Social Networks
A strange pair in Nike and Google have teamed up to launch a soccer social network called Joga.com. As I’ve talked about in previous posts, I think people will get tired of the vastness and general theme of Myspace and move more towards vertical or niche social networks that will be built to serve their passions and interests.
Even if they don’t tire of Myspace, I see an opportunity for entrepreneurs who create social networking sites or platforms for topics that they know and love. Myspace allows you to do some things, but obviously a social networking site built on soccer will be more attractive to soccer lovers, as there will be built in features that fit soccer along with knowing that everyone involved is interested in the same core subject.
What remains to be seen is that if this particular case will work. There are large corporate interests behind Joga.com in Nike and Google, so will users feel like it’s authentic and real? If it succeeds, won’t we see Nike/Google social networks in other areas? Soccer was a naturally first choice for it’s world interest, but it seems like the same formula could work for basketball, football, and whatever other sport Nike feels like starting a site in.
It’s still an open question in my mind if this particular site will succeed, but I’m pretty sure a well-done soccer site started that was very authetic and real would work. It’s possible that some will be turned off by Nike’s involvement. For example, if Myspace was started by a large music label would it have worked to this extent?
Either way, expect a lot more niche social networks.
Monetizing In Social Networks
In the last few hours two associates both pointed me to David Beisel’s post on Vertical Social Networks. Based on my previous post, obviously I agree with David that we’ll start to see niche or vertical social networks. I wanted to address David’s question about the monetization of these vertical social networks:
So the more niche and limited audience a given subject area, the less able the network is able to take advantage of this exponential effect. But I’ve also argued that in the long run, the value of the network is not only determined by the number of nodes in it, but in the ability for the network to monetize those nodes. The question then is that if there’s a greater ability to monetize niche subject areas than more general ones because of the passion and interest-level involved in some of them. The answer is probably that it varies from vertical to vertical, subject to subject.
I have data on these things that most observers probably don’t have handling thousands of publishers advertising, and I can say that general social networking sites can’t monetize each “node” or user as well as a niche site can monetize each one of their users. As an example, let’s take two sites with similar unique visitor and ad impressions that I have permission to talk about in detail.
The first is Whoomp.com. This isn’t a social networking site, but it’s got a similar demographic and general audience who’s interested in humor and entertainment. A lot of this site’s links come from social networking sites where people are sharing funny videos with their friends. This site averages somewhere between 1-2k in ad revenue a month.
Let’s contrast that with Wakeboarder.com. This is a specific vertical based on a sport/hobby, so the userbase is very focused in their interest. As I mentioned above, it has a similar unique user and impression level to Whoomp.com, but it will average about 4-6k in revenue from advertising. It also has other specific monetization such as ecommerce which is much harder to pull off on a less focused site.
While neither of these sites are social networks, if we changed these to Myspace vs. Wakeboarding Social Network Site, I can guarantee you that each user is worth more on the more focused wakeboarding site.
The lesson here is that specific niche social networks will not grow to the size of Myspace, but they don’t need to still be a viable business.
End of Q1 Web Predictions
The blogosphere was filled with 2006 web predictions, including my own. Looking back at mine, only one or two have come true thus far, but the year is still young. Now that we’ve already got reality for the first quarter of the year, it’s time for some quick End of Q1 Web Predictions for the rest of 2006.
1. Applications are ahead of the curve.
The Web 2.0 world will start to realize that some of the cool applications being built are fantastic, but still ahead of the curve. I think some examples of this are applications that I really like such as Newsvine and Edgeio. They are well made, but I don’t think there are enough sophisticated users yet to make these applications really take off. I’m not saying they won’t, but I think they’ll have slow growth until it really kicks in about two years for them. It’s a reason that it’s sometimes best to keep things simple. Digg took off because it isn’t complicated, it takes a lot more time to figure out how to get the most out of Newsvine.
2. We’re short on attention.
The early adopters that are using all these new web applications only have so much attention, so it will take more users to keep many of these businesses viable and growing. For example, I’ve tried out 10 social bookmarking applications, yet I only have time to use one. My mom will never use one, my daughters are still 10 years away from using one, and the majority of my coworkers in a technology industry still don’t use one. Basically, this means some will crash and burn.
3. The rise of vertical social networks will quicken.
Myspace, Facebook, and their brethren have really taken off over the past year and a quarter. We’re now going to start seeing them tighten some rules to appease advertisers and investors, and growing problems with things like the police, school administrations, and others meddling will stunt growth a bit and make them lose some “coolness”. Combine that with some getting tired of how large and unfocused they are, I think we’re going to see more social networks popping up for specific industries, topics, and areas of interest. Dogster is such an example that’s been around for a while for dog lovers. Joga from Nike/Google is an example of how we’ll start seeing social networks for sports.
4. Facebook will regret turning down $750 million.
I don’t see how they’re worth $1 billion, but maybe I’m wrong. I just feel like they’re not going to be able to get a better offer and should have taken the money while the space was still red hot.
5. MSN will release their contextual product to poor reviews and results.
MSN will release their adCenter contextual network to publishers, and publishers won’t like the experience or the results. It will be the 2nd major company to try and present a great alternative to Adsense that won’t quite deliver.
6. Google Calender will be good, which will be a shock.
Google’s upcoming calendar application will be good, which will be a bit shocking compared to some of their recent product releases which sometimes feel half-finished. 30Boxes will be okay, but others trying to enter the calendar space will be in trouble. What is 30Boxes business model by the way? Getting acquired? Premium options? Ads?
7. Blog networks won’t get acquired, but will realize their income isn’t too bad.
After the About.com and Weblogs Inc. acquisitions there was a whole bunch of blog networks that started up. Whether they were motivated by the acquisitions, I’m not sure, but I don’t think we’re going to see many more networks get acquired by larger players. However, due to multiple streams of income such as advertising, sponsorship, and affiliate programs, the owners will realize that it’s not too bad of a business.
8. Niche Ad Networks Will Start Popping Up
FM Publishing may have been one of the first, and in some ways blog networks are like them, but we’re going to start seeing niche ad networks being created by entrepreneurs who realize that large ad networks can’t focus on getting sites targeted deals in all the various industries out there. It’s not a business to build and flip, but a small team can make some great income by starting an ad network focused on one type of industry or site and maximizing that site’s inventory.
9. Content producers will start to realize the value of microchunking content, monetizing it with built-in ads, and letting it go.
While NBC did the wrong thing in forcing sites to remove the viral hit “Lazy Sunday” Saturdy Night Live video clip, it was a prime example of how microchunked content can spread, and the opportunity that exists for smart content producers. If NBC had immediately placed the clip on their site after the show with an ad or two built into it, they could have made a lot of money from that video being passed all over the web and viewed by millions. Instead, it got put out there without any monetization at all, although NBC still benefitted from the resurgence of interest in Saturday Night Live.
10. Bloggers will complain.
Bloggers will continue to complain about things such as the snarkiness in the blogosphere and what’s going on with their Technorati rating.
That’s it for now, let’s see what develops in the rest of 2006.
Why Are People So Scared of Myspace?
Jeremy Wright is scared of Myspace.
I agree with most of the points he makes about Myspace’s growth and the power it’s community has or may have in the future. There’s no denying it’s been a huge success and has a huge mindshare of the teen/young adult generation.
However, I’m not scared. Let’s address what he’s scared of:
MySpacers connect better than bloggers, get their friends into it better than bloggers, stay in touch more than bloggers, and form true sociological pods better than bloggers.
Are bloggers in a competition with Myspace users? Over what? Getting their friends involved? This seems like it’s a fear based on “saving the blogosphere” from Myspace. I know that currently very few Myspacers are posting about the issues i post about on this blog, so I’m not particularly frightened. Nor do would I be that frightened if they were posting about them, what’s wrong with some competition? Plus, isn’t Myspace free? There’s nothing that says bloggers can’t use Myspace as well. I think currently they just don’t want to or don’t “get it”. It’s like crying about something that they have equal access to use.
When we eventually have 100M people (primarily 10-25) on MySpace, how
does their culture affect other ‘cultures’ outside of MySpace?
There’s already a hell of a lot of people on Myspace. It’s already affecting the way young people network, meet others, express themselves, and communicate. As that grows larger, there may be more influence on outside cultures, but I’m not sure it’s been that negative so far. In some ways you could compare Myspace to the internet itself. The older generation of business leaders probably saw the internet much like people seem to be seeing Myspace right now. It’s like this “new thing” that they don’t get that is allowing people to connect, communicate, and do business in ways they couldn’t understand and feared. Wouldn’t most agree the internet was a good thing? Maybe those of us who are older than the Myspace main demographic should just work harder to understand it instead of fearing it?
When there are that many people, will MySpace’ers begin being elite?
Probably. This happens in almost every large group. I guess this is scary?
When will businesses begin seriously targetting MySpace (some are already)?
They are, and will continue to do so. Seems like more of a good opportunity than a scary thing though.
How will businesses effectively engage in conversations with Spacers
when so, so, so little of MySpace is broadcast oriented, and when
Spacers do so little searching for new connections?
Tapping into the nodes, earning their trust, giving them incentives to promote the business. Viral promotions? Or maybe simply buying advertising? It’s really much easier since they’re grouped now then if that demographic was fragmented all over the place. Again, this feels like opportunity to me, not fear.
What happens if MySpace goes down?
Maybe they’ll go back to watching TV?
At what point do services like
MySpace become so a part of the overall culture (due to people having
spent years on there AS WELL as because a significant portion of the
culture ‘lives’ there) that MySpace becomes a reflection of culture. If
that happens, do we need to backup MySpace? Similarly, should we be
backing up Google, as a point in time reflection of the web?
I’d recommend they back stuff up, and I’m pretty sure Google is probably backing itself up in various ways.
When will law-makers begin legislating MySpace?
It could happen at some point. I guess that’s scary, as you’d hate to see government mess stuff up. At the same time, the sexual predator fears on Myspace probably will require actions by someone. I’m strongly for actions that protect teens, I just don’t want government messing things up either. A delicate balance probably needs to be found there.
How would MySpace’s networks reform if MySpace went down? What would be
the impact on young people who are fragile and completely alone in the
world apart from MySpace?
It’d probably be difficult to reform those networks. That’s okay though, groups are broken up all the time. Life would go on. As for the impact on young people who are alone, they were most likely alone before Myspace as well. I’m not sure the answer to their problems is Myspace, so that’s just a problem that exists no matter what.
What kind of ecosystem can be built around MySpace (technology wise)?
That depends on what Myspace allows probably. I’m sure some good entrepreneurs will build businesses with technology around Myspace. YouTube and others have already benefitted quite a bit.
I am dead serious when I say that MySpace scares the hell out of me. It is, as we watch, making blogging obsolete. The technical elite that rule blogging now will soon be completely
dwarfed by the 20 somethings as they graduate, get jobs and begin to
gain influence. Blogging’s end is coming, and its name is MySpace.
What’s the value of a blog? It’s the opinions and knowledge behind the person who writes it. It’s the news they provide, the topical links they point you to, or the comments that results from their posts. Why does Myspace make that obsolete? I don’t think Myspace will make Scoble any less knowledgeable about Microsoft, or BoingBoing less interesting, or make Engadget have less tech product news. Maybe it will make various blogging platforms obsolete, or it’s creating a whole new generation of bloggers. So what? Times change, eventually the current A-list blogging guard will get replaced by a younger one. There’s no way to stop time. If this scares people, they should make sure that they also continue to gain influence, and appeal to younger generations.
MySpace, I’m sure, rocks to the people who are in it. And similar,
competing, services will grow up. Maybe the ecosystem will self-select
to the point of making all of my fears a moot point.
I’ve made this point before. I think that many people will get more value out of vertical social networks which are focused around specific hobbies, locations, and interests. Because Myspace is so broad, it can’t really build in features that a site could build to support a particular interest group. I don’t think this will kill Myspace, but I think it could slow it’s mass adoption, and eventually lead to people spending more time elsewhere.
But, what if it doesn’t. What if, eventually, every person between the
ages of 13-25 has a MySpace account and is at least partially active on
it to some degree. What happens to society, culture and them? How will
business and the culture outside be affected by that? What is the
impact on humanity if MySpace becomes intrinsically tied to the
identity of an entire generation?
What if everyone had access to the web?! What if we all had email accounts?! This seems like a similar line of thinking. Myspace is a tool to social network. Email is a tool to communicate. The web is a place to do many things. They are all tools we can use. I think the danger could be that Myspace is controlled by one company while the web and email aren’t, but this is still assuming Myspace goes on to dominate.
Instead of being scared, I’d say look at it as an opportunity.
Russell’s Myspace Post Cracks Me Up
Russell Beattie’s post on Why MySpace Scares The Crap Out of Me made me laugh. I’m not sure if it was the title or just his honest admission that he doesn’t get it because he’s an older geek. Either way, it was a great example of making a blog post that creates emotion.
Regarding what he’s talking about, I think a lot of the over 30 generation probably doesn’t get Myspace. Being that I’m 29 years old I think I’m right on the border of whether I should be getting it or not. I think I do get it, I’ve used it and compared it to other social networking applications, and although it doesn’t seem to be that attractive or designed well, it works for it’s audience.
It’s not as pretty as some of it’s competitors, but it’s audience didn’t want pretty, it wanted the ability to easily customize their own page and do stuff like post music videos and ugly background images. Friendster didn’t allow that back when it was hot.
It also used a specific area (music) to grab a bigger foothold then if it was totally generic. Now it’s grown beyond music, but I think focusing there first allowed it to get a really loyal following that actually had utility for using the site. Friendster never had much use besides dating or meeting people. The initial core base of Myspace users were forming communities arounds bands, which built a strong core following.
They’ve done other things right, but I don’t think Myspace is going to last forever. I think there’s more of a future in vertical social networks where people have an easier time grouping around like-minded subjects in networks that are built with useful tools around those subjects. Myspace has had success being general with some music tools, but other hobbies and subjects could have sites built with tools to help their users while still having a social network.
Maybe Russell would get that?
Will Facebook’s Climb Up The Display Advertising Charts Last?
From Silicon Alley Insider Chart of the Day
As seen in the image, Facebook is growing like mad in the display advertising space with a trajectory that is vastly different than any of the other major players in the space. That growth is borderline shocking, but shouldn’t be that surprising for anyone who’s been following their user growth as well.
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