Sites like MySpace and Facebook have made
progress with some advertisers by the sheer magnitude of
their traffic and audience. But it's a work in progress,
given advertisers' reluctance to associate their brands with
sometimes-inappropriate user material.
New technologies are on the horizon now to help social
networks appeal to these discerning advertisers.
RelevanceNow, for example, is an Australian start-up with a
technology it calls "social intelligence," an analytics tool
that can size up members of a community via their so-called
psychographics, which classify people's attitudes and
values, likes and dislikes. With the technology, a social
network could segment groups of people based on details
they've divulged in member profiles or blogs. The network
then could target an advertisement appropriate for a
specific group. The technology also could help identify
people in the network with certain needs--vulnerable
teenagers, for example--and then be used to invite those
teens to a group on building confidence.
"Social intelligence understands users' interests even if
they don't explicitly say (what they are)," said
RelevanceNow CEO John Zakos, who previously helped develop
search technology at the company Mooter.
This is no easy trick. On social networks like MySpace only
a fraction of their millions of members participate in
affinity groups, such as those that cater to motocross fans
or sushi lovers, groups which could make it easier to target
ads. But if the technology works as intended, a site might,
for example, show an ad for a local sushi restaurant to a
member of the sushi-lovers' group.
Such targeted ads typically garner higher responses from
their intended audiences, and thus cost the advertiser more
money. As it is now, general site-wide banner ads can
dominate social networks, and those banners typically sell
for lower rates.
"Those guys are getting such low CPMs (cost per thousand
ads)--that's true of Friendster, MySpace and Tribe," said
Paul Martino, the founding chief technology officer of
Tribe.net He left to found a new ad-targeting company,
Aggregate Knowledge, in 2005. "Not many advertisers want to
be up on user-generated sites, because it's not where they
want their brands to be. Having these affinity-based matches
might be a way to bring in advertisers who are leery of
social networks."
MySpace's hefty take
Still, MySpace, as the giant of social networking and one of
the top five most-trafficked sites online, seems to be
holding its own in the ad marketplace, drawing movie and
food marketers that want to appeal to younger generations.
MySpace commanded almost 15 percent of the estimated share
of image-based advertisements sold online in September (not
including sponsored links or search ads), according to
Nielsen NetRatings' AdRelevance. That was up from roughly 7
percent in September a year ago.
Nielsen doesn't estimate sales figures, and MySpace parent
company News Corp. does not break out advertising revenue
for the social network.
MySpace has also increased sales of customized advertiser
profiles for companies like Wendy's and Burger King. These
profiles often feature fictional, company-created characters
whose age, likes, dislikes and personalities fit in with
those of prospective customers. In one example, a
company-created member profile for "The King"--a character
featured in Burger King ads--can sell for anywhere between
$500,000 and $1 million, according to a company
spokesperson.
Such advertiser profiles could get more sophisticated, too,
with technology from RelevanceNow. The privately held
company makes so-called chat-bot technology that could be
used to create specialized virtual characters with which
fans can have an instant message conversation. The
technology platform, which it calls My Cybertwin, includes a
number of set personality profiles, like "cheeky" or
"happy," that RelevanceNow can customize into a character or
corporate mascot. For example, it could create a Bart
Simpson character that fans could chat with online.
|