Digital media executives watched throughout 2006 as Web 2.0 asserted Internet users’ creative independence from the media giants. And by November, it was nearly a fait accompli.
That was when comScore Media Metrix showed that, for the first time, page views for News Corp.’s Fox Interactive Media, driven largely by MySpace, outstripped those of venerable Internet brand Yahoo. While Yahoo showed a 9 percent decline in page views, to 38 billion, FIM showed a 2 percent increase to 39.5 billion. The spread widened in December, with FIM posting 41.5 billion page views, while Yahoo tallied just under 36 billion.
While there are obvious caveats with any measure of Internet audience—the FIM number includes properties besides MySpace, and Yahoo has some social-networking sites—the numbers show where the prevailing traffic winds are blowing. They are going in the direction of properties that allow users to connect with other users and create their own content. For advertisers and media buyers, the next step should be to simply follow the eyeballs and soon a proportionate number of ad dollars will flow toward MySpace and its competitors.
But some re-engineering may need to take place before that happens. Measured by statistics such as page views, the biggest social-networking sites certainly rival the longtime biggest sites on the Web. But a closer look at their traffic shows that, in fact, they differ markedly from their older competitors. Unique audiences are smaller, and the number of page views per person—especially among the youth demographic that accounts for most of the traffic on sites such as MySpace and Facebook—tends to be much higher. So, while social media rewrites rules of content creation and distribution, it is also poised to revise the analysis around which metrics are important when evaluating advertising properties, as well as what constitutes a successful ad unit.
That causes hesitation among advertisers who use online to energize CPM-driven campaigns. “For advertisers who have a very strict cost-per-acquisition, we tend to not go toward social networks,” says Adam Kasper, svp, director of digital media at Media Contacts, the interactive media unit of Havas. Adds David Cohen, U.S. director of digital communications for Interpublic Group’s Universal McCann: “I don’t think most of our advertisers are looking at social networks just for eyeballs.” The shop’s clients have bought profile pages on MySpace for Sony Pictures and the U.S. Army, among others, in what has become an increasingly popular marketing venture. However, it’s not one that takes advantage of the site’s raw numbers in the same way that a home page buy on a major portal does.
A closer look at traffic numbers makes it easy to see why media planners may never treat sites like MySpace or Facebook the way they do other mass market online properties. For one, there’s the ratio of unique visitors to page views. According to data from Nielsen NetRatings (like Adweek Magazines, a part of the Nielsen Company), an average visitor to MySpace during December cycled through 500 pages of content and spent one hour and 52 minutes on the site. The typical Yahoo user—someone who uses email and checks stock quotes hourly—had only 290 page views, but, with more than 110 million unique visitors, Yahoo had almost twice as many visitors as MySpace. Yahoo users also spent almost 50 percent longer on that property, averaging slightly more than three hours per person. The MySpace audience is spending less time per page, going through almost 4.5 pages per minute, as opposed to 1.6 pages per minute for the Yahoo audience.
The value of social-networking traffic data is very much in the eye of the beholder. Judit Nagy, vp, consumer insights for FIM, sees all those page views and concludes, “There are many ways to reach a person” on the site. Others see it as evidence that people who go to social-networking sites are not in the mood to look at ads. “They’re not disposed to look at these ads in that environment,” says Curt Viebranz, CEO of Tacoda, which to date has not added social networks to the portfolio of properties in its online ad network.
Even as social-networking properties make gains in ad revenue, they lag behind more established sites. In an appearance earlier this month at the McGraw-Hill Digital Media Summit, News Corp. chairman and CEO Rupert Murdoch said MySpace was generating almost $25 million in ad revenue per month and growing at almost 30 percent per quarter, which would put its ad revenue in excess of $450 million by year’s end. Yahoo had almost $1.5 billion in ad revenue in the fourth quarter of 2006 alone.
Does that mean that page views on Yahoo are therefore worth more to advertisers than those on MySpace? The short answer is yes, but if advertisers and social networks can get better at leveraging traffic to build deeper connections with users, page view numbers may lessen in importance. (Yes, social networks do sell banners, buttons, streamed video and search ads, but they aren’t the revenue drivers they have been for earlier sites.) After all, what those numbers represent is the ultimate technological expression of word-of-mouth, where people make connections to other people, entertainment and services through the most massive chat rooms ever built. And most of the online ad industry’s metrics don’t really get at that. “What MySpace can really offer is the engagement value,” says Nagy, who, previous to joining FIM, worked at Yahoo.
Just as the foundation ad unit of a portal is the banner, for a social-networking site it’s the profile page, an area devoted to one advertiser. What those areas offer can be as varied as advertisers themselves, but what they share is a desire to integrate themselves into the social-networking environment. Universal McCann’s MySpace profile for the Army (myspace.com/army) gives users the ability to chat with the virtual Sgt. Star, play video games and download podcasts. The real difference from an advertiser’s main Web site is in features that allow the profile to make friends and receive comments. As of mid-February, the Army has 13,128 friends ranging from wannabe pinup girls to enlisted personnel.
Burger King’s long-running profile of The King (myspace.com/burgerking) has 135,360 friends. Its popularity can be attributed to the ways King makes his friends. For instance, his profile page offers free downloads of the Fox series 24. There have been 800,000 streams and downloads of Fox series so far, according to Tia Lang, manager of media and interactive for the Miami-based Burger King. “What we look for in terms of the social-networking sites is to focus on our super fan,” she says.
Clearly, an advertiser’s comfort level with using friends and other connectivity measures as metrics depends on its objectives. No one, from agency executives to officials at the social-networking sites, believe the current state of measurement is enough—it will have to improve before these sites become advertising juggernauts. “I’d like to see some ad engagement metrics from social networks,” says Chad Stoller, executive director of emerging platforms at Omnicom Group’s Organic.
MySpace says it is working on a number of projects to better track the word-of-mouth that travels through its site. Mike Murphy, chief revenue officer of Facebook, which last September opened its site to registered users beyond its core college audience, says new technologies and ad offerings on the site make it possible to do just that. Using News Feed and Mini-Feed, technologies that the company unveiled to users in September, the site can now send constant updates on people within an individual user’s network to their home page. “It’s a ticker of news of what’s going on with your 140 friends,” Murphy explains.
Facebook extended the program to advertisers by incorporating something it calls “Sponsored Stories” into the feeds. If one of the stories is clicked and the user joins the advertiser-sponsored group it links to, the entire user’s network is informed and, theoretically, viral marketing ensues. The feeds show the activity of trusted friends, Murphy says, and because of this the site is seeing click-through rates of as high as 10 percent on Sponsored Stories.
The site, which had 4.5 billion page views in December, also has deals with washingtonpost.com and NYTimes.com to allow Facebook users to share content. It’s easy to see how these technologies can help measure engagement. Facebook can track not only how many News Feeds ran a Sponsored Story, but whether the message was passed on virally.
Murphy says that impressions created virally have a higher worth because the impression is created by friends. The simple click-through “can’t be enough of a measure,” he says.
That should intrigue any advertiser looking to reach the hard-to-pin-down youth market, but the push by social networks to monetize their unusual metrics could have even more resonance with smaller social networks. These sites, focused on specific interests that attract older audiences (age 35 and up), differ from the younger-skewing networks in that it’s an online representation of the nesting instinct instead of the singles bar freneticism of a MySpace or Facebook. Those who go to sites like Gather.com, which builds networks around people’s passions, spend less time on the site and have fewer page views per person. They are focused on a particular connection they’d like to make and then they leave. “Adult audiences have a higher [need] for return on their investment—their investment being time,” adds Tom Gerace, founder and CEO of Gather.
In late October, Amtrak launched a group on Gather for people who are passionate about train travel called Amtrak Presents: All Aboard! At 4,227 members, it is one of the largest on the site, advertiser sponsored or not. With 1 million monthly unique visitors, Gather is much smaller than MySpace. But because over 70 percent of its audience is college educated and in the 30 to 59 age range, it has a comfort level for certain advertisers that the bigger, youth market social networks don’t. For Amtrak, which generally uses the Internet for transactional marketing, Gather is the only place it is running a sponsored group. “We’re getting them engaged in a conversation,” says Gail B. Reisman, senior director of integrated advertising and East field sales for Amtrak.
With advertiser-sponsored groups, a site’s overall page views hardly matter. The more important metric is the hard-to-define depth of the connection the advertiser makes with users.
As social networks, large and small, become better at creating and defining connections with advertisers, it’s easy to see how size may begin to matter less, diminishing the importance not only of the page view, but eventually other metrics, such as unique audience, with it. The more important issue will be whether the advertiser is reaching the right audience. Because in marketing, it’s all about making the right friends.