MySpace: Worth it, or not?
UPDATE: What a difference five months makes in gauging the economic marketing worth of MySpace to advertisers? If the "nuggets of wisdom" gleaned by Forbes from research presented by MySpace at an advertising pitch day held in Beverly Hills to target its marketers' ad budgets is any indication:
When a MySpace user talks, her friends listen. And when a MySpace user talks about your brand, your advertising dollars go far.
How far, exactly? Last November (see below) I reported on challenges underscored at AdTech NYC by Sarah Fay, President, Isobar, in measuring the effectiveness of online social networking spends to justify their worth to marketers: “We struggle with valuation of the metrics,” Fay said, discussing an Adidas campaign at MySpace, in particular.
Struggle no more? So says Isobar in conjunction with MySpace now, sort of. The companies commissioned research to tout a "new metric coined": Momentum Effect, designed to quantify "the impact of a brand within a social network beyond traditional advertising impressions to encompass the 'pass along' power of consumer-to-consumer communication."
Fay, nevertheless, implicitly acknowledges the still challenging sale of MySpace to hard ROI driven marketers:
Advertisers still "need to take a leap of faith with social-network programs" because some of the extra "momentum effect" will not be quantified for every campaign (as cited by AdWeek).
NOVEMBER 11, 2006: MySpace, What are 62,171 friends worth?
Fox Interactive Media touts MySpace co-founder Tom Anderson’s 100 million plus “friends” as its greatest assets. But how much is each friend really worth?
In “Web 2.0 ROI reality check,” I put forth diverse calls for hard ROI metrics in the online social networking space heard at Ad:Tech this past week.
Carat Fusion is part of Isobar, a “global digital marketing services network.” Carat Fusion’s selling proposition to clients is that they:
Create marketing solutions that are compelling, unexpected, measurable and worth it.
According to Sarah Fay, President, Isobar, however, the group can not easily measure the effectiveness of online social networking spends and justify their worth to marketers: “We struggle with valuation of the metrics.”
In “Web 2.0 hype: Popularity without profits,” I underscore that the high usage of online social media properties by individuals does not fuel a commensurate ROI for the corporate owners of the sites and the shareholders financing the free-to-the-consumer services.
In the “Online Video Revolution: A Marketer’s Dream or a Consumer-Generated Mess” panel, Fay addressed the current disconnect between agency raw excitement for consumer generated media and marketers’ persistence in seeking to gauge social media spends via “old-school” ROI metrics.
Fay said major shifts in consumer behavior are spurring a “new game with new rules.” Social media marketing rules are not codified at present, however. Fay spoke of an Adidas campaign at MySpace to ask “What is value?” in online social networking marketing.
Fay indicated that most online programs do not result in “big numbers." When 55,000 (now 62,171) MySpacers "made Adidas their friend," she noted, all parties to the campaign were excited, except perhaps for the one footing the bill.
Fay concluded, “How do we get clients to value it?”
Many corporate marketers, and interactive agencies, are questioning the hard ROI value of social media marketing spends.
At recent industry conferences I have heard Coca-Cola, HP, Arnold, Mediaedge:cia...suggest that lack of a proven ROI in online social media, coupled with inherent brand risks in online social networking, deter marketing investments in MySpace, Facebook, YouTube, Google Video...As I report and analyze in:
"Coca-Cola: Will Google Sponsored Video sell cases of Coke?”
“Can Google, Fox turn YouTube, MySpace buzz into cash?”