Social Networking websites offer advertisers a unique opportunity to interact with both product evangelists as well as new customers. News Corp.’s MySpace allows marketers to purchase a product profile page for approximately $35,000. This cost is far less than a primetime TV commercial and it has the potential to be infinitely more effective.
Moreover, the marketing value of Social Networking sites has become increasingly more important. Advertisers are beginning to realize the usefullness in trying to reach hard to find teen and young adult demographics. According to Mediapost, 3 out of 5 children between the ages of 13-17 visit social networking websites on a frequent basis.
Here are some basic facts:
News Corp. bought MySpace.com this year for $500 million and with it, approximately 75 million dedicated customers who are predominantly between the ages of 16-34. This works out to be approximately $6.67 per user (at the time of purchase, it was probably more like $8.33). According to Steve Rubel, MySpace is still gaining about 220,000 new customers per day. MySpace also has 1.4 million profiles dedicated to marketers (at a cost of $35,000).
NBC Universal bought iVillage for $600 million, gaining approximately 14 million users who are predominantly female. This works out to approximately $42.86 per profile/person.
One might argue that News Corp. got the better deal and the more valuable user base. Are 14 million women in the 18-49 age group really as valuable as 50 million 18-34 year olds? iVillage may turn out to be one of the worst investments or rather, most overpriced investments in 2005. Perhaps Facebook will put itself on the block in 2006.
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CNN Moneyline: Don’t Believe the Myspace Hype
[tags] myspace, ivillage, facebook, steve rubel, marketing.fm, social networking, marketing, [/tags]