| The widespread adoption of high-speed Internet services has allowed for the leveraging of rich online media content as a sales and marketing delivery system. And the popularity of social networking sites such as MySpace, Friendster and Facebook and others has proved a boon to interactive marketing. This report analyzes the demographics of such Web destinations as MySpace and Facebook, the various rich-media advertising methods being employed on those sites, and the long-term prospects for online advertising in the social-networking space. Eight tables and charts are included.
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EXECUTIVE SUMMARY
THE BEGINNING
PROMINENT SOCIAL NETWORKING SITES
The Early Stages: Classmates.com and others
Friendster
MySpace
Facebook
SHIFTING DEMOGRAPHICS
SOCIAL NETWORKING SITES AND BROADBAND ADVERTISING
Content Driven Advertising
Video Commercials
Content tie-ins
Viral marketing
“Get Discovered” Promotions
Interactive Advertising
Interactive Flash, Shockwave and Java ads
Click-to-talk
Rich Media Advertising
LOOKING AHEAD
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Social networking sites to consolidate, become lucrative ad-revenue generator,
Pike & Fischer concludes in new report
Silver Spring, MD, November 15—Social networking sites such as MySpace and Facebook are serving as
a lucrative platform for advertisers to deliver interactive, rich-media promotions. But the number of those sites will consolidate over the next two years, leaving advertisers with fewer – but potentially larger – online communities for their promotions, market research firm Pike & Fischer concludes in a new report.
Entrepreneurs are continually trying to exploit niche interests with the launch of specialized social networking sites dedicated to everything from dogs and cats to vampires and hip-hop music. A number of competing sites are vying for the same user-base by appealing to these special interests, all in the hope of a multimillion-dollar buyout like News Corporation’s recent acquisition of MySpace. These sites are also
trying to compete for advertiser dollars with varied levels of success, and advertisers are trying to get the maximum traffic for their ads by employing interactive video and other broadband-enhanced features.
But, as signaled by Google’s $1.65 billion purchase of online video-sharing site YouTube, most social networking and content sharing Web sites will be tied to or owned by a handful of major broadband service providers within the next two years, Pike & Fischer predicts in its new report, “Rich-Media Advertising on Social Networking Sites.”
“Niche players who appeal to specific interests, lifestyles and vocations will eventually face a shakeout in the market,” says Pike & Fischer senior analyst Tim Deal, “resulting in the survival of a core group of sites with high functionality, seamless usability, expanded interactivity, and highly efficient and
integrated advertising business models.”
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Tim Deal
Tim Deal serves as our Senior Analyst, with a special focus on broadband-enabled consumer electronics devices and on emerging mass market applications such as online video sharing and VoIP-optimized e-commerce. Tim has developed SWOT analyses on such products as the iPhone, the Apple TV service, and rich-media applications on such social networking sites as MySpace. Tim has been providing detailed and actionable competitive intelligence analysis to leading technology firms for more than seven years. In that time he has authored more than one hundred comprehensive syndicated reports and an equal number of custom financial models covering the computing, consumer electronics, digital media, and storage industries. Prior to his career in competitive intelligence, Tim served as a counterintelligence/human intelligence and force protection analyst with the United States Army. Tim lives in the Seacoast area of New Hampshire. Contact Tim at tdeal@pf.com.
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