Social-networking sites are a highly attractive marketing medium, but they require a delicate touch, writes Bill Britt.
Imagine if TV worked in reverse, with people at home providing the entertainment, while the broadcaster and a few marketers sat back at headquarters, watching the way consumers interact with their brands.
In a sense, that is what social-networking sites such as MySpace.com and Bebo.com, which are predominantly peopled by young consumers, offer marketers: a mass medium that is, at the same time, personal.
It is a tempting arena for brands, as members provide details about themselves when they fill out the requisite forms to sign up for blog space, and once logged on, reveal much about who they are.
The concept also attracts brands that want to grow by word of mouth, as information is shared in a viral manner on the sites. Yet it is a medium largely untapped by UK advertisers.
Last week Bebo.com, whose communities are based around the schools or colleges their members attend, secured pounds 8m in financing to fund US expansion and the opening of a London office.
MySpace, meanwhile, recently moved Jamie Kantrowitz, its international senior vice-president of marketing and content, from the US to London to oversee the launch of a UK office. The company, which was bought last year by News Corp for dollars 580m (pounds 310m), is the best-known of such sites.
Launched on a minimal budget in January 2004, it now has more than 80m users worldwide. In April, the site, credited with propelling indie band Arctic Monkeys to fame, attracted the seventh-highest amount of internet traffic in the UK, according to comScore Networks.
Kantrowitz says social sites connect with a youth market that has become disengaged from traditional media. 'The typical MySpace user comes from an elusive demographic that is interacting less with traditional media and has grown up with total control over their media experience - from iPods to mobile phones,' he says.
The sites, which do not charge any user fees, have two main revenue streams: conventional banner ads, with MySpace claiming that it runs 10% of all such ads sold in the US, and 'branded spaces'.
Branded spaces are more lucrative than banner ads. Last week, for example, Burger King launched a 'King's Court' space on the US site, where bloggers can access 'gifts from the King' such as free downloads of episodes of News Corp-owned hit drama series 24.
So far, MySpace has not brokered similar deals in the UK, but with the opening of a London office, this is likely to change. The company says that its UK targets will be music and film brands, because of the territory's vibrant scene.
In March, digital media agency PHDiQ ran ads on MySpace as part of a campaign for Radio 1 created by Agency Republic. The activity backed a radio-listening interface, called Musicube, that allows consumers to share their playlists with others by slotting it into their blogs.
Richard Yardley, PHDiQ interactive media manager, says campaigns such as Musicube allow marketers to engage with specific communities in a contextually relevant manner.
'One of the main things social-networking sites offer is community,' he says. …