Google, MySpace And The Segmentation of Social Networking Quickens.

Posted by: Bruce Nussbaum on February 4, 2008

Buried in Google’s quarterly results was a note saying that it was having a harder time than anticipated getting ad revenue out of MySpace. Surprise, it’s turning out that social networking is not the holy grail of advertising—people don’t like to have ads shoved at them when they are connecting. For this reason, there is a lot of defection going on in the social networking area, as people leave and set up their own gated social networks. If you want to advertise to them, you have to ask permission. This segmentation of social networking is topic No. 1 in the ad world and Critical Mass’ David Armano has been covering it insightfully for a while now.

One of the most interesting things I got out of a INside Innovation workshop with IDEO last year was the notion that communities (or "tribes" for the hipper terminology) have their own cultures and networks and you have to know them, learn them, and then ask them if you want to sell to them. These communities can be old ones--church groups or small villages at the bottom of the pyramid--or new ones, such as the runners who compose the Nike Plus network or the fancy gentry inside the gated social network of A Small World.

Permission must be granted by the people in these communities before they willingly accept advertising. In MySpace, that permission has not been granted so people are fleeing and spending less time there. Permission marketing is something Seth Godin gets. This is what he has to say on it:
"Permission marketing is the privilege (not the right) of delivering anticipated, personal and relevant messages to people who actually want to get them.

It recognizes the new power of the best consumers to ignore marketing. It realizes that treating people with respect is the best way to earn their attention."

Now here's a test for you. One of the most exclusive social networks on the planet is the Young Global Leaders group of the World Economic Forum. Check out these YGLers and let me know how you might do cultural anthropology with this group--and suggest what ads they might allow inside their gated, exclusive circle that includes Jimmy Wales, Gavin Newsom, Sergey Brin, John Battelle, Maria Bariromo, Vikram Chandra, Rajiv Bajaj and many others.

Reader Comments

Ben Joven

February 5, 2008 6:34 AM

That is why AdSense is genius and Google may have a perfect angle on the booming on-line advertising industry.
That's why I am glad that Microsoft is throwing their hat in the ring. It will slow down the stronghold and make way for more innovation and competitors such as myself.

Stuart Glendinning Hall

February 11, 2008 12:42 PM

I wouldn't bother serving up ads automatically with the YGLers. I'd do it through a human-based system backed up with tech, based on listening and learning what each individual wanted.

Tony Eyles

February 15, 2008 9:17 PM

Advertising would be a little insulting to the people who engage with the YGL group for a specific purpose. If you wanted to do business with them you'd be better learning about their group and offering something relevant and useful for them to try out. When they make up their own minds about your thing, and find it is great - they will advertise WOM for you - far more powerful.

vivian wimberly

February 16, 2008 7:04 AM

i really need a myspace so i can talk to my freinds

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Want to stop talking about innovation and learn how to make it work for you? Bruce Nussbaum takes you deep into the latest thinking about innovation and design with daily scoops, provocative perspectives and case studies. Nussbaum is at the center of a global conversation on the growing discipline of innovation and the deepening field of design thinking. Read him to discover what social networking works—and what doesn’t. Discover where service innovation is going and how experience design is shaping up. Learn which schools are graduating the most creative talent and which consulting firms are the hottest. And get his take on what the smartest companies are doing in the U.S., Asia and Europe, far ahead of the pack.

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