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Google, MySpace And The Segmentation of Social Networking Quickens.


Buried in Google?? quarterly results was a note saying that it was having a harder time than anticipated getting ad revenue out of MySpace. Surprise, it?? turning out that social networking is not the holy grail of advertising??eople don?? 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.


Steve Ballmer, Power Forward
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