Monday, July 23, 2007

Forbes.com

Class War: MySpace Vs. Facebook

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Claire Cain Miller 07.23.07, 6:00 AM ET

A flurry of recent articles have observed that young people are leaving MySpace for Facebook in droves, setting off speculation that MySpace is becoming the latest victim of fickle teens following the hot new thing.

Not so, says University of California, Berkeley, researcher Danah Boyd. Not all teens are leaving MySpace, she wrote in a recent essay--instead, they're splitting up along class lines.

Boyd confirms what teens in any high school across the country already know: Affluent kids from educated, well-to-do families have been fleeing MySpace for Facebook since it opened registration to the general public in September, while working-class kids still flock to MySpace.

That could have big implications for advertisers targeting the coveted teenaged population online, three-quarters of whom have a profile on a social network. Both sites have been powerhouses for advertisers because of their huge, wide-reaching audiences, says Robin Neifield, chief executive of interactive marketing agency NetPlus Marketing. That strategy could change if the sites become more like the niche social networks popping up across the Web for groups of like-minded people from similar backgrounds.

Boyd's essay came amid speculation about the future of the social network giants. Despite the fact that MySpace still gets more than twice as many unique visitors as Facebook, it's littered with postings announcing that users, often teens, are switching to its rival.

The number of Facebook visitors ages 12 to 17 jumped 149% over the past year, while MySpace lost 27% of teens, according to ComScore Media Metrix. Rupert Murdoch, whose News Corp. owns MySpace, even lamented in an interview that he was losing readers to Facebook. News Corp. is rumored to be considering swapping MySpace for a 25% stake in Yahoo!.

Estimated ad revenue for 2007 calendar year for Facebook is $125 million, $525 million for MySpace, according to research firm eMarketer. Together, the two account for 72% of all online advertising on social networks.

There's a reason why the "goody-two-shoes, jocks, athletes or other 'good' kids" are going to Facebook, says Boyd, who studies social networks and youth culture and made her observations based on formal interviews with 90 teens, informal interviews with hundreds more, and the perusal of tens of thousands of teens' online profiles.

Facebook launched in 2004 as a site for Harvard students. Gradually, it opened up to other college students, then to high school kids if a college student invited them. "Facebook is what the college kids did. Not surprisingly, college-bound high schoolers desperately wanted in," Boyd writes.

MySpace, meanwhile, is the "cool working-class thing" for high school students getting a job after graduation rather than heading to the Ivy League, Boyd writes. Constant local news stories on predators targeting kids on MySpace further alienated the "good kids," she says. Both companies declined to comment on Boyd's essay.

Her analysis could help marketers figure out which sites to target--help she says they desperately need. "Many of the advertisers that I have met are extremely savvy about offline marketing but complete fools when it comes to online marketing," ignorant of who visits Web sites and why, Boyd wrote in an e-mail interview with Forbes. Paying attention to demographics could help. Hot Topic should target MySpace, for example, while J. Crew should focus on Facebook.

"As an advertiser, in my opinion, Facebook users are more qualified to convert and more apt to buy a shirt, so I would go there before MySpace," says Josh Mohrer, director of retail for BustedTees, an online purveyor of hipster clothes and sometime Facebook advertiser.

Facebook can lure advertisers with its affluence, says Bill Tancer, general manager of global research at Hitwise, an online marketing analysis firm. His data backs up Boyd's conclusions that Facebook users are richer than those on MySpace. Still, MySpace attracts so many more viewers that "there's no way marketers are going to leave," he says.

NetPlus chief Neifield says she's not paying too much attention to Boyd's observations. Advertisers should look beyond demographics when placing ads and instead analyze online behavior like who visited other sites with similar content, who downloaded what or who clicked on which ads, she says. "It's not very often these days that we buy based on demographics alone."