Monday, July 17, 2006

Why MySpace doesn't work

A lot of flurry out there over the new social community sites, which is a good thing. Maybe now, people will finally pay attention to what we at our have been doing for years: harnessing user bases for brand growth and profit.

Yet there are still those who think that "social" networking is going to do the trick. It won't. Lately, I've been getting a ton of people asking me about MySpace. Here's one interview that should set the record straight:

QUESTION: Is a small business or organization having a MySpace page useful? What makes it useful?

ANSWER: Almost never. And there are a few reasons why that is. First, MySpace has only one thing really going for it: eyeballs. Lots of eyeballs. But simply having eyeballs isn't nearly enough. If you recall, that's the mistake people made which led to the internet bubble bursting. Just because you have tons of people doesn't mean you have an audience. Witness the demise of and other domains that were supposedly gathering spots for people. It doesn't work that way. For a community to really succeed (and our does this in spades), it must have four elements:

A. A central, specific common interest among its users
B. A means of generating revenue through that interest (brand strategy)
C. A system to establish its credibility
D. A strong, visible leader to manage the community

MySpace in particular has none of these. The users are free to create multiple personalities. There is no verification of anything. There are no true means to focus any users into any kind of channels. There are no user-driven revenue sources. There are no leaders or managers - it's a rudderless ghost ship with the inmates running the asylum, so any business either having a page or advertising there is simply taking shots in the dark.

Worst of all: there are almost no qualified buyers of anything (see below).

That having been said, there are alternatives to MySpace (almost all the viral video sites, but YouTube in particular) that can recognize benefits from the web's viral potential.

In short, the smaller the business, the fewer resources it has, which means whatever they do should work the first time. MySpace is hardly that. The biggest mistake small businesses make is thinking that free is good. It's not. It's just free.

QUESTION: Who/what type of business could benefit most from a MySpace page?

ANSWER: At this point, the "alternative" products are the ones that do best. Items that get "discovered" by the cool/groovy crowd are what MySpace does best. The problem is that market is largely unpredictable and often both short-lived and flighty. Fashion and music do well there, but forget about those guys in suits trying to peddle their new soft drink.

QUESTION: Where do you see this emerging trend of businesses and groups using the site as an advertising/marketing tool going?

ANSWER: Well, MySpace is going straight to the bank, because nobody is calling them on any of this. The advertising agencies are able to sell a program like this to their clients because it's new and totally non-accountable - and clients know even less than their ad agencies do. In fact, I'd dare anyone to show you real, data-driven proof that their MySpace program did anything to improve sales or even inquiries.

The one great thing about MySpace is that it is helping to advance the cause of true Branded Communities®, which we've been advancing for years. We love the fact that people are finally accepting the notion of gathering users together and generating revenue through their common interests. That's where the real sales and customer evangelism for legitimate products and services are.

QUESTION: Can we expect to see large companies, such as GM, have pages (or pages for their individual products, such as a Hummer page)? What would you expect the "MySpace community" reaction to that to be: backlash?

ANSWER: You can definitely expect all the big boys like GM, Coke, McDonald's and the like to try it. But it will be amusing, at best, sort of like watching old people trying to do the twist back in the 1960's: laughable, at best.

Again, MySpace is for young kids who have little, if any, real buying power. So not only are the corporate giants going to be sniffed out and laughed out, even if they do make some sort of noise, there aren't any real customers there. Remember, a big chunk of MySpace users are lying about themselves 100% of the time. Who'd want to commit resources to such a low probability audience?

QUESTION: Do you see any advantage for the very small mom-pop operations? From some of the local folks I've talked to, they've had some success in using their MySpace pages as a sort of virtual billboard ˜ advertising things like bands, events, etc. This mostly has been bars, galleries and radio stations. Other small operations use the profile page to drive traffice to their Web site.

ANSWER: Well, truthfully, what are they going to say? That they've spent time and money to no avail? Push them harder and see how much in sales and what kind of traffic they've really gotten.

Mom and Pops are a wholly different breed ( They're not even close to micro-businesses and way below the radar from small business. Remember, they're starting out from absolute ground zero, so ANYTHING they get is better than what they've gotten in the past.

MySpace is at best, like chicken soup. It can't hurt, but it's doubtful how much it can really help.


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