Advertisers Still Prefer MySpace Over Facebook

Posted Nov 11, 2008

Facebook has tried many things to attract advertisers. Beacon was essentially a failure. Users did not want to share their external ecommerce activities with friends on Facebook. Facebook is also said to have a low click through rate on its ads. However, the site has had some success with sponsored groups and featured news feed ads.

Facebook’s newest attempt to woo advertisers is called “engagement” ads. Engagement ads are action based ads. When a user logs in, they may see an engagement ad that requires some kind of social action such as commenting on a sponsored group’s page. Once the user takes the action, the action is shared on their news feed with friends. The plan is to make ads go viral by sharing ad action activities with friends.

According to comScore, Facebook’s share of total US display ads is just 1.1%. That is a surprisingly small number considering the size of Facebook. MySpace on the other hand has a hefty 15.9% share.

Advertisers are still trying to figure out how effectively advertise on social networks. On Google, when you search for a keyword, you see related ads. Some of those related ads may be of products that interest you. On a social network, ads are based on demographics. But considering the diversity amongst social network visitors, demographic targeting is not as effective as it may seem.

Source: WSJ