MySpace vs Facebook in Advertising ROI
By Anna Johnson on December 30th, 2008Ryan Hupfer’s recent guest post on TechCrunch provides an interesting comparison between MySpace and Facebook in terms of delivering an advertising return on investment (ROI).
Ryan is the Marketing Manager for HubPages – a kind of group blog where members earn recognition and money by publishing content on their ‘Hubs’ (content-rich Internet pages). In November 2008 he tested advertising on Facebook compared with advertising on MySpace.
Now, Ryan’s ‘test’ was hardly scientific. For one thing he spent significantly less money on MySpace ($225) than on Facebook ($3,119). For another, he ran text ads on Facebook and display ads on MySpace. Even so, his experience does provide some interesting insights into how the respective advertising platforms work.
In comparing MySpace and Facebook Ryan’s bottom line was to see:
“whether or not they make my life easier as a marketer and whether or not they give me a good return on my investment of time, money and attention.”
He specifically wanted to see the impact advertising on MySpace or Facebook had on two key metrics: the number of new people registering in the HubPages community and the number of Hubs they ended up publishing.
Looking at the results of the test (published in the TechCrunch article), it seems Ryan Hupfer was able to generate way more statistics from Facebook than MySpace.
In particular, he was unable to generate daily reports from the MySpace ad platform, MyAds. According to MySpace, however, daily reporting IS available.
Perhaps Ryan’s inability to derive daily statistics had more to do with difficulties in using MyAds system (which he talks about in the article) than with a failure of MyAds to provide daily data.
In any case, Ryan’s conclusion is that Facebook was easier to use, generated more helpful information, and generated a higher return on investment. Although the cost per click was higher on Facebook compared with MySpace ($0.44 compared with $0.27), the cost of acquiring a user was lower on Facebook ($5.11) than on MySpace ($8.03).
Some other interesting take-outs from Ryan’s test are the actual click through rates (CTR) he achieved on each site.
His Facebook CTR was 0.06 percent, while the MySpace CTR was 0.09 percent. These CTRs are actually lower than the general average CTR for banner / display advertising (See: ‘Banner Advertising: What’s a Good Click-Through Rate‘).
If Facebook’s average CTR is still 0.04 percent (as reported by ValleyWag back in March 7, 2007) then Ryan’s result is higher than average. Meanwhile, his MySpace CTR of 0.09 percent is slightly under the 0.10 percent I’ve heard is standard for that site.
While it’s definitely worth testing and tweaking ads to edge up CTRs for social media advertising (as with any kind of advertising), such CTRs are unlikely to ever be particularly high.
Nevertheless, as you can imagine, slight differences in CTR can make a major difference in the cost of acquiring a user (or customer).
All in all, I don’t think Ryan Hupfer’s test really tells us whether we should favor Facebook over MySpace or vice versa. As recently discussed, the two sites serve rather different audiences (See: ‘Facebook vs MySpace Users’).
And, as discussed, the types of advertising they allow is different. I would rather see more statistically relevant data before making any kind of conclusive statement about either network.
Nevertheless, I thank Ryan and TechCrunch for their article. Getting real numbers about various advertising media is extremely helpful for building a general level of knowledge and understanding about the various available advertising opportunities.
Sources: Ryan Hupfer, “MySpace v. Facebook Advertising Showdown. Which Platform Is Better?” TechCrunch, December 21, 2008, Nick Denton, “Facebook ‘consistently the worst performing site’,” ValleyWag, March 7, 2007
