Ryan 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.

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Netpop’s recent research about social networkers revealed some interesting differences between Facebook and MySpace users. And the difference may NOT be what you think…

Think MySpace is for kids and Facebook for college students and grads? Not exactly.

NetPop’s research shows that while Facebook users tend to be aged 18 to 29 years old, MySpace users span all age groups. And while Facebook users do tend to have college degrees (74 percent who do versus 56 percent who don’t) they are also less likely to be married than MySpace users.

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eMarketer has issued its hit predictions for 2009. Here are some of its forecasts for the new year:

• Despite the economic downturn, video ad spending will rise by 45 percent to reach $850 million.
• Search marketing spending will increase by 14.9 percent to reach $12.3 billion.
• Total U.S. Internet ad spending will increase by 8.9 percent to $25.7 billion. This will be the lowest year-over-year increase for online advertising to date, but will still constitute a higher growth rate than most other media.
• Online retail sales (excluding travel) will grow by just 4 percent as a consequence of the economic downturn.
• E-commerce will be a growing revenue stream for social network sites. Both MySpace and Facebook will expand their self-serve advertising systems to allow members and businesses to buy and sell products and services.
• Smaller and niche social networks will face difficulties - with some failing or being bought by others in the face of declining ad revenues. Corporate and brand-focused social networks will fail to gain (or lose) traction and likely close altogether.
• Twitter will be acquired and its acquirer will use its infrastructure to offer targeted marketing and analytics to advertisers.
• Television will fragment further and this, combined with lower viewership and lower ad spending will increase the pressure on networks to test new business models, including offering more online content.
• Online ad-supported video will grow, especially as YouTube expands its offering of full-length television programs.

Source: eMarketer, “eMarketer’s Predictions for 2009,” eMarketer, December 16, 2008

While more and more people are using social networking sites, eMarketer has revised downward its projections for U.S. social network ad spending. The research firm now expects advertisers to spend $1.2 billion on social networks in 2008, down from its previous projection of $1.4 billion.

Similarly, eMarketer expects spending to be $1.3 billion in 2009, down from its previously forecast of $1.8 billion. eMarketer attributes the lower numbers to the recession and slower-than-expected revenue growth at MySpace.

eMarketer has also revised downward its forecasts for MySpace and Facebook. Previously, eMarketer expected MySpace to earn $755 million and Facebook to earn $265 million in U.S. ad spending this year. Now, eMarketer expects MySpace to earn $585 million and Facebook $210 million.

Source: eMarketer, “U.S. Social Network Ad Spending Growth Lowered,” eMarketer, December 10, 2008

One of the great appeals of Internet marketing is the ability to test, track and ultimately improve results. The Internet is a direct response marketer’s ‘dream marketing medium.’

But what about social media? Can you measure results across blogs… social networks such as Facebook and MySpace… micro-blogging sites such as Twitter… and other such media?

According to Dave Evans, author of “Social Media Marketing: An Hour a Day” and contributor to The ClickZ Network, the answer is emphatically YES. And there are a variety of tools - free and paid - to help you do so.

Before you do anything, though, it’s important to measure what’s happening NOW. Once you have a baseline, you can then monitor and evaluate the impact of various initiatives.

Evans points to a number of tools for measuring social content, i.e. the ‘conversations’ about you that are currently taking place across the Internet. Free tools include Google Alerts and my recent favorite, URLFan.

You can set up Google Alerts, for example, to send you emails notifying you of mentions of your brand, website, name, product, etc in Google. But don’t just let them come into your inbox. Dave Evans recommends tracking the results in a spreadsheet. That way you can monitor changes over time.

Paid tools such as Nielsen BuzzMetrics, TNS Cymfony and Umbria are ‘turnkey’ systems that remove the requirement for you to manually record and track alerts.

In between the free tools and the turnkey, paid options, are paid tools such as Techrigy’s SM2, Radian6, and KD Paine’s DIY Dashboard from KD Paine. These allow you to finetune your intelligence searches over time and largely automate the reporting process.

Evans, however, suggests starting with manually monitoring the conversations over a 30 day period. That way you can see what kinds of things are circulating about you, which in turn, can give you an indication of what you need to track and which tool may be best for that.

Once you begin tracking your ’social media impact’ you can also start to look for correlations, trends and patterns. In particular, you might start to see correlations between the level of social media conversations, your search engine rankings, and the level of traffic to your website.

And that’s just for starters. Once you have a system for tracking your social media impact, the next step is to use the insights gained from tracking to work out how to INFLUENCE that social media impact.

Source: Dave Evans, “Social Media: Why Measurement Is Key,” ClickZ, December 10, 2008

A recent United States court decision has MAJOR implications for people who use pseudonyms and fake identities online. Yes, that includes those of us who use fake names in forums and other places on the Internet…

Last week Missouri mother Lori Drew was convicted of three misdemeanor counts of computer fraud. Evidently, she had impersonated a teenage boy on MySpace and ‘cyber-bullied’ a 13 year old girl, which ultimately led to the girl taking her own life. Apparently Ms Drew adopted the persona to combat the girl cyber-bullying Ms Drew’s own daughter.

No question about it - the circumstances of the case are, indeed, tragic. But the court’s decision and reasoning have far wider implications than those related to cyber-bullying.

Ms Drew was found NOT guilty of accessing a computer without authorization to inflict emotional distress. However, because she contravened MySpace’s terms of service that users be ‘truthful and accurate’ when registering, she was taken to have gained ‘unauthorized access’ — a violation of the Computer Fraud and Abuse Act of 1986.

To date, ‘unauthorized access’ has been mainly used against computer hackers, but this decision suggests that unauthorized access includes gaining access to a website using a false identity.

If accepted as a precedent by other courts, the decision could be interpreted broadly to mean that any use of a false identity online is a prosecutable offense. A narrow definition, however, may be that ‘unauthorized access’ only arises if, in using a false identity, the person in question contravenes a website’s terms of service i.e. those on a forum or social networking site.

In other words, it’s only an offense if the terms of service state that you must use your real identity or, as in MySpace’s terms of use, be ‘truthful and accurate’ when registering.

(Oh, and in case you never read terms of service… that was Lori Drew’s defense too!)

Using a false identity may not be a huge issue for someone who doesn’t upset anyone or do anything else wrong… But this decision, if upheld, should be a warning to people who, using fake names, create havoc on online forums where the terms of service are that users must be truthful and accurate when registering.

Just by using a fake name they may have effectively gained ‘unauthorized access’ and therefore be guilty of an offense under the Computer Fraud and Abuse Act.

Source: MarketingVox, “Watershed Ruling in MySpace Suicide Case May Criminalize Fake ‘Net Personas,” MarketingVox, November 28, 2008

Heard of Power.com? Well, you’re probably going to hear a lot more about it in the weeks and months to come. Essentially, Power.com is a platform that allows you to communicate across all your favorite social networking sites from ONE place.

Power.com works like this. You register with your preferred social networks. Then you use your Power.com home page to view all the content from those various social sites - friends, chats, emails, images, etc. You can then use Power to send and receive messages, change your profile, and update your friends or followers list… and do so across all your social networks.

Power.com currently works with Facebook, Hi5, MSN, MySpace and Orkut, and is scheduled to work with LinkedIn, Twitter, Flickr, Hotmail, Yahoo, Gmail, AOL and Skype within the next few months.

Given its, um, power, you can probably see why Power already has 5 million registered users.

Of course, it helps to have, among other things, a link to Power on every message that is sent via the Power.com platform!

Even so, it’s selling proposition is so compelling that the company’s vision of 30 million registered users by the end of 2009 is probably realistic.

The company also has some serious backing - it has received $8 million in Series A funding from investors including venture capital firm Draper Fisher Jurvetson and tech visionary and entrepreneur Esther Dyson.

Based in Rio de Janeiro Brazil, Power.com is a privately held company with 70 employees. It’s opening new offices in San Francisco, California and Hyderabad, India.

Source: Lidija Davis, “Social Inter-Networking with Power,” ReadWriteWeb, November 30, 2008

MySpace is working on a system to allow MySpace users to exchange virtual gift products and make payments within the social network. In particular, the billing and payment system is aimed at enabling MySpace developers to charge for their MySpace apps.

Facebook, which also has its own virtual gifts (not yet open to developers) is also rumored to be working on a payments system.

No-one seems to be talking about it… but what if a payment system created by MySpace - or even Facebook - takes off? Is it possible that by socializing their hundreds of millions of users into using such a payment system… the next step is to enable its use beyond their social networks and in the Internet as a whole. Watch out PayPal.

Source: Erick Schonfeld, “Making Money On MySpace: Payments and Virtual Gifts Coming Soon”, TechCrunch, November 7, 2008

Research by online ad agency Razorfish indicates that users of social networks don’t mind seeing ads, and are actually rather responsive towards them.

According to Razorfish’s survey of 1,006 people, 76 percent didn’t mind seeing ads when they logged-in to Facebook, MySpace or the other social media sites they frequent. Moreover, 40 percent of the respondents said they made purchases due to seeing those ads.

Razorfish’s survey respondents were “connected consumers” - people with broadband access who spent at least $200 online in the past year, used a community site such as MySpace, and consumed or made some type of digital media including videos and music.

Source: Fred Aun, “Social Networkers Don’t Mind the Ads, Says Razorfish Report”, The ClickZ Network, October 29, 2008

Based on recent comScore figures, Facebook attracted 161.1 million unique visitors worldwide in September, compared with 117.9 million for MySpace.

Facebook’s figures reflect a jump of 4.7 percent from the 153.9 million people who visited the social network in August. MySpace’s results reflect a decline of 1.6 percent from the 119.8 million visitors it received in August.

The global gap between the two social networks is now 43.2 million visitors. In the U.S. Facebook had 41.4 million unique visitors in September, while MySpace had 73.0 million visitors.

Source: Erick Schonfeld, “Facebook Widens The Gap With MySpace Internationally”, TechCrunch, October 29, 2008