New Hitwise findings indicate that MySpace sent more US traffic to online retail sites last week than MSN search, the third largest search engine on the web. That’s big news, as it’s tangible evidence that youth oriented online social networking is a market driver of serious proportions.
The Hitwise report puts Yahoo! as the source of 4.69 percent of traffic to online retail sites, MySpace as 2.53 percent and MSN search at 2.33 percent for the week ending August 26th. Google leads the pack at 14.93 percent.
Search related advertising last year was a $5 billion market, still small compared to $22 billion in magazines and $74 billion for TV advertising - but the landscape is changing. The Financial Times ran an article on Tuesday about the belief that the shortage of marketers skilled in negotiating sites like MySpace and YouTube is one of the biggest barriers to the growth of advertising online.
Even in the short term, it’s still up in the air between the big players. Google’s advertising, which is generally believed to be more effective than that of competitors, hasn’t kicked in at MySpace yet. If Google can make MySpace search more bearable when it takes over in the fourth quarter of this year, then you can expect MySpace to drive more traffic to retail sites than ever. At the same time, IE 6 doesn’t have a native search box in the chrome of the browser and IE 7 will - to search either MSN or Live.com. We’ll have to compare these numbers with Live.com in the future.
Perhaps more important to our readers, the numbers go some distance towards proving that young people using social networking sites are interested in shopping through links on those sites. In fact, they’re more of a force to reckon with than MSN searchers apparently. And social networking sites can profit from on site advertising just like search engines can. All those startup social networking sites hoping to monetize their traffic with AdSense? Maybe it’s more realistic than we thought. There certainly are a lot of contenders launching - we haven’t posted the MySpace logo here in more than a month.
If any number of these new sites survive, if perhaps a large number of MySpace users grow dissatisfied with the Fox influence, then the financial impact of that traffic will of course be diffused - but there are a lot of startups out there who would be interested in getting slices of a pie larger than the MSN search ad pie. They’ll be able to command a far smaller cut of the revenue, but the news that the market leader in the social networking space is demonstrating its impact on online retail will make a nice feather in the cap of all the little aspiring networks coming online.
I think it is tangible evidence that youth are spending(wasting ;-)) more time at these social networking sites rather than on their education
I wonder if the social networking sites focusing on shopping (http://www.varien.com/blog/sharing-with-others/) will be able to compete with the behemoths or if they will get crushed.
“I think it is tangible evidence that youth are spending(wasting
) more time at these social networking sites rather than on their education”
It’s always been something…TV, the mall, video games, etc. It’s not like social networking sites are suddenly causing the downfall of our youth’s usually high interest in their education.
Ryan, may be I should have said that whatever void is left by the other interesting diversions is filled by these social networking sites.
I wonder when they will add a store/auction feature to profiles. Similiar to what tagworld already has.
They have a huge number of eyeballs of a big market. It seems like it’s barely even tapped, and advertising isn’t the only way they can cash in on it. Kids like to share their stuff, product reccomendations anyone?
It seems that product recommendations may be more viable than I thought.
MySpace hasn’t even scratched the surface of pushing products yet. It is just getting started. It will be a force to reckon with if this is any indicator.
How do you know MySpace is actually DRIVING the traffic? I get the idea that if someone searches “cell phone” on Yahoo and they click a link to a cell phone shopping site, that Yahoo “drove” the traffic. But if someone is editing their MySpace page, and then they go to eBay to check on an auction, did MySpace DRIVE the traffic to eBay, or is MySpace coincidentally the place the user was before going to eBay? How do you distinguish between the two?
Come now, are we really pretending that traffic equals revenues? Who gives a crap about traffic? What counts is the revenues.
MySpace sending more traffic to retailers is like teenage kids skateboarding by the mall. Sure, there’s lots of ‘em there … but do they buy anything? Maybe a soda here and there … but you don’t measure a mall’s success by the number of teenagers skating in the parking lot.
Myspace has at best another 2 years before they drop off the side of the planet.
Kids of today have no conception of loyalty and their attention span is non-existent.
Victor
Those stats are still impressive.
“I think it is tangible evidence that youth are spending(wasting
) more time at these social networking sites rather than on their education ;-)”
On first reading I wondered if you were suggesting kids are wasting time on education. I would have agreed.
@Victor:
“Kids of today have no conception of loyalty and their attention span is non-existent.”
Have you tried getting them to move from one IM platform to another? Youth have loyalty to their buddy list. O tempora, O mores, it’s been over 2000 years.
“Myspace has at best another 2 years before they drop off the side of the planet.”
Victor knows whats up. I think it will take a few years before people find a real use for the internet. Myspace sure as hell isn’t a good one. After all, it’s just a bunch of geeks having their way with it so far, and eventually it’ll find its way into the everyday lives of Americans.
@victor: bitter much?
I do think that kids have loyalty for great brands that have served their needs extremely well. I personally can’t stand myspace, but in terms of serving the user need of connecting with friends online, it’s the best thing out there in terms of sheer numbers. The interface is terrible and it’s buggy and ugly, but those are obviously things the average user is willing to contend with in order to access their userbase.
Unfortunately, myspace isn’t going anywhere, especially not in the next 2 years. They may not remain the number 1 social networking site (youtube will probably take that spot, as it’s essentially a social networking site now) but they certainly won’t “drop off the side of the planet.”
@John C: please tell me that is meant to be sarcastic.
MySpace hits the spot for teen retailers (the biggest segment of them all!!). This is hugly impressive. However, your comment about about the ’social networking ecommerce sites’ I disagree with. MySpace rules, the other guys will come up with clever features that MySpace will absorb. The new King has been anoited, hail MySpace.
Hitwise does not have monitoring in any of the largest ISP’s, so their sample is skewed to individuals with small ISP’s at home.
We all know when and where people use the internet most, work, so their data is crap.
Taking a blog post from hitwise and reporting it as a fact is an error in judgement.
“the shortage of marketers skilled in negotiating sites like MySpace and YouTube is one of the biggest barriers to the growth of advertising online.”
We are constantly bombarded from large corporations sniffing around about the MySpace and YouTube market opportunities.
We’re always skeptical of these corporations not being authentic in these networks. The fact that need someone “skilled in negotiating” makes it clearly obvious that many of them have failed to even venture into MySpace or YouTube.
It’s best they stay out, until they are fully committed to learning it. These social media sites require complete authenticity, which is not usually a hallmark of outsourced agencies.
Sure, we’ll help them discover what MySpace is all about, but we never offer to actually “negotiate” it for them.
No need to quote the cynics again as it has been done by many. Very easy to say the myspace will not be where they are 2 years from now. But did any of you predict where they would be today?
Myspace has a critical mass with an audience that every marketer dreams of. And these people are not going anywhere without their network going with them. Sure its ugly to look at for many of us - but then again we arent using it.
Now we just need to add Apple into this mix. Talk about extreme brand loyalties - Myspace + Google + Apple
I have observed that for the last 5-6 posts “Startups.in/India” has managed to be the #1 commenter… I wonder whether they have discovered that commenting on Techcrunch increases their traffic or being the first commenter on Techcrunch post is their day job. Anyway, good luck with your venture guys - I hope this marketing technique is working.
I guess I don’t understand how MySpace is sending people to retail. Are we talking about banner ads?
IHACFE - To be honest, you are partly right
It’ll be myspace today a new site tomorrow… so in reality they better make the most $ while they can.
How cool would a mashup between a massive network like MySpace/Facebook with a solid trading platform like SwitchDiscs be? Millions of people trading DVDs, CDs, Games, Books and whatever else. Hint…hint!
Ah, this is just because of the click-games / ads that MySpace uses. So people kill time playing those silly little games and when they win a popup occurs. Doesn’t mean they purchase anything… just means they have a lot of time on their hands.
I would have to agree with the majority of you in these:
1. Kids are wasting their time
2. Myspace will start loosing appeal
3. Myspace hasnt even scratched the surface.
After all this social networking hype, only a few will actually survive and continue (or for some — start) to become profitable, these would have to:
1. Provide some sort of useful application
2. Fulfill users needs and wants beyond that of collecting profiles/”friends”
3. Make it sustainable by design, whether it be as Chris mentioned, integration with e-commerce, marketing/concise advertising model — not just build a huge user base and wait - almost improvise - a way of creating revenue. Which is pretty much what myspace and others are doing.
…and at what point does techcrunch stop adding sponsors?
Is it going to be BoingBoing 2.0?
I’m a US Retailer and it’s true myspace does send more traffic then msn; in my case Yahoo too! However, the traffic is nearly 100% image hotlinking and therefore has little to no value (for me). They’re just eating my bandwidth.
I must say that I’m in the myspace will die camp, not because it will fail to monetise or because the fickle youth will move on, but because it’s core product offering is limited at best.
Myspace will not become the surviving hub of the social web if it can’t incorporate the elements that users will soon come to demand. Apart from the terribly ugly and rigid profile pages, video sharing is limited, RSS and content rather than user bookmarking is grossly under-utilised and generally users are forced into far more conformity than they ultimately want.
Attempts to bring a touch of individuality to a page result in it becoming messy and I think users will ultimately get tired of this. As far as the barriers to migrating user groups goes, all it requires is a clever import function ala Blogger to Wordpress and the ability to communicate with a meta view of the networking sites.
I’m sure someone will crack it.
aliensito, you’re missing the point. Kids are not wasting their time, they’re entertaining themselves and communicating with others. They’re not collecting profiles, they’re meeting new people they could otherwise not meet in the offline world and discovering new music, ideas, etc. The useful applications that soc net sites provide are communication and discovery tools. While I agree that these sites have to create revenue, they can do so without having to follow formulaic corporate processes.
I think myspace is showing more promise everyday.
When it first began my thoughts were the kids would lose interest quickly and move on, but they seem to be digging in for a long stay.
Once the old folks (of which I am one) realize that the young guns know more about what they want and how to get it than what the old folks Think they want or want them to get.
I for one want to be in the mix.
One poster above said all the traffic is useless and revenue was the only thing that counts and I agree, kind of, in that traffic wont buy you a cheeseburger, but revenue wont come without traffic.
Social networking is different than marketing though in that there are always kids skateing in the parking lot and you just need to have something that interests them when they skate by without sales pitches and marketing schemes.
I sell guitars online but I dont try to sell them on myspace but you better believe that I will try to get a huge network of artists and singers and players to shoot the breeze with because sooner or later they need tools of their trade.
Even if they dont I can still listen to some great tunes and and keep up on whos hot and whos not without selling any sizzle or steak or anything other than myself.
I’d like to see something like ‘SpaceWords’ come out within the network (maybe it’s already there).
PPC for MySpace users - that should open things up a bit
I was just reading the Fortune profile of myspace and they quoted these figures from comScore:
87% of myspace users are 18+
52% are 35+
Can that be right? Is it just parents and curious boomers?
I think retailers are missing a huge opportunity. Kids and twenty-somethings love to show off what they’ve bought. Make it easier to buy from MySpace, but then give the users a “things roll” that lists all the stuff they’ve bought. Give them badges to download if they’ve purchased something, so they can show off the fact that they bought the new iPod or hot video game. That’s the sort of thing that would really impact the retail world.
It’s a good 3-4 year bet. At that point, there will certainly be something bigger and better.
AND, I’ll bet there will be some type of scrapping technology that will grab all your “friends” and content as well.
@ Jeremy: it’ll have to be overseas if there is, because myspace has sued for that before, even for relatively innocent sites that would have driven traffic to them (like singlestat.us)
This has got to be one of the most asinine posts (and release from hitwise) that I’ve ever read. Of coure MySpace “drives” more traffic to those kinds of sites - it’s the #1 most trafficked site on the web!!!!! MySpace drives more traffic to every single other site out there than any other site on the web!!
Are people really this dumb?
Right back at ya there pal.
It seems that no one saw that news about HitWise’s metrics being a suspicious themselves - I honestly wouldn’t read too much into this report:
http://www.itwire.com.au/content/view/4947/53/
Daniel
WHO THE HELL RELIES ON HITWISE? THEY ARE GOOD FOR NOTHING. I’M WILLING TO BET THIS POST WILL NEED AN UPDATE UPON FURTHER REVIEW OF THIS FINDING.
The reason HitWise would be fooled into thinking MySpace is driving all of this retail traffic around is because they’re not looking any further than a http log.
There’s an entire spam industry built around MySpace, and part of that spam is the creation and abuse of accounts for the purpose of advertising links through bulletins.
The process works because MySpace is flawed. It allows people to register and then use scripts to automate building friendships. People create accounts, generate relationships with 10’s or 100’s of thousands of users, and then for $10 - $20 you can get them to message your spam to every one of those chumps.
Many of the 20 million generic “myspace resource sites” that are polluting the internet (and usually doing their best to contribute to click fraud/invalid clicks) offer this “service”.
On Hitwise: traffic numbers are what they are - but here’s Hitwise’s explanation of their methodology, including explicit statements contradicting the arguments above. fwiw
I am afraid that as long as people can make money and
the service is FREE …MySpace will do nothing but grow
and GROW!
By the way “janet” I think people who run fraudulent sites like yours should be thrown in jail.
I think the biggest mistake being made here is assuming all myspacers are teens. I was talkied into having a profile (I’m 33) by two of my best friends - a 31 year old female mental health professional in FL., and a 24 year old female city webmaster in TX. It is currently the best method for me to contact either of them - and if I were selling anything, myspace seems like a natural for reaching these professional women.
one guys opinion
Maybe I should put profile page on MySpace instead of use AdCenter!
Nice article.
-kak
oh yeahhhh