Media: All About - The rise and rise of Facebook

By Alasdair Reid, campaignlive.co.uk, Friday, 26 March 2010 12:00AM

How can the site maintain its market-leading status?

Nowhere does The Wheel of Fortune spin so freely than in the digital media market. We're referring to the fatalistic philosophy about the transience of success rather than the television game show here, naturally, though in this crazy old mixed-up world, they probably amount to just about the same thing.

Take Google. Last year, the scaremongers accused the big G of trashing the newspaper industries of the developed world, invading our privacy (not least through Google Street View) and laying waste to the world's libraries.

And it made noises that it was going to eat the whole internet too, threatening to launch a new e-mail and social networking and everything platform that would make anything ever launched by any internet company anywhere seem utterly laughable.

2010, however, could well be the year that Google spends its waking hours being sued (not least by Viacom, whose ongoing piracy suit should reach some form of a conclusion), being investigated for monopolies infringements and taxed by governments keen to preserve their newspaper industries.

And it can't even console itself that it's the biggest any more. Or not entirely, at any rate. Last week, according to traffic results published by Experian Hitwise for the week ending 13 March, Facebook eclipsed Google to become the most visited website in the US.

Facebook has outscored Google on a daily basis once or twice - but this is the first time it has stayed in front for a whole week. Google's senior executives, students as they surely are of the poetry of Percy Bysshe Shelley, will recognise this as an Ozymandias moment.

Not that Facebook can feel smug. At the end of 2008, people were confidently predicting its ultimate demise. They could state this with confidence because, if we know anything about social networking, it's how subject it is to fashion.

After all, Facebook's rise has been mirrored by the relative decline of the former market leader, MySpace; while some observers will surely retain only the vaguest notion of the continued existence of a site called Bebo. Meanwhile, Twitter waits to inherit the earth.

1. News Corp's MySpace, meanwhile, has become somewhat accident-prone. Owen Van Natta was appointed as the chief executive in April 2009, with a brief to shake things up. He did - making around one-third of staff redundant in June 2009. He left suddenly in February 2010. The site's new co-presidents, Mike Jones and Jason Hirschhorn, are now promising to implement a fresh programme of innovations designed to "win back old users". Media agencies say that in the UK it has tended to sell display advertising inventory in an unimaginative fashion. However, the arrival of Simon Daglish as its new commercial director could change this.

2. Facebook's sales operation, headed in the UK by Stephen Haines, reporting to the European commercial director, Blake Chandlee, continues to innovate on an almost monthly basis, offering increasingly sophisticated targeting tools. In January, following the success of a similar tie-up in the US, Facebook launched an advertising effectiveness measurement tool called BrandLife, in partnership with The Nielsen Company.

3. AOL's Bebo has struggled, especially last year, when AOL was trying to find its feet again, having divorced itself from its previous owner, Time Warner. AOL's advertising sales division has historically been fairly highly regarded by agencies - but that was before a wave of redundancies back in January, including Sarah Perry, its UK sales director. There has been speculation in recent months that AOL will look to sell Bebo in its continuing restructuring process.

4. For months now, observers have been predicting that Twitter will launch a formal search advertising programme - and an announcement was confidently expected in early March. This particular dog failed to bark, though. The company still has no formal commercial operation in the UK, but many major advertisers have a presence as users. In February, Twitter announced that a landmark had been passed - it was now hosting more than 50 million Tweets a day. According to the company, that number made it more popular than MySpace - although MySpace can count more registered users, it hosts fewer messages per day.

WHAT IT MEANS FOR ...

FACEBOOK

- Facebook's executives are well aware that it's their duty to coin it while the site's fortunes continue to rise - not just in reach and traffic terms but in pubic relations terms too. If the UK market is anything to go by, they're very successfully doing that.

- There will always be clouds on the horizon, though. And in this regard, its recent spat with the Daily Mail is instructive. Facebook threatened to sue when the paper ran a story that the site was letting older men make sexual overtures to young girls. It turned out that the paper had used anecdotal evidence related to activity on a rival site - but somehow believed that Facebook was synonymous with social networking.

- Being the market leader is nice but it can mean you're first to get your feet wet when the tide turns.

- Digital evangelists keep predicting that the vast majority of the population will soon be signed up to one form of social network or another - but only 30 per cent of the adult population, according to recent estimates, logs on regularly.

- And recent research by Forrester suggests that teenagers aren't exactly addicted either, as is often assumed. Only 40 per cent of 12- to 17-year-olds are regular users.

ADVERTISERS

- According to figures released in February by the Internet Advertising Bureau, less than one-quarter of advertisers use social media as a core part of their communications strategy. Those that do, though, love Facebook. "You get the feeling that Facebook looks at all its initiatives with advertisers in mind," Will Smyth, the head of digital at OMD, says. "Its in-depth and granular data model allows you to target people with an unbelievable level of detail."

FACEBOOK'S RIVALS

- Could do better, basically.

This article was first published on campaignlive.co.uk

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