April 19, 2006
Niche Web Networking Sites Chase MySpace Ad Dollars
NEW YORK -- Social networking online isn't just for hip twenty-year-olds any longer, as a new wave of targeted Internet community sites build business models to attract larger audiences and more advertisers.
The Internet will see a lot more targeted community launches in the coming months, both from start-up companies and established media businesses, rather than the general youth community sites that defined the sector such as MySpace.com, Facebook.com or Friendster.com, industry watchers say.
Like most social networking sites, both allow users to create and share blogs, pictures and videos with friends and the wider public.
"You're going to see a lot of these kinds of sites in the next six to nine months, both start-ups and major companies," said Andrew Frank, an analyst at Gartner Research.
Frank said that sites such as Sisterwoman would offer advertisers added value in reaching an audience that will be prepared to engage with marketers.
The sector drew investor attention after News Corp. bought MySpace for $580 million last July. In March, General Electric Co.'s NBC Universal said it planned to buy women's online network iVillage for $600 million.
Sisterwoman launched on Wednesday after signing on ahead of time four major advertisers, including beauty-care line Neutrogena and cable network The Learning Channel.
Sisterwoman is offering them the opportunity to sponsor services around which users can share their own photos, videos or other links.
Founder Allie Savarino said advertisers were traditionally resistant to two-way conversations with consumers, which opens the gates on both positive feedback as well as criticism.
"Now they realize they have no way of increasing their market share without it," Savarino told Reuters. "It is tied to the ownership that consumers have of your brand."
Sisterwoman and Jokebox are the latest in a new line of community sites hoping to build on the success of younger-skewing Internet networks but attract mainstream advertisers looking for other audiences.
Jib-Jab Media, a company behind popular comic Internet films, also unveiled this week a site allowing users to share jokes and funny material. The company described JokeBox.com, which featured a prominent plug for Bud Light beer on its home page on Wednesday, as a hybrid of MySpace and cable channel Comedy Central.
Sites aimed at adult consumers would appeal more to advertisers than MySpace, despite the youth network's huge popularity, said Eric Wheeler, chief executive of Internet media buyer Neo@Ogilvy North America, a unit of WPP Group.
Advertisers are generally concerned over the commentary they may receive online, and even more wary of the freewheeling discussions of younger users.
"Anytime you move away from buying a placement (in the media) to buying something that is live, it can get a little dicey for advertisers," said Wheeler.
Adults are also more likely to recommend brands to each other on a regular basis and may be more receptive to advertiser messages, Savarino said.