Neither Facebook nor Google would have been successful if they were built within a major company. They had to be upstarts to live. And Bing is proof that Microsoft has learned this lesson.
One business mentality to avoid online, that is used all too frequently: Immediate profit maximization without regard for the long term sustainability of a business, would have destroyed both of those companies. They would have been immediately infected with popup ads and banners galore and people would simply stop coming.
The Proof Is MySpace
Myspace was acquired for a large sum of money and long term sustainability or hope for growth was abandoned when someone made the call to make the investment back ASAP, to leverage the traffic immediately for every dollar that could be sucked out of it. And the result is the current difference in value between Facebook and MySpace. Is it important to leverage traffic to you website for revenue? Of course. But you need to ease into it, slowly increasing the ad space as we are seeing Google do, rather than go from no ad space to massive amounts of ad space.
If Facebook would have been acquired as MySpace was, Facebook’s fate would have been the same. It would have been loaded with massive ads and banners galore, many of which would not be relevant to those who view them.
Instead, Facebook and Google have both gotten one critical thing right in developing a mega success website. They have maintained the integrity, “coolness” and usefulness of the site keeping the main focus on the site functionality and useful features and only dedicating a small portion of the page to monitization factors or distracting advertisements when most people aren’t there for the ads but for the other features.
Myspace went the opposite way and loaded up the home page and internal pages with advertisements that are not relevant to most site visitors. News Corp made a large investment and then some executive said holly crap. We need to get our money back quickly. And they paid dearly in the long run for that short sighted type of thinking.
People don’t mind a few relevant ads mixed in with their online content. In fact, sometimes the ads even enhance that content. But if the ads overpower the content, people will leave. As of late, Myspace has toned down their advertising significantly, but still are less relevant and show ads with more frequency than similar websites.
Being ultra leveraged works for e-commerce sites like ebay and the same concept works for brick and mortar stores like Walmart but not for sites that make their money off of drawing users in with great content or functionality and then monetizing the traffic or making money off data collection or ad serving. In this case, they are coming to the site to for a specific purpose, not to see ads. But it is ok if the ads are in the background. A site like Facebook, Google or Myspace must be thought of more like a rock concert or baseball game where people are there to see the main event. You can stick a hotdog stand or beer garden off to the side, but not in front of the stage (OK, maybe a beer garden in front of the stage would be cool).
There is one key difference that separates my online analogy from a rock concert or anything in real space for that matter. In the case of the internet, anyone can access the data at any time from anywhere on the planet. Image if a rock concert or ball game could get that type of visibility.
Back to MySpace. When I log into my account I see an advertisement for a motorcycle maintenance class, an advertisement for a speed dating site, in fact several dating site adverts and an advertisement for marine mechanics intsititue. But if they used the data in my profile (like Facebook does), they would know I’m likely not interested in these things.
Not only that, but they display these ads in large colorful banners that take up the portions of the site that should be dedicated to internal navigation. And they should not display any ads on the home page because I’m only valuable to them and I’m only going to keep returning if I’m logging into the site. Not if I’m clicking on an ad and going somewhere. Sure, advertise once I’m in the site, but use your data to make it relevant to me and non intrusive.
Pull marketing destroys push marketing in the digital world.
- William Ellerman