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3 Social Media Marketing Lessons Taught by MySpace Failure [Exclusive]

Social Networking is not new, or at least it’s not as new as we think. Back in 2005 MySpace was the ruler of social networks and when News Corporation bought it for $580 million it looked like Rupert Murdoch’s empire had added a powerful string to its bow.

Fast forward six years later and Justin Timberlake is able to snap it up for just $35 million. The question is ‘what went wrong?’ but really it should be ‘what can we learn from it?’. As social media marketers we should be able to focus past the numbers (spectacular as the disparity between buying and selling prices may be) and look at the underlying causes because that’s where the lessons really lie.

In many ways MySpace was the pioneer of large-scale social networking, and back in 2005 its position seemed unassailable. Less than five years later Facebook had taken off and wiped out its value not dissimilar to the way AOL, in 2008, paid $850 million for Bebo (the UK equivalent of MySpace) only to sell it on for less than $10 million just a couple of years on.

So, what can be learnt? At a microlevel analysts talk about functionality, brand identity and critical mass but although these make interesting reading, at the end of the day they are just technical details in the large footnote of the web’s ever evolving technologies.

What made Facebook take off and MySpace fail is the fact that the former managed to latch onto something which the latter failed to even realize in time and that is the holy trinity of personalisation, socialisation and commercialism. Irrespective of functionality, privacy issues, design appeal or apparent popularity, a social network succeeds or fails based upon three hard criteria:

  1. Does it allow you to establish an identity and project your personality?
  2. Is it the kind of place you can turn into the digital equivalent of your local watering hole?
  3. Can you turn your time there into a money making opportunity if you want to?

Facebook answered all three in a convincing enough fashion to establish itself as the pre-eminent social network to be in. From then on, everything else followed.

The criteria is important enough because now Google has also put in place the tools necessary to socialise the web. Google’s approach is always more user-centric than the autocratic Facebook whose DNA harks back to the days when College Sophomores were happy to be dictated to. Google’s reach, potentially, can deliver greater value and more flexibility than Facebook, which might well lead to the MySpace lessons being re-learnt all over again.

MySpace’s failure also points out exactly what social marketers should be focusing on. If social marketing on the web does not: 1. Deliver personality (in terms of a product, brand or real person), 2. Provide value in terms of information or entertainment or 3. Offer some way of profiting, either by solving a problem, offering a deal or enabling a profitable partnership, then it fails to engage, and when engagement is poor, social media marketing is an empty exercise designed to tick all the right boxes rather than provide a healthy return on the time, effort and money invested in it.

Join The Conversation

  • David Amerland's picture
    Jul 5 Posted 5 years ago David Amerland

    Hi. What a can of worms you open here. Ok, design is important and Britain's Design Council has concrete figures which show that for every $200 spent on design companies reap that back two-fold in sales. The reason I did not address it here however is that in pioneering efforts, like MySpace, design is less important because there is no significant competition - we all bite the bullet (so to speak) and go for the functionality, much like we thought in the early days of the web that having twinkling stars and rainbows as the background to a website was the height of sophistication. 

    Facebook's design (like most good designs) is indeed, largely 'invisible' in that it enables us to interact without much thought. But that is not the overriding criteria. The best design in the world with the most up-to-date functionality will fail if it used by just 60 people and there is no other compelling factor for uptake. 

  • David Amerland's picture
    Jul 5 Posted 5 years ago David Amerland

    Tom, good points. Murdoch really does not get the web let alone social media and much of what News Corp does is bound in traditional media methods. Having said that I will point out two things we ought to concede: first MySpace did point out the potential social media had and created the path many of us follow today. Second, the purchase price News Corp paid for MySpace was got back within the first year thanks to a Google Ads deal which, in itself, pioneered the way for monetizing social media through advertising. They were, as you suggest, incapable of taking their vision far enough and we know how it played out. Thank you for taking the time to write here.

  • Jul 5 Posted 5 years ago DeeCee (not verified)

    I would like more control over the way people interact with me on FB and it currently either lacks the proper tools outright or makes it so convoluted that many people don't even use the tools. Friends groups for instance, I've seen many intelligent people, including PhDs, try to create friend groups and start a FB group by accident because it's so non-intuitive. Sometimes when FB changes settings, you often have to OPT OUT of them, they opt you IN by default, that is incredibly annoying. And at least MySpace would let you approve what people posted on your wall, I've had hacked friends post spam links on my wall that others could have clicked. What is the solution though, you either have it open or have it closed - no option to approve, 2 thumbs down on that one. I have Google+ and I'm really liking what I'm seeing so far - clean interface, simple controls, the ability to easily separate and share different information whether the group ("circle") is friends, family, acquaintances, etc. I'm rooting for it and hope it does catch on so I can ditch FB once and for all.

  • Jul 5 Posted 5 years ago Tom Schafer (not verified)

    Granted MySpace had its quirks and problems from the very beginning, but these are not the real reason for its demise.  The force behind the fall is found within the context of NewsCorp and its leader Rupert Murdoch.  The vast majority of businesses purchased by Murdoch were do so to extract profit then sell the carcass.  In the case of MySpace, Murdoch's plan backfired because of his organization's lack of perception about IT specifically social media.

    NewsCorp. believed huge profits could be reaped from advertising placed through social media.  This hasn't taken place, especially within the operating guidelines under which Murdoch (as other venture capitalists) wants to realize a profit prior to selling off the business.  NewsCorp. did not have or execute the proper plan and strategy to ward off competition (it was there and NewsCorp. knew it).  In addition NewsCorp. had no idea about the disconnect between social media and advertising and attempted to use traditional methods of advertising in an untraditional format.

    NewsCorp. did a similar deal with the Wall Street Journal and again failed and sold the property for less than the price paid.  Even more significant is that NewsCorp. again did not have the perception to see the emerging opportunity available through WSJ.

    The lesson to be learned from this is that when the wrong people gain control of any enterprise, failure is emminent and competition doesn't have to work as hard to surpass its rival.

  • Jul 5 Posted 5 years ago Anonymous (not verified)

    I agree that social media platforms are becoming ways for businesses to profit, and the music business profited well on Myspace, but I think the bigger issue that you didn't address was design. Facebook is constantly changing its design and the way people access information, which allows it to be sustainable. Myspace rarely changed its design, and it didn't bring much to the table in terms of providing people with up-to-date, sound journalistic news, which is something many people are interested in when they sign up for something like Twitter or Facebook. I do have hopes that Myspace could come back, but with a platform for people to socialize about music and television, but time will tell.

  • David Amerland's picture
    Jul 5 Posted 5 years ago David Amerland

    Luke, points well made. MySpace seemed to grow and grow almost inspite of its inherent programming issues (pages used to stick more often than not, for instance), evidecne, if any were needed of the need for an online social network. Facebook's achilles heel is the fact that its origins are as a College website intended to pick up girls. It has been shoehorned to do a lot more than that and it shows. It is also struggling to reinvent itself for business, with relative degrees of success. Where its College pedigree shows the most, however, is in the cavalier, top-down, autocratic attitude it has towards its user-base. It is this which contributed in falling numbers in the US and the UK (markets it needs if it is to maintain its business focus) and it is its inability to improve here which will probably be the cause of its downfall. Your words may well turn out to be prophetic.

  • Jul 5 Posted 5 years ago Luke Brynley-Jones (not verified)

    I would go back a step and ask why Myspace ever succeeded in the first place. I recall reviewing the site back in 2004/5 - it's terible design, it's buggy interface, the lack of intuitive sharing features - and wondering how it was attracting so many users. The fact is: it was the best on offer at that time. It's one asset was it's youth appeal, through music, but as soon as Facebook emerged, it was always going to lose out. A cautionary note: Facebook was never designed for businesses. There's room for a better social network to take that space.

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