MySpace v. Facebook Advertising Showdown. Which Platform Is Better?

The guest post below is written by Ryan Hupfer at HubPages. A couple of weeks ago HubPages ads were blocked from MySpace’s new self serve ad platform, MyAds, as being competitive to MySpace. That problem was fixed, but we asked Ryan, who advertises on both MySpace and Facebook, to write a guest post comparing the two platforms.

His results are below. In a nutshell, he finds Facebook a much better experience. When it comes to the results, though, things are mixed. Ryan’s test showed a lower cost per click on MySpace than Facebook ($.27 v. $.44). But the Facebook clicks were more productive: a new user cost just $5.11 on Facebook, v. $8.03 on MySpace.

The results, though, can’t be taken too seriously, for a number of reasons. First, Ryan spent $3,119 on Facebook ads and only $225 on MySpace (he says MySpace ads are much harder to administer, so he spent less). But that difference alone makes the results unreliable. Second, Facebook has text ads, MySpace has display ads, so the results are not apples-to-apples.

That gets me to the biggest reason the test isn’t scientific – both MySpace and Facebook knew about it. Ryan interviewed both extensively for the post. Since both knew this was coming, they both had incentives to help his ads get better performance.

But the post is valuable in that it shows what a real world advertiser thinks of the relative strengths and weaknesses of the platforms. Based on this, we may commission a true third party test of each of them, without notice to either company. Those results will be more relevant.

Update: A statement from MySpace on the post below:

We welcome the constructive feedback we’re getting on MyAds from our more than 15,000 advertisers—we’ve only been live publicly for a handful of weeks and we continue to make updates to the system. Unfortunately a lot of the information in the post above is outdated and we wanted to clarify a few important details on the new product.

Last week, we debuted a new functionality—“On-going Campaign and Daily Spending Limit,” which allows an advertiser to easily set up a continuous campaign with a daily stop-limit budget. Since its launch last week our daily budgeting has been adopted by 90% of advertisers. We also recently launched “Bulk Pausing and Restarting” which enables advertisers to better manage campaigns in bulk and filter by campaign status. We think these new improvements should address the major points above.

MySpace does an exceptional job of empowering MyAds customers to receive an analysis of campaign performance, however, in the break-out spreadsheet above, it says “No Daily Reporting,” which is factually incorrect. Not only does MyAds have daily reporting in the product, the reporting is updated on an hourly basis and has been core a functionality of the product since launch.

Ultimately, we wish the author would have spent more money with us to match what he spent on Facebook to ensure the comparison was reasonably balanced, but in spite of that we managed to deliver a 50% higher CTR at two-thirds the cost-per-click– making MyAds a better value for the money.

We hope this additional information is helpful to TechCrunch readers and are in contact with the guest author to update him on some of the absent MyAds product details.

Ryan’s Post:

After I had some issues with MySpace MyAds a while back, I’ve decided to dig in and come up with a much more detailed and apples-to-apples comparison of MySpace’s newly launched self-service ad platform to that of the slightly older, yet just as wet behind the ears Facebook Ads. As HubPages Communicator of Awesomeness! I have not only extensively used both of these latest attempts at the do-it-yourself advertising craze as a part of my overall marketing plan, but I have also had the chance to pick the brains of each of their management teams.

One of the first things that I found out was even though MySpace and Facebook have both created services that are similar in the fact that they’re finally able to capitalize on the data that millions of people are pumping into them daily, their implementation, strategy and vision couldn’t be any more different.

MySpace MyAds – Keeping It Creative And Looking To Monetize Now

While meeting with Adam Bain, the president of Fox Interactive Media’s audience network and the guy that Fox challenged to make some monetary magic with MySpace after they acquired the ad optimization and hypertargeting ad experts Strategic Data Corporation in 2007, it was clear that he has a plan to implement MyAds in a way that won’t affect the creativity and entertainment that MySpace has embraced since its launch in 2003. This is the main reason for him and his team deciding to go with a banner-based system as opposed to the more text-based systems that are currently used with Facebook Ads and other cost-per-click ad platforms such as Google AdSense.

Adam was also quick to let me know that the MyAds platform is now utilizing the same hypertargeting technology that they have been successfully using with larger big brand ad campaigns, such as the major mobile phone carriers (which he claims MySpace is the number one online lead generator for each of them). His overall vision for MyAds is to quickly focus on monetizing MySpace by utilizing this new hypertargeting which now gives users the ability to target a professional and creative campaign to practically anyone on MySpace based upon their interests and location. Also, he stressed that as the adoption of MyAds continues to grow he feels that that eventually the ads that most people are used to seeing on MySpace (punch the monkey) will go from being annoying to becoming something much more relevant and entertaining.

It’s probably also worth mentioning that the MyAds platform itself was built from the ground up internally by MySpace and that many of their core members came over from the team that helped Yahoo integrate their acquisition of Overture’s search advertising system. MyAds is seen as a huge revenue opportunity for MySpace and according to Adam the 40,000+ ads that have been submitted are already having an impact on their bottom line.

Facebook Ads – Monetization Taking A Backseat To Overall Growth Strategy

Facebook’s director of monetization, Tim Kendall, seemed to have a much different take on their now one year old self-service ad platform, which is an evolution from the Facebook Flyers that I once used a few years back when I was a graduate assistant at a college in Indianapolis, IN. According to Tim and despite the over half a billion dollars of funding that they’re currently burning through, Facebook’s main priority isn’t monetizing – it’s continuing to keep the now fastest growing social network of 140+ million worldwide users on pace to become something even bigger.

Growth, Tim says, is the only way to eventually get to a point to where they can start bringing in a positive cash flow and can begin turning their now venture capital devouring machine into something that can show signs of actually making some real money. Until they get to this point of growth that they’re happy with, Tim says that the proper resources required to really break out the Facebook Ads system into the mainstream won’t be available and they will continue to grow at the modest pace that they’re currently seeing.

The excitement about and around the Facebook Ads team wasn’t close to being on the same level of what I experienced when meeting the MyAds team, but I suppose that could be due to other growth-based initiatives, such as Facebook Connect, getting all of the attention. Also, as we discussed the overall vision of Facebook Ads there was much less focus on the potential effects to the overall user experience when it came to the ads being implemented into the Facebook as compared to my discussion with the MyAds team. This is probably because of the more spontaneous and community-focused nature of MySpace vs. the more connection-focused Facebook that is used more like a communications tool.

Using MyAds In Two Words: Clumsy Yet Creative

The newly launched MyAds is a huge step in the right direction for MySpace’s attempt to empower potential advertisers of all sizes to be able to tap into their network of promotion-friendly users by utilizing their new lineup of self-service tools. As a marketer with a mid-sized and somewhat limited budget, the idea of what MyAds can offer is very appealing – as long as it’s easy-to-use and somewhat self-managing.

You see, the self-service model that is meant to take advantage of the longtail of advertisers (50,000 advertisers spending $25 as opposed to 25 advertisers spending $50,000) is somewhat of a double-edged sword due to the fact that the smaller and mid-sized advertisers that are meant to use the system are a much different beast than the larger and more experienced advertisers that are more used to dealing with advertising platforms, terminology and management. This means that dealing with smaller advertisers (like me) also comes with dealing with advertisers that have less time, are managing many different things at once, and are most-likely less educated on advertising methods and seem to need more tools that allow them to make sense of their campaigns easily and quickly.

This brings me to my own experience with the MyAds platform, which up until this point has been a little bit of a struggle. This isn’t surprising considering that it’s only been openly available for less than 3 months and is still in public Beta. I’m not one to get frustrated easily with something new and I understand that they are consistently making improvements every day, but as it stands now there are some issues with the MyAds platform that have made it really hard for someone like me to work with as efficiently as I’d like. Some of these issues are as follows:

  • Extremely slow and non-intuitive Flash-based management system that can be a real time-killer: It takes me a lot of time and a lot of screens to manage the campaigns that I have created. I want to get in, make some changes and get out fairly quickly and this system just doesn’t allow me to do that at this point.
  • No multi-ad campaign creation: Unfortunately every ad that I enter into the system has its own campaign, budget, timeline and reporting. This makes it impossible to create specific sets of ads that can be managed from the group level such as Christmas ads, female-targeted ads or groups of locally focused ads. Managing each ad on its own is very inefficient, unpractical and isn’t worth the time that it takes to manage them.
  • No ongoing campaigns and no daily spending limits: When a campaign is created there is a specific budget amount and schedule set for the ad and once either that budget or schedule runs out the campaign is officially complete and stopped until it is restarted manually. This results in excessive management of the campaigns or the inability to manage them at all, especially for the ones with smaller budget amounts. One odd quirk that I specifically ran into was that when my $25 budget ran out for an ad I couldn’t figure out how to get it restarted. This was because even though I extended the schedule for another month, I had to go in and add another $25 by hand to the $25 that was already listed for my budget, meaning that I had to change the original $25 to $50 to get it up and running again. Then the additional $25 ran out (which happened a day later) and I now need to go in and change the budget to $75 to get it restarted one more time. As you can see this can begin to get very annoying. This past week the MyAds team informed me that they are rolling out both daily spending limits and ongoing schedules, which will clear this issue up and will make MyAds much more manageable.
  • Being creative could also mean more work: The banner-based system that MyAds utilizes allows for a higher level of creativity for those who use it, but this also means that it takes more work to get these campaigns created and running. Google, Facebook and others have developed more text-based systems for this very reason. But, the user-generated ads that I was shown by the MyAds team were super creative and looked as professional as many banner ads that I have seen on other sites, which shows that users are already capitalizing on the flexibility of the platform. MySpace has never been one to take the more boring route and they’re hoping that these types of banners will make the ads more effective and relevant to their users as time goes on.

Each of these issues can probably be easily fixed and like I said, the MyAds system is only a few months old and they have a very capable team working on improving this system every single day. I fully expect MyAds to only get better over time, I just hope for their sake that they don’t lose a lot of advertisers in the meantime.

Using Facebook Ads In Two Words: Speedy And Statistical

Everyone knows that Facebook hasn’t exactly been free of any issues when it comes to trying to monetize their network, but ever since I have used them Facebook Ads have consistently improved their extremely easy-to-use tools and have quickly realized the benefit of empowering their advertisers with as much statistical and analytical data as possible. The speed and ease of use that comes along with using Facebook Ads makes creating campaigns and managing their budgets, schedules and messaging extremely straight forward while their reporting options also make it easy to get a quick and easy overview of what your different campaigns are up to.

In fact, there aren’t a whole lot of things to complain about from a marketing perspective when it comes to Facebook Ads, but the one thing that I do worry about is how much noise their users will take before the ads begin to get in the way of what they’re actually there for – communicating with their friends. Here are a few things that I feel Facebook has done right:

  • They have developed a great keyword-based ad targeting system: Facebook has over 20,000 unique keywords (and a pool of over 1 billion) that you can use when targeting your ads. These keywords come from profiles, Facebook pages, groups and authorized Facebook applications and are entered with a free form predictive keyword system. MySpace, on the other hand, uses a less-organic method to targeting interests via a hierarchy tree-based system.
  • They have created a very flexible and friendly campaign management and reporting system: There are options to group ads into a campaign, to set a daily spending limit and the ability to make the campaign run on an ongoing basis. Of course, all of this is well complemented with a quick and comprehensive reporting system that Facebook calls Insights. Insights goes well beyond just clicks and impressions by enabling you to dig deeper into your campaigns by providing user-specific demographic data for the people who are actually end up clicking on your ads.
  • The use of adding Social Actions can really boost your clicks: By adding Social Actions to your Facebook Ads you allow the ads to potentially run with an image of one of the Facebook user’s friends if they’re a fan of your Facebook Page that is connected to the campaign. Adding Social Actions has been known to double the amount of clicks that an ad receives.

So, does Facebook have the perfect system? No. But as far as I’ve seen they’ve made some huge leaps in the right direction when it comes to advertising on social networks and I can only imagine what they’ll come up with once they actually give it the attention and resources that they think it eventually deserves.

Stats, Conversions And The Bottom Line: How Do They Perform?

The bottom line when using these self-service advertising platforms is whether or not they make my life easier as a marketer and whether or not they give me a good return on my investment of time, money and attention. I ran some numbers on how each of these campaigns has performed for me, but like most advertisers will be quick to tell you, results can and probably will vary from campaign to campaign. With that being said, here are some things that you should be aware of before I lay out my numbers for you:

  • These stats are from the campaigns that I ran in November of 2008
  • Each week I spend some time each Thursday to update, manage and adjust these types of marketing campaigns and depending on ease of use, I can get more done on some platforms than others. MySpace tended to take me more time to manage, so it usually didn’t get the same level of management that Facebook Ads did.
  • These stats include analytics that I have pulled from both Facebook Ads and MyAds and the amount of data they allow you to view and download varies. While MyAds only offers a Flash-based reporting interface with some basic analytics, Facebook Ads allowed me to download more data than I could ever ask for in an easy-to-use Excel format.
  • I was more than willing to budget the same amount of spending on both of the platforms, but due to some of their campaign restrictions, I honestly had a hard time spending as much money with MyAds.
  • As far as HubPages interests go, there are two metrics that we are most interested in when it comes to determining a good ROI – newly registered members and more importantly the Hubs that they end up publishing. Depending on these two metrics we can determine whether or not various marketing campaigns are giving us the return that we need to deem them successful.

The Future For These Self-Service Ad Platforms

Although MySpace and Facebook are two very different businesses, they both have realized that they need to accomplish similar things in order to give their self-service systems the success that they’re looking for. Two big goals that they both mentioned were increasing their marketing and promotional reach to the millions of potential advertisers across the nation and once they reach them somehow educating these advertisers to the point that they feel comfortable using these self-service systems.

Facebook has already started setting up deals with partners as a way to get the word out, such as their partnership with the Visa Business Network that leverages Visa’s name to attract new businesses to advertise and a deal with GoDaddy and Intuit that gives their new business users free credits to try out the Facebook Ads system. MySpace is also working on setting up some of these partnerships and I’m sure that they will be figuring out ways to inform their music, comedy and other entertainment-based users about the MyAds service as they begin to implement their marketing and promotional strategy.

With both MySpace and Facebook looking to self-service advertising as a way to significantly bump revenues, the race is officially on to see who can get traction in the market first. Facebook has the polished tools and the growing audience, but I have a feeling that MySpace has just given us a taste of what their creative team can come up with and despite the issues that I’ve had with MyAds, they seem to be constantly improving their system that has already seen some early success. All I know is that I’m looking forward to seeing how these competing platforms end up performing through the rest of 2008 and into 2009.