Facebook, MySpace see ads invasion

Retailers are hitting young shoppers right where they live — on social networking Web sites.

Companies such as Target, American Eagle and Wal-Mart are setting up sites on MySpace and Facebook, where members can post comments, participate in quizzes and link to the retailer’s Web site. Retailers are hoping to generate word-of-mouth buzz among young shoppers, who are on social networking sites at a staggering rate.

About 69 percent of people 18 to 21 years old have a page on sites such as Facebook or MySpace, according to Forrester Research Inc., a Cambridge, Mass., research firm. About two-thirds of that audience checks their page every day.

For their size and popularity, social networking sites are still a largely untapped market. Traditional retailers have just recently started to create pages on MySpace and Facebook, the top two sites.

Facebook has more than 160 “groups” sponsored by companies, including H&M, Pink by Victoria's Secret, JanSport backpacks, Skittles candy, Aussie hair care and Dew Uncapped. Many actors, bands and concert promoters have pages on MySpace. It also has a large collection of pages for movies distributed by Twentieth Century Fox, a sibling under Rupert Murdoch's News Corp.

Site users become “friends” with the company’s page or group, where the retailer sets up quizzes, photos, music, ads, links or forums for comments.

In most media, advertising is viewed as an unwelcome intrusion. But young people welcome the opportunity to leave comments and talk with their favorite brands, Forrester analyst Charlene Li said. More than one-third of young users and half of the adults said they would be open to seeing profiles from marketers, she said in a recent report.

On MySpace, Adidas shoe company offers photos of soccer players, including David Beckham, and backgrounds that users can download for their own pages. JanSport is boosting the size of its Facebook group by raffling off backpacks to people who join.

H&M has used the sites to introduce new collections, offer giveaways and alert “friends” to promotions and store openings, said Stephen Lubomski, H&M’s U.S. advertising manager.

Adam Paul, associate director of business development for New York online marketing agency ID Society, said the most successful marketers maintain updated listings of events and promotions. When the retailer updates the listing, its “friends” get notified with an announcement.

“There is a popular notion in marketing that if you’re not using these tools, you’re missing the boat,” he said. “There is an industry-wide peer pressure to use MySpace.”

MySpace and Facebook are free to users, but for retailers, sponsored pages can cost $100,000 per month, according to industry estimates.

Neither company talks about ad rates. Retailers also have to pay for design and upkeep costs.

Mars Snackfood USA, which hosts a Facebook page for its Skittles candy, said it is putting a “big emphasis” on social networking sites, which can act as a focus group because users can leave public comments for the retailer.

“When you run a [traditional] ad, it only runs one way. Social networking is a really unique medium because it goes both ways,” spokesman Ryan Bowling said.

Story Continues →