July 30, 2009, 12:00 AM

The Big Four

An e-retailer’s guide to the four most popular social networks, including how to pick the ones to focus on and which tactics produce profits.

By Bill Siwicki

A few years ago, social networking was a novelty. Today it’s part of the fabric of most Internet users’ lives. In fact, earlier this year, social networking surpassed e-mail in the amount of time spent online on a monthly basis, a Forrester Research Inc. study found.

In the past two years, retailers have flocked to social networks. Today, 56.8% of the Internet Retailer Top 500 e-retailers have a page on Facebook, 41.4% have a channel on YouTube, 28.6% have a page on MySpace and 20.4% have an account on Twitter. And a great many more smaller e-retailers have joined the bandwagon.

But it is a bandwagon, as retailers generally have yet to prove a return on investment in social marketing. Still, retailers have great faith: In a recent Internet Retailer survey, for example, 30.5% of retailers said social network presences will perform better this year than tried-and-true paid search.

The following is a guide to the Big Four social networks: Facebook, MySpace, YouTube and Twitter. Research and measurement giant The Nielsen Co. has provided Internet Retailer with data profiling each network. And two leading social marketing experts and four retailers with successful social network presences offer a lay of the land and strategic guidance.

They say merchants must monitor and listen to what is being said about them and where it’s being said to determine which social networks are a good fit. That’s the first step into the exciting but uncharted waters of social network marketing.

Facebook: The new king of social networks reinvents itself for brands

There was a time when MySpace ruled the roost, but the tide has turned. Between June 2008 and June 2009, the number of unique monthly visitors on Facebook jumped 198% to 87.3 million while the number on MySpace grew only 6% to 62.8 million, according to research and measurement firm The Nielsen Co.

Perhaps more important to retail marketers, MySpace, most experts agree, has been taken over to a significant degree by bands and other entertainers. While there still is opportunity to be had for retailers on MySpace, the social network’s focus is being narrowed.

“When you compare Facebook and MySpace, Facebook members are more engaged with the network, more active. And there are more things they can do,” says Dan Shust, director of emerging media at interactive marketing firm Resource Interactive. “Facebook is becoming the social network for everybody.”

It’s also becoming the network of choice for brands: 56.8% of the top 500 e-retailers have a page on Facebook versus 28.6% on MySpace. Shust and other experts say this is not just because of Facebook’s broader appeal but because of a major strategic shift. Last fall, Facebook redesigned the pages that businesses create, making them more interactive and, most importantly, making it possible for those pages to become part of a company’s Facebook fans’ home page news feeds. Now brands can go to consumers, as opposed to hoping consumers remember to visit their favorite brands.

“In the past people would become a fan and maybe visit your brand page a couple times. Now if you become a fan of a brand, the brand becomes like a personal friend on your home page,” says Paull Young, social media strategist at social marketing firm Converseon Inc. “This allows brands to distribute compelling content and keep fans engaged over time.”

That’s the goal of multichannel beauty products retailer Sephora USA Inc. It offers on its Facebook page, among other things, special Facebook fan-only promotions, online and in-store event information, videos, photos, polls, and discussion boards. And it’s looking into creating an interactive beauty-themed application for its more than 160,000 fans, says Julie Bornstein, senior vice president, Sephora Direct.

Facebook offers a variety of opportunities that go beyond conventional online marketing. Retailers can use a fan base as a virtual focus group, for example. They can see through Facebook profiles what interests and motivates their customers, and respond accordingly. And they can create applications that connect fans with staff or other fans on a one-to-one basis to discuss products and answer questions.

Sephora recently used Facebook to preview Sephora Favorites, 10 exclusive sets of best-selling products. “This generated buzz around the launch,” Bornstein says. “And through discussion on our page it allowed us to gain key insights into what our fans are most excited about for future product development.”

MySpace: It’s falling out of favor, but still offers opportunities for some

The once mighty MySpace is falling out of favor with many Internet users and even more Internet retailers.

MySpace had been losing monthly unique visitors for awhile until in June they grew 6% year over year. Its features and functions have been stagnant compared with the ever-widening functionality of Facebook, experts say, especially since Facebook redesigned its brand pages. And MySpace has a reputation for being the place for bands, not brands.

“MySpace is in a bit of trouble,” says Dan Shust, director of emerging media at interactive marketing firm Resource Interactive. “Brands we work with are not wanting to invest in something that’s been experiencing negative growth for awhile.”

And Facebook is innovating within a highly structured environment, where every user and brand page has a common look and feel, unlike MySpace, which has a graphical freedom that actually may hurt more than it helps.

“On Facebook, profiles look the same; that structure is a strength compared with MySpace, where things can look like a crazy mashed-up party, which is not a strength with older demographics,” Shust says.

Still, MySpace remains one of the biggest sites on the Internet. MySpace is one part of Fox Interactive Media, the fifth most visited set of properties on the web, according to research and measurement firm comScore Inc. Facebook on its own ranks No. 6, YouTube No. 1 as one part of Google Sites and Twitter on its own No. 46.

“MySpace has become less popular with brands, but it still draws a huge audience. It’s all about looking to see if your target audience is there,” says Paull Young, social media strategist at social marketing firm Converseon Inc.

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