MySpace Woos Small Business Ads

Bacon Salt’s founders Justin Esch and Dave Lefkow are going out on an advertising limb. The gourmet seasoning makers used MySpace and Facebook profile pagers or text ads placed next to Google search results to promote their products. Then MySpace encouraged them to test a new ad service made specifically for businesses like theirs. The company paid $500 for a trial campaign.

Much to their surprise, blog buzz about their product picket up, their site traffic doubled and online sales jumped 30%.

"We've seen really good results," Esch says. "This experience taught us there is more that we can do to get word of mouth out there."

MySpace is hoping more small businesses will follow soon. The social network owned by News Corp takes the wraps off MyAds, a new strategy to advertising which allows individuals and small businesses to create their own banner ads. The service will also let advertisers decide who they want to target on MySpace and then check the results of their campaign. MySpace is aiming at advertisers who want to spend campaigns under $25,000.

Cheaper Substitute for Traditional Marketing

Taking a chance on social network advertising won’t be easy for some companies, especially as economic crisis forces many businesses to cut down their marketing costs.

"Social networking is still unproven," says Jeremiah Owyang, an analyst at Forrester Research.

MySpace is betting that small businesses will use online ads as a cheap alternative to traditional marketing. "In these economic times, marketers want to use their dollars more efficiently," says MySpace founder Chris DeWolfe. "This is the most efficient way you could do it in a low-risk way."

Until now, MySpace catered to large advertisers and ad agencies. Search advertising led the way in making advertising affordable and easy for individuals and small businesses. But MyAds sells small-business display ads on social networks, giving small businesses an opportunity to reach local or national niches among MySpace's 122 million users.

"It looks really good," says Edward Cotton, director of strategy at ad firm Butler Shine Stern & Partners, which handles online marketing for clients that include Converse and Mini Cooper. "Finely targeted ad opportunities for small business are going to be an emerging market."