After taking a dig at the huge, undifferentiated, and messy “social networks” like MySpace and Facebook, which are the press' and investors current darlings, I was gratified to read two recent articles about smaller, “niche” social networks and their new appeal to advertisers targeting specific audiences. These social networks complement their members' real world activities, things they feel passionately about; many of these networks came together organically, out of need to share knowledge and experiences. You read it here first.

“Can Social Networks Sway Shoppers?”in Internet Retailer's most recent issue, describes several strategies for creating and advertising to niche social networks. The research isn't all in yet, but on first blush, the answer is: yes. And more efficiently than by running links indiscriminately on their giant counterparts. IR describes the experience of Abebooks, a seller of new, used, rare, and out-of-print books, which became a part-owner in LibraryThing, an organically grown website that helps book collectors to catalog and share their collections. According to Abebooks COO Boris Weitz,

We did not first sit down and make a strategic decision to invest in social networking. Like many others we simply were watching this whole new space. But then LibraryThing came to our attention. We asked the network’s president to make a presentation to our senior management team, and that led to our investment.

Red Herring, the popular investor-oriented technology magazine, in its October 2 print edition, features an article, “Niche Marketing,” which describes the growing profitability of sites such as Dogster and Catster (dog and cat owners), Boompa (car enthusiasts), Famster (family-oriented fare), Traineo (fitness and weight loss), Tot Jot (parenting), and YouthNoise (teen activists). Each has advertisers (direct and affiliate) or is in talks with advertisers. The article focuses on Dogster, with 250,000 members, which is gathering a portfolio of large, influential advertisers like Disney Entertainment. Says John Squire, analytical software firm Coremetrics' vice president of product strategy:

Advertisers are beginning to see they can spend very little and still get a big return using niche networks. Last year, people wondered, 'Is [targeted advertising] a wave that is really going to come in? And now they see that it is, and the wave is getting bigger and bigger.

(An online version of the article isn't available, but you can buy the entire archived edition of Red Herring, in digital format, for $3.99 from Zinio.)

The niche social networks' individual advertising revenues are small, and they generally require advertisers to carefully integrate their ads with the niche networks' content, lest the ads drive off ardent members who don't see value in them. In the long term, however, the niche social networks probably will exceed the horizontal networks in their lasting appeal, member activity (including recommending and purchasing relevant goods and services), and their revenues.