One of the advantages that the Internet has over traditional media is that advertisers can better target their ad campaigns based on user demographics. MySpace has been working on their user demographics data and according to the New York Times they have improved the likelihood that members will click on an ad by 80 percent on average!
“We are blessed with a phenomenal amount of information about the likes, dislikes and life’s passions of our users,” said Peter Levinsohn, president of Fox Interactive Media, who will talk about the program at an address to investors and analysts at a Merrill Lynch conference in Los Angeles on Tuesday. “We have an opportunity to provide advertisers with a completely new paradigm.”
This technology is important to MySpace because if it works,, it will make advertisers much more willing to advertiser on the site. Richard Greenfield, the managing director of Pali Research, predicts that MySpace’s fledgling program will help increase MySpace’s current revenue to $70 million a month from $40 million a month by next year.
“This is a critical evolution of the MySpace business model envisioned from the day News Corporation bought it,” Mr. Greenfield said.
What I find the most interesting piece of the new MySpace advertisers platform is that in November, MySpace will set up an automated online system to allow smaller companies to aim at MySpace users with their ads without ever talking to a human being at Fox. Hmm, what other company lets you set up ads without having to talk to a sales person? Oh yes, that would be Google. If the MySpace program is half as successful as Google’s adwords program then MySpace will become a major player in online advertising next year.
One criticism that many advertisers have with MySpace, is that expect for a few small niches, most advertising receives a lot of impression, fewer clicks and even less sales. If the MySpace demographic program works as well as advertised and advertisers get a platform similar to Adwords to manage their campaigns, then a lot of advertisers are going to be taking a second look at MySpace on the next six months.
Facebook has been taking momentum and market share from MySpace over the 3-6 months. This move might well swing the momentum back to MySpace.
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