Hitting the Target
Millions of people have been sharing their likes and dislikes, hobbies and preferences with the world via their MySpace and Facebook pages. Now, the two biggest social networking sites are aiming to tailor ads based on whether you liked The Matrix or My Chemical Romance or Harry Potter and the Deathly Hallows, or not.
In late September, MySpace said it would use the personal details on users' pages and blogs to sell targeted ads, building on an effort it started earlier in the summer to tailor ads by 10 broad categories. Now the site is getting more granular and slicing those big buckets into smaller niche groups. The goal is to deliver ads based on favorite music, movies and other information. MySpace has said publicly that tailored ads increase the likelihood that its members will click on an ad by 80 percent.
Tailored ads are akin to behavioral targeting on the Web, which serves up ads based on presumptions about users' interests. eMarketer projects that spending on behavioral targeting will reach $1 billion next year and hit $3.8 billion by 2011.
The targeted ad program on MySpace could help the site grow its revenues in the face of increasing competition from Facebook. The newer site has been rocketing in usage, especially among college students and professionals. MySpace drew 60 million unique visitors in August, up 23 percent from a year ago, while Facebook attracted 19 million uniques, up 117 percent.
Facebook is also experimenting with targeted ads based on users' profiles and networking activities. But instead of banner ads or boxed messages to the side of a user's page, Facebook weave ads into a user's "news feed," a running update of friends' activities. Facebook plans to unveil a basic version of the ad service by late fall, with the long-term goal of making the system predictive - feeding ads to Facebook members for products or services they don't even know they want yet.