MySpace's 'HyperTargeting' Ad Program Off To A Strong Start

MySpace's new "HyperTargeting" ad program has led to a 50% to 300% gain in click-through rates for participating advertisers and a 50% gain in CPM rates, according to a Fox Interactive Media executive.

While touting early results of the social networking site's behavioral ad platform, which launched last month, FIM Chief Revenue Officer Michael Barrett also assured a packed room at the UBS 35th Annual Global Media and Communications conference Monday that MySpace's ad strategy wouldn't run afoul of privacy concerns that have tripped up rival Facebook's Beacon program.

"We've heard loud and clear there's a growing desire for regulation for the Internet in general, and now targeting specifically," Barrett said. "We are going about [targeting] in a very up-front, opt-out way."

MySpace's HyperTargeting platform lets advertisers and agencies more easily create advertising aimed at specific user groups based on the personal interests expressed in members' MySpace profiles. Unlike Beacon, which broadcasts Facebook users' activities on outside sites, Barrett said the data mined on MySpace for advertisers' benefit is from information "freely and openly" provided in users' profiles.

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He also stressed that the program was intended to provide more relevant ads to MySpace users. "The No. 1 request we have from people isn't 'cut the ads,' because they know then they'll have to be charged. It's 'serve me the right ads,'" he said.

The platform classifies users according to 10 key categories such as sports, music, movies and games. From those basic groups, members are subdivided into 549 different segments such as college football, baseball, NASCAR, and soccer under sports.

Among the 100 marketers initially signed up for HyperTargeting are Electronic Arts, Procter & Gamble, Ford, Toyota and Taco Bell. So far, music, games and consumer electronics were among the most popular advertiser categories in the HyperTargeting program. Advertising by fast-food chains such as McDonald's and Wendy's was also a strong segment, Barrett said.

MySpace last month also announced the launch of a do-it-yourself ad platform called SelfServe by MySpace that will allow small and medium-sized business to create their own targeted ad campaigns by uploading copy and creative and then track the results. Barrett surmised that unsigned musicians and bands--for whom MySpace is a key marketing tool--could be among the big customers for the self-serve ads. The service is being readied for early 2008, and the minimum ad buy is $10.

MySpace gets about 40 percent of its ad revenue from brand advertising, 30 percent from different types of performance-based advertising and 30 percent from search, through its ad partnership with Google. News Corp.'s Fox Interactive Media unit expects to generate about $1 billion during its fiscal year ending June 2008, of which MySpace would account for about $800 million.

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