• by Diane Mermigas , December 26, 2008

MySpace has introduced a flurry of new applications and services as it transforms into an advertising-supported social portal, chasing the big bucks spent on Yahoo and Google's YouTube. It is aggressively leveraging its 75 million active monthly users, each with about 111 friends and spending an average of four hours monthly in ways that Madison Avenue and Hollywood cannot ignore. When you can claim nearly 12% of all Internet minutes in the U.S., people will listen. Jeff Berman, MySpace president of sales and marketing, discussed future plans with MediaPost.

MediaPost: Explain why MySpace, a social network, is going after portal ad dollars.

Berman: We were very much in a social networking bucket, going up against a handful of other companies that are getting a pretty small share of online marketing budgets; and we were winning a large portion of those budgets. But 100% of an ad social networking budget is still not as good as winning 15% of a portal budget. So, in the last six months or so we have emerged into the social portal space where we are competing with traditional portals like Yahoo, and we're winning.

MediaPost: Why is that?

Berman: In comparison to portals, there are at least three major differentiators working to our advantage. Our splash page provides unparalleled brand opportunity. No one remotely comes close to our reach and scale to offer the same branding opportunity--from quick-service restaurants and automotives to entertainment and packaged goods. We have targeting capability that is different and better than anyone else out there, from the massive data users put on their MySpace pages that we are able to target. And we work with advertisers to target the right audience for a campaign, to hit users with the right message at the right time. But this is an immature marketplace, and things are changing all the time. What we want to do overall is to balance revenues with relevance.

MediaPost: How do you best leverage your unique coverage?

Berman: Our engagement numbers are off the charts because users are spending more time here. At the end of the day, you have to fish where the fish are. The average MySpace user is spending an average four hours a month on the site. Those numbers are even more meaningful now that we are going up against portals like Yahoo--not just social networks, where tens of millions of dollars will be allocated. We do integrated online, offline, on-air opportunities that are extraordinary that now extend to labels and artists in My Space Music.

MediaPost: What is your overall strategy for monetizing online video, and how will mobile be part of it?

Berman: We are the second-largest video site out there. YouTube is the biggest by a significant margin. We focus on the full continuum of the content curve--looking at professional Web-produced content, we're looking at user-generated content, and create the best user experience while we figure out how to monetize.

Mobile will be a big part of it in years to come, but in the U.S., we're still years away. In Web video, everyone is experimenting with different advertising formats and solutions--trying to understand what users want, will accept and tolerate. Everyone believes video has enormous long-term potential, but there is no silver bullet yet for how to monetize it online.

MediaPost: When does MySpace begin viral marketing, recommendations and community involvement in ads?

Berman: That is a away to utilize video. We're very early in the process. We are a community first before we are a music or photo or video site. We have developed our video property, and build it with the community features in mind. A lot of our video growth has been driven from simplifying that process through blogging and posting video to MySpace pages. As we have improved the user experience, we have seen significant growth in video becoming part of the community experience.

MediaPost: How important is it to your mobile strategy that MySpace is on Gphone, iPhone and RIMM?

Berman: I don't want to minimize it. It's very important. But the monetization of mobile is still very early, and for the monetization of mobile video--it's even earlier. That said, we are a popular app on the iPhone and the Gphone.

MediaPost: What kind of metrics refinement do you seek?

Berman: The advertisers all want more and more data. For our advertisers, it's not just about a click-through rate. They want to know more about who is seeing their ads. The viral component is extremely important; so is the momentum effect and how that is working. We have a standard set of data that we provide to our partners, and we're constantly looking at a better way to provide better service to them. We are very focused that everything on MySpace is iterated and optimized.

MediaPost: Is the recession and advertiser pullback hindering any advancements you had planned?

Berman: Adding MyAds is a major step. We anticipate it will bring in new advertising products and enable brands big and small to reach their target audiences in the best possible way. There will be more such moves to come. The economic environment cannot stop us from providing more value to our brand partners in order to monetize. We're a for-profit business.

MediaPost: How is it for you doing business during this economic slowdown?

Berman: This environment is actually good for us in finding talent because you have a lot of companies cutting back. We know the next best new idea will probably not come from someone with a vice president title or higher; it's probably going to come from a 22-year-old who is deeply immersed in what's happening and living and breathing it, and is wildly creative. These new hires will bring in their ideas and their friends--and that will create a network effect in a different form, and is very powerful.

MediaPost: How are your partnerships faring?

Berman: There are a lot of different ways to partner with folks in content and advertising. Our new partnership with MTV is one way. It's all about building and pushing content predicated on a virtual circle of friends and a virtual circle of discovery. They put content--an artist, music or video--on their MySpace page or their blog or their playlist, and pushing it out to their friend. They build a discussion around it or play with it.

MediaPost: Do you consider MySpace the new networked space?

Berman: Everything is very fast-moving. You are seeing changes that previously took a decade happening in just a few months. So we don't really think about things in network terms. We think about the guys sitting in a garage with a great idea because five years ago, MySpace and YouTube didn't exist. They were ideas still being born. That's mind-boggling. So, MySpace and Google and Fox and NBC are all really important companies. But you can't just spend all day thinking about the guys who have made it. We bring people in from the best-of-breed companies like Yahoo, eBay and MTV as well as developers and producers right out of school, to give ourselves the best shot at the best mix of new ideas.