News Corp. has taken the next big step in the move toward commercializing social networks today by expanding MySpace's advertising platform, allowing advertisers to deliver precision-targeted banner ads based on user-created data.
Advertisers can now pinpoint exactly who they want to reach, based on data collected from users' personal profiles, the groups they join and the messages they post for their friends. For a studio looking to promote its latest vampire film, the technology represents the difference between advertising to movie fans en masse and reaching the 205 members of the Doomed Moviethon Horror Review group and others like it more directly.
MySpace has also launched a new service that makes it easier for small businesses to advertise on the world's largest social networking site. Together the two services aim to significantly strengthen MySpace's position as it attempts to outpace chief rival Facebook Inc. in the race to capitalize on advertisers' growing appetite for targeted advertising opportunities.
Although MySpace boasts 110 million active users - more than twice Facebook's 51 million - the site has been on the decline in recent months, while Facebook continues to grow at a robust pace. With rumours of a similar targeted advertising product on the way from Facebook, MySpace is looking to regain some of its lost momentum.
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Most advertising online today allows advertisers to target people based on location, age and gender, but analysts say social networks promise to deliver much more focused results as a result of the wealth of personal data users post. It's one of the reasons why Microsoft Corp. paid $240-million (U.S.) for a 1.6-per-cent stake in Facebook in October and why MySpace, which News Corp. bought for $580-million in 2005, is now worth upward of $11.6-billion, more than 20 times its sale price, according to chairman Rupert Murdoch.
MySpace launched its HyperTargeting platform in July with a select group of 50 advertisers. The service broke down users into 10 broad "enthusiast" categories - such as music, movies and sports - and allowed advertisers to cater their banner ads specifically to those groups. "We've been just blown away by the results," said Travis Katz, international marketing director for MySpace. "Our advertisers are seeing performance increases of more than 300 per cent in terms of things like click-throughs versus ads that are targeted through demographics."
With today's announcement, MySpace has expanded those 10 enthusiast categories to more than 100 interest-specific groups and has made the targeting technology available to all its U.S. advertisers. The advantage is even more precise marketing. MySpace expects to deploy HyperTargeting internationally in 2008.
"We're the first company that's been able to take this idea and turn it into a reality," Mr. Katz said. "This isn't a theoretical thing, or something we're planning to do in the future, but it's actually something that we're doing today and we're rolling it out to more advertisers. I have no doubt that the other social networks are thinking about trying to do the same thing, I just think we're much further ahead in our thinking and in our ability to execute."
MySpace will also be unveiling a new software service - dubbed SelfServe by MySpace - designed to help small businesses create their own banner ads, upload them to the site and track their success rate.
The software will enable small businesses to take advantage of MySpace's targeting capabilities, which will allow them to spend less to target their immediate audience. For example, a band from Toronto would be able to target local MySpace users when going on tour across Ontario without having to pay for ads that will show up on profiles of music fans in Delaware.
Mr. Katz said it's the firm's way of applying the user-generated ethos of MySpace to its advertising functions. "It's really the idea of empowering all of these users - small business, independent film makers, musicians - to leverage social networks and do advertising in a way that is efficient, smart and easy to use."
source: http://www.theglobeandmail.com/servlet/story/LAC.20071105.RMYSPACE05/TPStory/Business
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