November 5th, 2007

MySpace Will Let Users Aim Advertising at Site Members

By Joseph Menn
Los Angeles Times

The move will come as categories of interest are increasingly narrowed

MySpace said today that it soon would allow not just big advertisers but also everyday users to target increasingly narrow slices of MySpace’s membership. The move is a potentially large step toward boosting ad revenue and peer-to-peer commerce at the News Corp. property.

Starting early next year, small businesses and individuals will be able to use templates to put together banner ads and specify the characteristics of the audiences they want to reach, MySpace executives said.

The ad buyers will be charged only for the viewers who click through to be taken to the advertisers’ profiles.

The move takes advantage of MySpace’s continuing effort to group its users into increasingly specific categories. For the last few months, the company has let dozens of big companies aim ads at users that MySpace has identified as sports fans or movie fans, for example.

Starting this week, 100 smaller categories are being added, including specific sports and genres of movies, and MySpace will take orders from any of its regular advertisers.

Adam Bain, an executive vice president at MySpace parent Fox Interactive Media, said there would be 300 categories by the end of the year.

“We’re looking at everything people put into their profiles and what their friends are into,” said Arnie Gullov-Singh, a Fox Interactive vice president.

The announcement comes a day ahead of the planned introduction of a new advertising system by MySpace’s chief rival, Facebook Inc. MySpace is larger by most measures, but Facebook is growing faster and lately has attracted more attention from technology companies.

Facebook’s plan also is expected to use information from user profiles and may target ads to those users even as they view pages elsewhere on the Web.

MySpace’s so-called hyper-targeting takes into account the obvious—such as hobbies and interests posted by MySpace’s 110 million registered users—but also more subtle clues, such as the pictures they use in the background of their pages and what they blog about.

Improving revenue from brand advertising has been the top priority at MySpace for some time. But the company has also been looking for ways to profit more from purchases on the site.

Last week, for example, it announced a deal that makes Zazzle.com the exclusive provider of music-related merchandise sold over MySpace pages, which include profiles for thousands of musicians. MySpace will get a share of the proceeds.

MySpace hopes to strike deals similar to the Zazzle contract that would enable businesses to sell many sorts of goods over MySpace. Gullov-Singh said musical groups would be logical early adopters of the self-serve advertising system.

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