This week, MySpace revealed that targeted contextual advertising is forthcoming on user profiles. From Marketing Pilgrim:
[MySpace] expect the advertising to jump 80% in click-through rate, while doubling their monthly revenues (to $80m).
They did not explain why they did not choose an extant contextual advertising platform, but it’s likely that they’d profit more from a home-grown solution.
This MySpace development follows last month’s Facebook news that advertising within user news feeds will be targeted to users based on the information in their respective profiles. (Facebook users won’t have these ads in their profiles yet, though.) The New York Times weighs in:
The companies hope that customizing ads to their members’ stated enthusiasms will improve the effectiveness of the ads and recruit new advertisers who want to pitch their messages to refined slices of the online audience. Fox executives also hope the technology can help MySpace recapture some of the momentum and attention that has recently gone to Facebook.
Last week, Facebook flyer ads, which can be posted directly by anyone on Facebook, went from a CPM model to a CPC model, taking cues from existing, auction-based search ad models. Will MySpace follow suit with a CPC system of its own? They probably have to and it’s not unlikely; MySpace is already working on a UI to automate ad buys. From the same NYT article:
In November, according to Michael Barrett, Fox Interactive Media’s chief revenue officer, the company will set up an automated online system to allow smaller companies to aim at MySpace users with their ads without ever talking to a human being at Fox.
As search engines increasingly encroach social-network territory (the recent launch of Yahoo Mash is one example), it looks like social networks are also picking up more search-like traits.