MySpace Gets Up Front and Personal With Targeted Ads

The service is similar to the Beverly Hills, Calif.-based firm's ad platform for large businesses, HyperTargeting, which made its debut in November 2007. Like HyperTargeting, MyAds makes it possible to create ads geared toward specific audiences for placement on News Corp.-owned MySpace, as well as on other sites.

For example, say a new indie band with influences from Pearl Jam and Soundgarden is planning the release of a new CD at a club in Seattle. MyAds would enable the band to create an ad targeting MySpace users whose personal pages include text or images of Pearl Jam or Soundgarden or the word "grunge music."

As of Monday, about 3,400 small businesses and individuals have used the MyAds platform. MySpace has 75 million U.S. users.

It's All About Targeting

"Giving advertisers small and large the ability to target their ads to a very specific, finite group of people based on the things they express about themselves in their MySpace profiles is valuable," Debra Aho Williamson, a senior analyst at eMarketer, told the E-Commerce Times.

"What this new self-service platform does is offer that platform to small businesses who want to create advertising and pick and choose the targets themselves," she said. "Facebook has already offered something similar for a while -- at least for several months -- with similar capabilities."

The new MyAds service is ideal for anyone who doesn't have hundreds of thousands of dollars to spend on massive advertising and marketing campaigns, Williamson said.

"It opens up millions and millions of profiles with lots of rich information in them to small businesses," she noted. "If you're a small business, someone with a club or a bar or using creative services, this makes sense."

Transparency Is Critical

Last fall, MySpace rival Facebook saw its own attempt at targeted advertising blow up in its face. The site launched a service called "Beacon" that tracked what users did online, drawing the ire of privacy advocates and bloggers. The problem arose because Facebook failed to adequately inform users about what it was doing.

MySpace's new MyAds initiative very clearly tells users what the service does and has an opt-out option for those who don't want their membership data shared with anyone else.

"I think you have to respect the fact that MySpace did this so above board and so visibly," Louis Columbus, senior manager, enterprise systems at Cincom Systems, told the E-Commerce Times. "They did it with a lot of transparency. They've come out -- and it was all over the blogs last night -- and they've been very forthright about their intentions. It's important to have an opt-out option, which MySpace does."

Facebook's Beacon service served as a valuable example of how not to launch an ad platform, he said.

"The Achilles' heel of social networking sites is that they often aren't as forthcoming about business models with their users," Columbus said. "It generated an uproar with privacy advocates, and the blogosphere had a field day with it."

Following Yahoo's Lead

MySpace isn't the only Internet player seeking to exploit the fast-growing online display ads market.

In late September, search engine giant Yahoo (Nasdaq: YHOO) announced the launch of APT -- a new platform designed to make it more efficient for advertisers to reach their audiences with display advertising.

The way MyAds works is similar to APT: It crawls Internet sites for clues about user habits on certain sites in an attempt to hit them with more relevant display ads.