MySpace misses target, bigger push on ads

Last year Rupert Murdoch, chairman of News Corp, said he expected Fox International Media's (FIM) revenues to hit US$1 billion. They won't. The business unit, which owns MySpace, has found its online advertising has grown more slowly than expected and has signalled that the target won't be met by June, the end of the company's financial year.

According to the Financial Times, FIM said it will be close to its target, but already steps to remedy the situation are underway. FIM's advertising sales is to be reorganised and a new unit created called the audience network, which will exploit what the company calls its hyper-targeting system. This uses information, volunteered by site visitors, to serve the most appropriate adverts to them.

Last November, after completing a trial of the hyper-marketing system, MySpace claimed that  the click-through rates were 300% higher for targeted ads than for the others on its site. It also said it had signed up more than 50 advertisers to participate in the scheme including Procter & Gamble, Microsoft, Ford and Toyota.

Now hyper-targeting is to be used across all of FIM's properties, including Photobucket, a photo-sharing site; American-Idol.com and the Rotten-Tomatoes.com film review site. It will also manage the ad sales for third-parties.

Adam Bain, who developed the hyper-targeting system, is to lead the audience network. Peter Levinsohn, president of FIM, was quoted in the Financial Times saying, "The platforms developed under Adam's leadership are highly scalable and can be leveraged by sites both inside and outside the FIM family".

Of course it remains to be seen it the click-through rate will be maintained once the novelty wears off, how many users will opt out and whether adverts will annoy visitors, as they have on rival Facebook.

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