A good post at business2.com talks about the recent testing MySpace (NWS-A) has done concerning targeting ads.
Here's a quick comment by Fox Interactive Media Chief Revenue Officer Mike Barrett on how they're practically going about it:
"The plan was to cume large segments in the most attractive lifestyles for advertisers: Auto, lifestyle, beauty, health, etc. We're testing it with house creative: If someone's been identified as someone who's interested in fashion, we target ads to them that have nothing to do with fashion, and then ads that would direct them to say, the MySpace fashion channel.
"Then we test the clickthrough and refine the algorithm, to make certain that this target audience that we say are fashion aficionados are truly going to perform better than if you just ran a fashion ad on run of site."
While the point of this post isn't to talk about the practicals of the process, I thought you would learn something from the brief explanation of the way MySpace is doing it.
The thing I want to talk about is the idea that more targeted ads wills hopefully mean higher prices for the network.
With the web portals losing some business to the social networks recently, it's interesting to hear MySpace officials talking about doing things to raise prices, as the reason some advertiser left the portals was because of lower prices at the social networks. At this time social networks are considered a scaled market, and the idea of targeting is to get niche pricing in a general demographic.
Will it work in this scenario? I'm not sure. People visiting general locations are still going there for general, not specific reasons. People going to niche sites on the other hand, will definitely be pretty easy to target; at least in the specific niche they're interacting with.
This isn't a negative about targeting I'm getting at, just that people with niche interests will probably always be more interested in finding advertised products connected to that interest when they're on the site where their interests lie, rather than on a general information sites.
Next post we'll talk about the difference between targeting, niche sites and general audiences.
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