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MySpace Woos Small Biz. Unlucky Timing?


I have a story up today about MySpace wooing small businesses. They’re opening up an easy-to-use, self-serve version of their targeting service called MyAds. Small biz owners and individuals can use it to buy targeted display advertising campaigns for as little as $25.

It’s smart of MySpace to reach out to this untapped audience and to offer them a way to reach specific audiences either locally or nationally from among MySpace’s 122 million members.

But the new service faces a few hurdles, as Jeremiah Owyang from Forrester points out. Social networks still don’t have sufficient data to demonstrate that their targeting causes people to consider buying or to buy products based on advertising. And when companies are in belt-tightening mode, they’re more likely to reduce display advertising, which typically focuses on brand building, than search-related advertising, which tends to have a more immediate and measurable sales impact.

MySpace founder Chris DeWolfe told me that expected small biz to turn to this service because it offers an efficient, low risk way to market in tough times. He says he expects MyAds to help raise the price of ads sold on the site, boosting overall revenue. Goldman estimates that last fiscal year, MySpace made $606 million in revenues(Fox Interactive Media brought in $856 million last year). It’s expected to bring in about $740 million next year (compared with $1.1 billion for FIM).


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