We will serve our own ads, thank you: MySpace

As its been reported everywhere from TechCrunch, the New York Times to some bark scrawling in the Amazonian rainforest, MySpace has launched its own advertising platform dubbed “My Ads”. While it’s not a particularly impressive moniker, it’s at least better than those Web 2.0 names which are irrelevant and usually unpronounceable.

Social networking sites running their own ad platforms are nothing new. Facebook, probably MySpace’s only major competitor, has been running PPC and CPM ads for ages, although it stumbled into a bit of trouble with its maligned Beacon initiative.

There’s enough discussion around the web about “My Ad’s” fairly limited targeting abilities, and the technology behind it. What I want to ask is: will this actually do anything to boost MySpace’s revenue?

To use a really crappy analogy, advertising and return on investment on social networking sites is a lot like the theory of black holes. Plenty of people talk about it, we sure know it exists, but ultimately all the results do is suck. (Get it, suck… black hole? Never mind.)

If you’ve had the fortune (or misfortune) to run any online advertising campaigns on social networking sites such as MySpace or Facebook, you’re probably aware that in 90% of cases the ROI is pretty dismal. While there is a ton of traffic on such sites, click thrus are minimal and conversions are even worse. Which is one reason why average CPM prices are so low on social networking sites: you can easily pay anywhere from 15c to 40c per CPM, which would be something of bargain, if you can actually get your campaigns to return any results.

At the end of the day, people go to MySpace to chat with friends, listen to music and generally goof off. Hardly the mindset advertisers want to target. It’s even more difficult for advertisers on sites such as MySpace, where the design is chaotic and usually overloaded with thousands of animating gifs and garish backgrounds. Whether My Ads can actually turn the social advertising model around – or at least improve on it – still remains to be seen.

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