At a Merrill Lynch conference in Los Angeles on Tuesday, MySpace will unveil the full scope of its plans to target ads to every MySpace user. In testing for 6 months, and the result of their Strategic Data Corp acquisition, it's a plan that could finally turn their 110 million active users into cash.
The results have been remarkable: during tests, the targeting increased the likelihood that a user would click an ad by 80%. Richard Greenfield of Pali Research predicts revenue increasing from $40 million to $70 million per month by 2008. At $70m per month that is knocking on a $1bn per year run rate - the next shift in advertising models is emerging.
Research Brief for Thursday, September 20, 2007 from The Center for Media Research states: "Revenue Science, Inc. announced the results of a study on consumer receptivity to online advertising, conducted by Jupiter Research, found that more online consumers are consistently more receptive to behaviorally targeted ads than to contextual advertising, outperforming contextual by as much as 22 percent in some categories. "Marla R. Schimke, vice president of marketing at Revenue Science, said "... (this report shows that) behavioral targeting is more effective than contextual advertising for advertisers, publishers, and for consumers... This study... reaffirms our belief that Internet users favor advertising relevant to them personally..."
"The responses of more than 2,000 people surveyed revealed that, across all advertising, 14 percent more online consumers are more receptive to behaviorally targeted ads than to contextual ads, representing 63 percent of the total audience.""For advertisers, the study shows that behavioral targeting outperforms contextual advertising in terms of consumer attention by at least 10 percent across 14 major product categories, from Financial Services to Consumer Electronics to Pharmaceuticals to Fashion and Style.
- 17 percent more online purchasers of computing products are more receptive to behaviorally targeted ads
- 18 percent more online auto purchasers are more receptive to behaviorally targeted ads
- 20 percent more online telecom purchasers are more receptive to behaviorally targeted ads than to contextual ads
"The necessity of using attention-getting behavioral targeting was reinforced by responses regarding online behavior. The study found that more than 75 percent of online shoppers shop once per month or less and that the majority only research a product once or twice before buying.""Schimke concludes that the research shows behavioral targeting is the solution to maximize a limited opportunity to move consumers through the purchase funnel." The study also found that the behaviorally-receptive audience
- Is more likely to have a higher income
- Spends more money online
- Shops online more frequently than others
"According to the study, behaviorally targeted ads fare better among both high and low online spenders. Among people who spend more than $500 online annually, 10 percent more were defined as behaviorally receptive and, among people who spend less than $500 online annually, 17 percent more were defined as behaviorally receptive.""With behavioral targeting, marketers will be more effective in reaching both a higher value audience and the overall audience of online shoppers," added Schimke. To download the complete study, please visit here.
Sharing the booming advertising revenue
Media and social networking platform operators are capturing the value of user generated content and statistical profiling of user preferences and affinities enables a new and valuable mechanism of reach. As posted previously, the next killer move will be when we the people are enabled to monetize our content, our presence and our contributions to social networking platforms.
This will be accomplished, and already is within some new networks just launching, when users migrate to the new models in mass and the current operators and media will follow because we are the drivers of traffic and creators of content.This shift will explode user interest, activity and contributions to networks simply because for the first time there will be a promise of economic gains shared between the media, the enabling technologies and those that make all valuable, we the users. Economic incentives are strong attraction factors to human behavior.
What say you?