The new program targets small and medium size businesses and allows users to create their own advertisements using a template hosted by MySpace. Advertisers can upload images, logos and text to create banner advertisements.
The program is similar to Google’s AdWords which lets advertisers bid against each other to be displayed. In Google, advertisers bid on keywords and the ads are displayed when a user searches for those keywords.
Under MyAds, ads are targeted based on self-disclosed demographic information of MySpace users. Advertisers can target users based on gender, relationship status, age, zip code, and even musical preference. Like Google, advertisers pay per click with rates starting at about 25 cents.
MySpace was once the most popular social networking site and is now losing ground to college-based Facebook. Recently, MySpace launched a music library giving users free access to thousands of songs in an effort to win users back from Facebook.
However, Facebook established an advertising program similar to this months ago. Facebook lets advertisers target their ads based on information in a user’s profile. Facebook also has more developed tracking tools and offers more flexible pricing options.
MySpace hopes the program will let small organizations such as local bands or small businesses advertise on MySpace and reach out to specific demographic groups.
Critics are concerned that the timing is off. Most small businesses are cutting back in these slower than usual economic times and are not looking for new places to advertise.
Still, targeting based on user disclosed data gives advertisers a chance to really segment and target their audiences as well as employ analytic tools to track their results. This just might increase MySpace’s revenue and give them the capital they need to compete with Facebook.