A year ago Mike Barrett moved from AOL to News Corp. (NWS) with a heady mission: Turn MySpace and the rest of Fox Interactive Media’s properties (IGN, Fox Sports, and now Photobucket) into cash cows. Barrett’s official title is chief revenue officer, and he’s made significant headway: When News Corp. announces its FY07 Wednesday, FIM will boast revenue well in excess of the $500 million goal it had floated last year.
Barrett talked to us last week about MySpace’s new ad targeting program, FIM’s performance compared to Google and Yahoo, and the limits of Facebook’s marketing abilities. The news: profile targeting is in beta (as of two weeks ago) and will soon be expanded into 100 segments. The targeted ads could command a 20%-50% premium over ordinary ones.
Peter Kafka: Late last year you were talking about a program that would let marketers target MySpace users based on their profile information. What’s the status of that?
Mike Barrett: We’re in beta right now. We launched about two weeks ago with 11 segments: 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.
Within the next week or so we’ll take it public, probably on a limited charter basis so we can learn a little bit more. By October or November we’ll have broken these 11 segments into 100 segments. So you can target people who are not just interested in beauty, but makeup. Or people not just interested in travel, but safari travel. Being able to break down the segments even more finely will add more value to marketers.
PK: How much more value? Will the premium for these ads be 20%? 50%?
MB: We’re looking at pricing now, and we haven’t settled on a ratecard. But those are definitely within the ballpark.
PK: FIM revenues should be well over $500M for FY 2007 and perhaps $1 billion next year. That’s impressive, but when you compare your user base to Google’s or Yahoo’s and compare revenue, it looks underwhelming. Is that a fair comparison?
MB: I think yes, if you do that maths, compared to those guys, everyone’s under-performing. That’s a fair analysis. There’s no question that capturing the value of those users, even at huge number like a billion, there’s upside…
PK: Now you’ve got Facebook competing with you for social media ad dollars. How do you pitch against them?
MB: The usual pitch for us is size. We reach more folks 18-34, we have a larger reach. But also we feel that our programs for a marketer are more media-centric. Facebook is growing fast and it’s a terrific property. But if you take a look at what it can offer marketers, it’s a little bit limited in terms of the design of the site, the features and functionality. It’s much more of a utility-based communication site. MySpace has that platform, but on top of that it has other opportunities, like channels, music, videos, fashion.
PK: You’re based here but your properties are based in California. How much time do you spend on each coast?
MB: This has been a delightful past month — it’s been all New York. On a normal month it’s probably a week and a half out west, and the rest here.