MySpace’s self service display ad product, called MyAds, officially launched on October 12, less than a month ago. Advertisers can bypass the normal sales routine, use a Flash tool to create their own display ads, and run them on a cost-per-click basis. The minimum CPC rate is $0.25.
Demand for the product was immediate and significant, we’ve heard from multiple sources close to the company. Average daily revenue, say our sources, is $140,000 – $180,000, which means MyAds is at least a $50 million/year business for MySpace already.
MySpace would not comment on the story.
Our sources say that a large number of ad arbitragers are trying out the system, as well as many of the millions of music artists that have MySpace pages. Those artist ads are doubly profitable for MySpace, since the ads link back to MySpace web pages, driving up page views and additional advertising impressions.
Outsiders are estimating that MySpace revenues for the fiscal year ending June 2009 will reach $1 billion. It’s clear that MyAds will be a significant driver of revenue growth. 2008 revenue was estimated to $750 million.
Facebook has a similar product to MyAds that allows advertisers to pay on either a per-click or per-impression basis, although Facebook ads can only contain text.
They probably didn’t comment for your story because its UTTERLY RIDICULOUS to extrapolate a yearly revenue estimate based off 3 weeks of data from an unofficial source in the middle of a financial crisis immediately after launch.
@Ryan – great comment. I LOL’d for real.
what’s up with the haters
It is still new. Yes sure many are giving it a try and there is some real excitement in the air. I was tempted as well myself for one of my clients but ugh… I hate new product launches and will rather wait it out so things settle down a bit.
Best,
Mike
http://www.wannadevelop.com/
25 cents per click is too much, you can advertise on Google, MSN and Yahoo for less. Also conversion rate is very important.
I dont think that MySpace’s audience, which is mix of very different type of people, convert to ads really well. May be myspace has developed some magic targeting technology, but still how much can you know about the user on myspace?
I guess this jump in spending is a result of emarketers trying to test the system and see if they can use it for arbitrage, and its known that arbitrage is not good, myspace will take action to slow them down, and all arbitrages will leave the website, which will result in less than half of advertisers.
0.25c is really to high a minimum CPC, I know they don’t want to sell their traffic for free but its hardly the most targetted traffic. Seeing as they don’t have many ways of filtering high quality vs low quality traffic on their site like Google do they have to charge this high minimum CPC. Will be interesting to see if the revenues are still high once the arbitragers and initial interest fades and advertisers start to examine their ROI.
No doubt with projected number though financial crisis may effect a bit…
I’d like to point out that MySpace ads are still not available outside of CA, UK and US.
Also: Facebook ads DO alllow images, but only in combination with text ads, while myspace seems to like banners a lot more.
Way to early to say anything concrete right now. Advertisers are gonna hold me back in light of the credit crunch.
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This should give TC the perfect model for measuring FB revenues. Just extrapolate and you’ll realize they are not making nearly as much as was claimed in a recent TC post.
We are thinking of using the MySpace Ads platform but I am confused by the headline with the detail of the post.
The detail says
“Average daily revenue, say our sources, is $140,000 – $180,000, which means MyAds is at least a $50 million/year business for MySpace already.”
whereas the headline says $50m per month
Nik… I was confused at first too… but it should actually say “MySpace MyAds Product – a $50 Million Business – Just A Month After Launch…. the author of the article messed up
@Nik You should read the last four words together, so Michael ment “only a month after the launch”
@elvirs: I agree that 25 cents as a minimum is far to high. I try to buy traffic on other sites for around 7-9 cents per click.
But since we run an open community ourselves, it is good to see that community-based advertising solutions are being picked up nicely by advertisers without “a man in the middle”…
looks like a short period to get annual forecast on – the fact that they advertise it just makes me think that their cash is almost out and they need to bring more soon.
my comments at http://www.commentino.com/orim
I used both MySpace and Facebook while helping out some local candidates, and I was impressed with the results from both of them. Facebook gave us more traffic for the money, but MySpace allowed us to reach a bigger audience even though it cost us a bit more. I’d say we picked up a good 4,000 votes from the two sites, which may have decided the election for us although it’s a little hard to know for sure.
Eats Shoots and Leaves?
Michael (or anyone else for that matter), do you know the revenue estimates for Facebook’s ad service?
1-5 cents a click´d be a very good deal. if myspace ads think about all ad sense users who could switch or add myspace as their main revenue source, they could get a pretty good deal
I have heard the product allows long tail advertisers to access MySpace’s Hypertargetting platform, which may be why the CPC is so high.
Just a rubbish post like many ohter stupid assumptions previously produced or by-produced based on diferent sources of techcrunch.
The problem with MySpace is that they are very popular in USA only. Unless they make a broader presence in countries like China, India, Japan, Russia…whatever business campaign they come up with not be significant.
http://www.livbit.com
How big is the online ad market in Russia and India these days? I suspect if you took all the countries you mentioned, multiplied them by two, it would still be smaller than the us ad market. So i wouldn’t dismiss the relevance of this model just yet.
@Ryan ROFL.
http://vidsonly.blogspot.com
Dumping a few hundred a month into now testing a few things, works pretty good. Wish there was some better conversion tools.
This is where Rupert Murdoch’s contacts are taking over. Great to see a web content business making a killing. I don’t know if Facebook users would go for this..I think you would see some further backlash.
25 cents per click is indeed too much – We HappyTutors.com has been promoting our service on Google for much less rate and receiving pretty good result. We’ve also tried FaceBook – FaceBook charges similar CPC as MySpace. So far no one can beat Google in terms of ROI.
BTW, check out http://www.HappyTutors.com
~ Connect Tutors with Students & Parents ~
Mike,
A small correction: The Facebook Ads system does allow advertisers to create ads with both text and an image. When advertisers go into the online interface, they are given the option to upload a photo as part of the creation process.
Thanks,
Matt
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