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.
100 people are on the ad targeting team, developing algorithms than scan the details of your MySpace profile and return highly targeted ads: the NYTimes gives the example of someone who lists Donald Trump as an idol and Fortune magazine as a favorite magazine. That user would likely see financial ads. A more likely scenario, considering the MySpace user base: a user lists an artist as a favorite and sees an ad for his/her music (in fact, clicks on music-related ads are up 70% in testing - no doubt this was a focus area and musicians are sub-categorized by genre and other variables).
Another revelation: MySpace will open up to "long tail" ads in November, allowing small advertisers to pimp their wares. It's not yet clear whether this is a rival to Google AdSense or Facebook Flyers: most likely both. The example given is a local band advertising to music fans in the area.