MySpace To Google: Learn How To Sell Advertising, OMMA Report
Thw Wall Street Journal claims the richest man in the world scaling back on his “social graph” usage is ”the most damning indictment of ”social networking technology.” REALLY? Bill Gates is also scaling back on what he does at the company he founded, Microsoft: Any personal computer technology “indictment” there?
There was a Facebook indictment yesterday, it came form MySpace. Arnie Gullov-Singh, VP Product Mangement, Fox Interactive Media, had his competitive “social networking technology” fun at the OMMA Behavioral conference in New York City, at the expense of Facebook, as I present in MySpace to Facebook: NO ‘Reach, Relevancy, Results’! OMMA Report.
I asked Gullov-Sing about the future prospects for MySpace advertising, both in-house prime and the lower grade, out sourced Google variety. My question to panelist Gullov-Singh:
I appreciate your calling Facebook a “competitor”; Mark Zuckerberg refuses to return the favor.
In any event, do social networks risk becoming too popular for their own good? As user generated content grows like a weed, what will be the impact on ad quality and pricing? Will users be subjected to more “punch the monkey” ads?
Gullov-Sing avoided the seemingly undeniable inventory glut issue, hailing MySpace is popular among advertisers and its CPMS are doing just fine, while offering no hard data to support his contentions.
After the panel, I sought specifics from Gullov-Sing and pointed out that MySpace partner Google itself lamented MySpace ad quality and pricing, in an indirect dig during its Wall Street conference call.
Gullov-Sing told me that there are a lot of reasons for Google not doing well at MySpace. I suggested to Gullov-Sing that perhaps MySpace is not providing necessasry internal MySpace data to Google so it is best able to optimize.
Gullov-Sing indicated to me that Google doesn’t understand the sales process and thinks technology is the answer to everything.
If Google really did learn how to sell advertising like the rest of the media world, though, would its MySpace performance really improve? After all, MySpace has its direct hands on the “good” MySpace ads goods, while Google is an outside ad serving player, playing around with runnerup inventory.
MySpace inventory distribution appears to match the industry standard put forth at the OMMA conference by Peter Horan. The CEO of IAC Media & Advertising said a sites’ advertising is generally about half direct-sale, premium ad inventory and half of lower quality, resold by aggregators.
I have been questioning the quality and “salability” of MySpace’s inventory available to Google since the $900 million deal was announced in 2006 during a joint Fox Interactive Media and Google conference call.
Fox Interactive has continued to retain exclusive rights to directly sell its most desirable, and most lucrative, display advertising to Fortune 500 advertisers. In addition to Google being exclusive search and keyword targeted advertising sales provider, the agreement has provided for Google to have an option on My Space’s unsold, “remnant” display advertising: a “right of first refusal on display advertising sold through third parties on Fox Interactive Media’s network.”
Google CEO Eric Schmidt was well aware of the MySpace monetization challenge when he made a long term, expensive pledge to MySpace, but believed the vaunted Googley technology would prevail. Schmidt in 2006:
“We are not going to cover MySpace with ads,” he said, noting that Google carefully analyzes what sort of ads encourage users to click on what sort of pages to produce the most revenue. “It turns out the right answer is to show fewer, better ads.” (NYT)
It turns out, though, that Schmidt’s Google did NOT, and still does not, have the right MySpace answer, demeuring now that Google is “still in the learning stages of how it monetizes social networking”:
We have had a challenge in Q4 with social networking inventory as a whole and some of the monetization work we were doing there didn’t pan out as well as we had hoped. But we are continuing the efforts and we are still optimistic about future quarters.
MySpace, on the other hand, is optimistic about the present!
PLUS: MySpace To Google (Round 2): Text Clicks Do NOT Rule! VideoEgg Report
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