MySpace Pulled In Ads To Hike ‘Horrific’ Click-Throughs

Simon Daglish

The first ad you see on MySpace UK’s homepage is a cheapo text spot from a company which buys cars from people who are leaving the country – hardly on-brand with MySpace’s pitch as a hip destination for music-loving youngsters.

Removing this “random stuff” and other “less salubrious advertising” was a key motiviation behind MySpace UK’s announcement last week that it would be taking its advertising in-house, commercial director Simon Daglish told paidContent:UK.

The move will see MySpace breaking off contracts with several online advertising networks, including Advertising.com and Microsoft (NSDQ: MSFT) Advertising, in the process. The company will be losing money in the short term, Daglish said, to bet on better business prospects in the longer term: “I think to an extent this will mean less advertising in the short term. But we’re in this for the long-term game.”

It also sounds like the only way to go is up in this situation: MySpace’s The average UK current click-through rates on ads is “horrific,” at 0.1 percent, he said. “Obviously it’s not working.”

But it’s not just MySpace. Daglish blames the ad network model that has become standard among many large web properties. “Agencies keep on beating down that same ad networks door, looking for an even bigger ad, and even more in-your-face. But they’re missing the point. Consumers are rejecting these ads.”

Daglish believes that reworking the model, and having better control over the inventory, will contribute to better revenue growth in the longer term. Some other points he made:

— International upheaval – including layoffs and outsourcing commercial operations of MySpace sites in Brazil, Argentina, Spain, Italy, Poland, Mexico and Turkey to to sister company Fox International Channels – has little relation to what is going on in the UK, said Daglish. “The UK a sovereign entity. We have no plans to farm out our activities. It is a question of ambition and size, and we have big ambitions here,” he said.

— Currently, advertising is the biggest source of revenue for MySpace UK. Daglish says that MySpace is keen to try to develop further revenue models around the advertising relationships, but current crop of advertising won’t allow it to. “Increasingly our customers are asking us to give them more insight into the audience and how best to create social communications, but you can

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