Peter Kafka

Recent Posts by Peter Kafka

MySpace Campaigns for Ad Dollars–Will It Have to Come Clean After the Election?

Attention New York publishers and advertisers!!!

Those people pestering you to vote for “Roi Asap” today? They’re not working for a real candidate!

This warning comes to you from a MySpace worker bee, who is up in arms about a promotional stunt from the MySpace ad sales team.

“Roi,” you see, is a semi-clever pun based on a term MySpace ad chief Jeff Berman used in a press release promoting the targeting technology last month (as in, “Return On Investment”).

MySpace is supposed to hire dozens of fake campaign workers to push Roi/advertising targeting today at midtown offices in Manhattan.

I don’t see the problem here. But the MySpace employee thinks the fake vote-soliciting is “ridiculous” and wants it “exposed.” Okay, done.

More interesting will be quarterly earnings call from MySpace owner, News Corp., on Wednesday afternoon, and what CEO Rupert Murdoch has to say about his prize Web property’s recent performance.

News Corp. (NWS) earnings calls are always entertaining, but Wednesday’s call should be more intriguing than most. It will be the first time Murdoch has sounded off in a public forum, since the economy went into free-fall.

Murdoch had already sounded the alarm bells last spring. And, at the D: All Things Digital conference in May, he predicted that the U.S. would be in an 18-month recession.

More recently, during the company’s August earnings call, he said that local television ads had fallen off a cliff. (News Corp., owner of Dow Jones, is also the owner of this Web site.)

But even as Murdoch has predicted gloomy times for some of his company’s assets, he and his execs have talked up the prospects of MySpace. During the last call, News Corp. COO Peter Chernin said Fox Interactive Media, the News Corp. Web unit dominated by MySpace, would be able to increase revenues by 30 percent during the coming year.

Predicting FIM revenues has proved tricky for News Corp., which had to publicly back down last spring from a promise it had made in the summer of 2007. And now that Web advertisers are finally admitting that they’re seeing weakness, that 30 percent may be difficult to achieve too.

Given that the year-ago quarter was underwhelming, and that the last quarter covers the July to September period–most of which was catastrophe-free–there’s a good chance FIM will report in-line ad sales on Wednesday.

But pay attention to whether Murdoch and Chernin are able to reiterate past projections for the rest of the year.

I’m told that the ad-targeting technology MySpace is pushing is indeed boosting revenue at the site. And the video plans the company announced yesterday are interesting as well: An automated ID program will let publishers like Viacom (VIA) unit MTV Networks automatically place ads on user-uploaded content that they own.

Google’s (GOOG) YouTube announced something similar earlier this year.

But those programs only work at the margins of MySpace’s business, and are long-term plays. The most important part is getting big advertisers to buy big campaigns on MySpace’s prime real estate.

Such as its homepage, where a one-day campaign was going for an average of $500,000 earlier this year, and where particularly intrusive campaigns could garner $1,000,000 for 24 hours.

If those rates are softening, then it won’t matter how innovative the company is in the near term: It’s going to have to reset expectations.

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work