Through its just-completed acquisition of ad tech firm Strategic Data Corporation, Fox Interactive Media (FIM) is finally putting to use the mounds of MySpace data it gleans from user profiles, blog posts and bulletins. Till now, the News Corp division has done little to capitalize on the information that, when paired with SDC's ad optimization technology, will allow for highly-refined audience segmentation and contextual micro-targeting. FIM is also ramping up its sales team, anticipating its new targeting capabilities will translate into premium ad dollars, which might put it in more direct competition with the likes of Yahoo, AOL and MSN.
"I don't think we would have done this acquisition if we didn't have MySpace," FIM Chief Revenue Officer Michael Barrett told ClickZ News.
"Given the mountain of data we had on our members, specifically at MySpace, we really needed a customized ad solution to bring this to market," he said. After inspecting a "ton" of potential acquisition candidates to handle the ad management back end for a portion of the display ads on its sites, the online media outfit chose SDC, which offers a display ad serving and optimization platform. FIM will use the system to manage ads targeted to all sites in its network, excluding FoxSports.com, which partners with MSN. FIM properties include IGN Entertainment, Rotten Tomatoes and Fox.com.
"The driving reason to do it is to make more money selling ads," said Barrett.
Though SDC's technology will be deployed initially to serve cost-per-click and cost-per-action ads, Barrett expects to put it to use for managing higher-value CPM campaigns down the road. About 60 percent of ads running on FIM's sites are performance-based; yet, despite that, about 70 percent of the firm's ad revenue is derived from CPM-based display advertising, indicating the higher value advertisers place on impression-based premium placements.
FIM aims to boost the price of inventory currently sold at lower rates through third party networks, employing the SDC system to micro-target ads using MySpace user profile and registration data along with demographic data and information from user-created content. "Over time we'd like to move those people up the funnel," noted Barrett.
The newly-obtained technology will enable FIM to create lifestyle audience segments and ad packages for performance- and CPM-based ad campaigns. The company has not yet employed user profile information to target display ads, but it has used the data to better target Google sponsored text ads, according to FIM spokesperson Ann Burkart.
Another part of the ad revenue-building strategy, said Barrett, is an effort to grow the FIM sales staff. Over the past six months the firm has been hiring sales people, and plans to double the current team of about 10 to 15 people. "We plan to get more aggressive in courting these advertisers," Barrett continued.
Selling more premium ads direct to brand advertisers could position FIM, especially with its MySpace traffic-driving powerhouse, as more of a threat to portals like Yahoo, AOL and MSN, which tend to attract brand advertisers. FIM could also gain by enabling cross-network buys. Although the firm has run almost no cross-network ads, a campaign for "X-Men: The Last Stand" was served on both IGN and MySpace last year, said Burkart. "We're working to enhance our ability to sell across the whole network," she added.
FIM expects to integrate SDC's technology with its own within 60 to 90 days, and the small firm's fourteen employees will eventually move to FIM's Beverly Hills headquarters. According to Burkart, FIM will continue to serve SDC's current clients, including ad networks EuroClick and Specific Media. FIM will also continue to work with other third party ad serving partners including DoubleClick.
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Kate Kaye was Managing Editor at ClickZ News until October 2012. As a daily reporter and editor for the original news source, she covered beats including digital political campaigns and government regulation of the online ad industry. Kate is the author of Campaign '08: A Turning Point for Digital Media, the only book focused on the paid digital media efforts of the 2008 presidential campaigns. Kate created ClickZ's Politics & Advocacy section, and is the primary contributor to the one-of-a-kind section. She began reporting on the interactive ad industry in 1999 and has spoken at several events and in interviews for television, radio, print, and digital media outlets. You can follow Kate on Twitter at @LowbrowKate.
March 19, 2014