To: Ross Levinsohn, President, Fox Interactive Media
Fr: Eric Frenchman
Re: What to Do With MySpace


Mr. Levinsohn,
I read with interest Sunday's NY Times article regarding MySpace and then I subsequently wrote a post on my website titled My Those Are Low CPMs at MySpace. It occurred to me that while you probably read with interest the NY Times article, you probably missed my personal post so I thought I would take a different tact since my post was more helpful than the article from a strategy perspective. In that post, I wrote that you bought a conversational marketing place with MySpace and you should stop trying to force-fit the kiddies of your site into a nice bunch of consumers of typical marketing messages. Why do I think I can offer this advice? Simple, I buy a ton of media and most recently I managed the online media buying for Harrisdirect the 17th largest US internet advertiser; plus, you work on MySpace so you are open to conversations, right?
MY THOSE CPMs ARE LOW
According to the article, you are currently selling banner advertising at the rock bottom price of 10 cent CPMs which is really, really pathetic. You probably think you have a lot of big name advertisers like E*Trade, Verizon, Cingular, University of Phoenix, but my guess is that these advertisers are not really MySpace direct advertisers but part of a media buying network like Advertising.com. I have no inside knowledge, so I could be wrong, but I doubt it because these companies need credit worthy, over 18 customers and MySpace is not a site that they would normally fish in. Sure, they probably grab a customer once in a while with your 70 million or so profiles, but then again if I dropped a fish hook in the ocean with no bait I'll eventually catch a fluke. Instead of dreaming of getting higher CPMs from traditional advertisers, try a different strategy and use the strengths of your group of consumers.
MySpace STRENGTHS
Obviously you have a ton of traffic every day since you are the second largest server of pages on the internet behind Yahoo, but who is using your pages and why are they there? Simple, you have a social network which makes it very easy for kids, 14 years and older, to quickly build a homepage and list their likes and dislikes, post photos and videos, find and connect with friends, and check out and meet new people. I set up a page myself and you know what, you really don't gather enough information to really know who these people are. So, stick with what you know, these kids are there to socialize not be a shill for deodorant products.
CONVERSATIONAL MARKETING ONLY
Kids, of which my wife says I'm still one (plus I do have two little ones) socialize regarding music, video, downloads, latest gadgets, cool toys, movies, clothing, video games, comic book superheros, World of Warcraft, sports, baseball cards, friends, dating, and maybe even latest cell phones, but that's stretching it a bit. Plus, depending on the age, politics. In fact, my 12 year old nephew and I discussed his distorted view of the President during Passover Seder. Kids don't want to sell for car manufactures, banks, online discount brokers, toothpaste, deodorants, or any other traditional internet advertiser. Any dreams of gaining higher CPMs from that group is just a pipe dream.
Stick with fun, social marketers and build web portals for these types of companies plus sponsorships. Let kids link to these profiles and push what their likes and dislikes are. You could also let marketers test products, make special music releases, special invites for concerts, and etc. Also, these marketers crave data and information on who is using their product and when they fall in and out of popularity, so of course you could provide it to them for a fee. You could create a new metric called YourBUZZ which measures popularity of a product with your MySpace participants. You get the idea. Think of the rates and dollars you could generate from this model and if you have a few billion leftover impressions, you would now be able to sell them at a higher rate because you'll have more demand and less supply. See how easy it is to make money on the internet?
Ross, I hope you found this memo helpful. You seem like a very bright executive with a lot of pressure and sometimes marketing executives have trouble seeing through the forest to the trees, so I thought I might help. Stick with what you bought, a social network for kids and stop trying to turn it into Foxnews.com.
PardonMyFrench,
Eric
April 25, 2006