MySpace has seen some impressive traffic growth for its mobile web site and its mobile applications over the last year. And the social network is capitalizing on it by developing new revenue streams and new ways to get its users’ data on more devices.
This is the second part of my interview with MySpace vice president and general manager John Faith from earlier this week at the Mobile World Conference. Below, he discusses how the company has built up a local sales force to sell ads in countries around the world, boosted interest in mobile ads, and is following through on the promise of location-based services.
As Faith implies — and as MySpace chief executive Chris DeWolfe mentioned in his MWC keynote earlier today — the social network is also eyeing ways to allow portable music playlists on mobile devices, as well as mobile e-commerce. You can read the first part of my interview with Faith, here.
VentureBeat: Let’s talk about monetization. Do you have an international in-house mobile advertising group? How do you deal with international partners? For example, when somebody advertises on MySpace Mobile in India, are these Indian brands?
John Faith: We’ve got both local and international brands which advertise on mobile. We have a dedicated sales force in each of these countries; we’ve got offices set up in our localized territories; we have over 30 international territories. There’s always a local sales force which works with the local advertisers and brands. We really do a lot to educate them on the value of advertising in mobile.
VB: Please explain.
JF: The mobile advertising opportunity has been around for quite some time but it’s really only come to fruition recently. A lot of that is on the content providers. The advertisers certainly see the value of advertising in mobile by being able to reach their customers when they are not on a PC. And the type of communication is different, too.
VB: Can you give me an example?
JF: A good example is our work with McDonald’s. McDonald’s came to us and said they wanted to update the Big Mac Chant. So users were able to upload audio and video of Big Mac Chants online. Then we created a branded campaign on mobile, a mini-site on mobile where they could download ringtones as well. So we used mobile as a continuation of the online experience. In the future users will be able to capture that audio and video on their mobile device and upload it straight away. That is, of course is even more compelling. We hope to take things to this level in the near term.
VB: What’s the percent of MySpace web advertisers who have converted to being mobile advertisers?
JF: Across all the different categories — whether it’s consumer goods, auto, the fast food industry, entertainment industry, etc. — all have tried mobile advertising with us. So there’s a taste and need for it and they see the value of mobile advertising.
VB: Can you give me any numbers on advertisers’ mobile budgets? One of the mobile industries’ big stories of the last few weeks has been that advertisers are starting to do “upfronts” [an industry term for large volume advertising bookings by a brand for the whole year].
JF: We certainly have upfronts in our sales strategy of our mobile advertising campaigns as well. So that has come around nicely.
VB: Where do you see your mobile advertising strategy going in light of more and more location-based services becoming available?
JF: I think that form of mobile advertising is still at a very nascent stage. Certainly with where we want to take MySpace Mobile in the future, we want to throw location into the mix. Everybody has talked about how location is becoming important and we can see a lot of value in it. Think of mobile coupons, for example. MySpace has a self-serve MyAds platform which is a very generic and viral approach to marketing and advertising for small businesses. We can target advertising on the MyAds platform to all MySpace users for initial buys of $25 or more. So we also add relevant information about users’ location on top of that. So all in all this is a very powerful platform for everybody in the world.
VB: Would it be a fair assessment to say that there are two parts of your mobile advertising strategy? For one, you’ve got your own in-house advertising. And then you work with partners like AdMob, that provide their own advertising to your users. Do you disclose any data on what the ratio is?
JF: We don’t disclose data right now, but we may in the future. We do work very closely with third-party advertising networks that sell global mobile campaigns. They’re great to work with, and are coming up with new and innovative ways how to advertise on mobile platforms.
VB: What do we look at when we talk about advertising on the MySpace ad platform? Banners, text, SMS messages — what else?
JF: Examples of mobile ad campaign calls to action include: register your email/mobile number, click to call, find a store or dealer, coupon or voucher for in-store redemption, download free content, video streaming, learn about a product etc. In the near future, we look at performance-based advertising. Even before that you’ll see integration of advertising into our mobile application experience.
VB: What does MySpace do to attract online users to their mobile properties? I’ve seen some ads recently.
JF: Yes, we’ve recently re-engaged in advertising for our mobile products. We’re also doing the same for the re-launch of our mobile web site. But we integrate this marketing into a user’s experience to make it relevant for them. For example, a notification in your friend’s update feed will soon appear. What will happen is that you’ll be able to get a message that may say something like “Hey, Matthaus sent you this message from a Blackberry.” This helps drive viral adoption and could be an incentive to get a Blackberry or get the mobile app because the message poses the question, “How do I do that too?” or “I didn’t know I could do that on a Blackberry.” When we launched on the RIM device, we did a lot of branded campaigns around that, too. We worked very closely with our partner, Research In Motion. The traditional banner campaigns certainly work, but the viral parts of these campaigns are pretty powerful tools, too.
VB: What about the the relation between advertising and platforms. Do you see more interest in advertising on your iPhone app vis-a-vis the other platforms?
JF: We see increased demand for mobile advertising on apps across all platforms. And that interest comes from handset manufacturers, the OS, and it also comes from our advertising partners.
VB: What about prices you get from the advertising market? I’m aware that you don’t disclose numbers. But there’s the argument that mobile social networks have lower CPMs [the cost per thousand ad impressions] because they are seen as inventory of lesser quality. What’s your take on that? Or do you get feedback from advertisers like “You are MySpace, you are a great brand?”
JF: We think that MySpace is a great brand to advertise on. But you are absolutely right. We have yet to advertise within our applications. So let’s talk in three to six months on how this is going. But there’s a move — specially in the recession period — to “show me this is working.” Performance-based advertising is very relevant within mobile. And we are working with the ad networks and our partners on how to gather metrics on mobile.
VB: Let’s move on to the more strategic part of the interview. Device makers are looking at how to integrate social networking data — Palm is already planning to do this with Facebook for its Pre — and Nokia and Facebook are already talking, apparently. A recent report suggested that “contact information stored in Facebook would be integrated with the phone’s address book: When users looked up a contact, they could see whether their Facebook friends were logged on, send them messages and post comments on their profile pages.” To me, this could be the next distribution model in mobile because such features enable users to upload, share and enjoy content and rich media directly from the address book. Now, here at the MWC, I’ve been talking to many MSNs, and it seems that there are quite a few being approached by device makers and have initiatives running in this direction. What’s your take on that and what about MySpace Mobile? After all, you guys recently began working with Nokia, too.
JF: Certainly. What I think is that you see a movement in the industry to more integrated and aggregated address books. So that’s not just complementing or supplementing information from your address book at MySpace, but also integrating all the user’s networks into one single address book. And if it’s easier for the user and it gives him more relevancy to have everything aggregated in one spot, that’s great. And if users need to get specific information from MySpace — we are certainly up for that. As a company and certainly within the industry there is another trend to a more open, social web, and I hope that we are spearheading that initiative.
VB: Are the device makers approaching you about this? Do they come to you and say, “Hey, we need to sell our devices to operators, and we recognize users want apps and social networks, and we need to develop phones that take this demand into account?”
JF: Yes. We are in conversation with both the device makers and carriers about deeper level integrations besides having an app on top of their architecture or a mobile web site. We always want to provide value for our users to come back to MySpace online. So there’s an added value by supplementing other parts of software with MySpace information. And we are looking at that with both operators and handset makers.
VB: Let’s talk about the issue of additional costs on carriers. Mobile social network usage means more mobile data, which also means higher costs for them. There’s a discussion here at MWC about how data plans will evolve for network customers because of the rising data costs. Is this an issue when you deal with operators? Do you discuss new revenue models with them?
JF: With the majority of carrier deals we do revenue share with them on advertising-based revenue as they send affiliate-based traffic to MySpace. From day one we had monetization value in the carrier world.
VB: Do you talk numbers on that?
JF: No, not with carriers. Our approach is reflective of the fact that we are driving data usage through them and they should be getting part of the revenue. Certainly, whether it’s a mobile social network or a streaming video, or whether it’s online gaming in mobile — that data usage has to be a concern for carriers. MySpace Mobile will work with carriers to figure out a monetization stream with them, including the architecture level.
VB: What about application programming interfaces in mobile ?
JF: So we’ve got two sets of APIs. One API which we’ve had for a year now is about enabling a full set of services. Putting up premium applications is the other one. Whether it’s Blackberry, the iPhone or the Android experience or Helio — a MVNO — back in the states. And then there’s another one called MySpace Ideas. If you are a developer and you want to incorporate MySpace in whatever you do, that’s the one. So now the question is how do we start creating wrappers for mobile developers. These could be Symbian wrappers or Java wrappers so you could integrate MySpace data into any software development kit.
VB: So I wonder, in terms of your organization you are set on growth. What does this mean? Will you have more languages? Will you hire more internationally? Will you talk more to operators? Will you increase your international advertising teams? Will you invest in mobile advertising technology?
JF: All of the above. MySpace as an entity views mobile as a huge strategic growth opportunity. So we view the area as something we need to increase our efforts in as the industry explodes. If internet technologies are adopted, the world becomes a smaller place, and you can have content which is discovered and goes around the world quickly. Having mobilized local content is relevant, like how we’re having a MySpace Secret Show with two local bands in Barcelona at the Mobile World Congress. So also having a global experience is very important, too.
Eric Eldon contributed to this article.
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