MySpace overtakes Yahoo in display ad views

MySpace overtakes Yahoo in display ad views

But the social network site has struggled to draw top-dollar ad rates relative to Yahoo, feel analysts

Yinka Adegoke

Thursday, August 28, 2008

SAN FRANCISCO, USA: Yahoo Inc has lost its lead of the U.S. market for online display advertising to MySpace and its parent company News Corp's Fox Interactive Media and MySpace, new industry data shows.

Fox Interactive's collection of sites, led by MySpace, drew 56.8 million advertising views in June, compared with Yahoo's group of sites which had 53.1 million, according to data from Web audience measurement firm comScore this week.

But while the statistic marks the rapid growth of MySpace in terms of advertising viewership, analysts say the social network site has struggled to draw top-dollar ad rates relative to Yahoo, known for attracting premium advertising rates.

"Social media gets all these ad impressions but not necessarily get the dollars," said Colin Gillis, analyst at Canaccord Adams. MySpace's cost per thousand (CPM) page views are significantly lower than that of Yahoo, he said.

A MySpace executive said it is closing the gap with rivals such as Yahoo, Time Warner's AOL and Microsoft Corp's MSN after the revamp of its home page in June, which has drawn in big-name sponsors such as Sprint and Wendy's.

"Our CPMs have grown significantly," Jeff Berman, MySpace president of sales and marketing, said of June's growth spike. "Category by category, year over year, we're up double digits."

According to comScore data for advertising impressions, June was the first month that Fox Interactive has surpassed Yahoo, which saw ad views dip by around 12 percent from May.

While it may be too soon to say that MySpace has overtaken Yahoo for good, comScore data shows that Yahoo's share of the display market has been trending down since July of 2007.

Yahoo questioned comScore's measurement methodology.

"We believe there could be issues with the measurement that could be misrepresenting Yahoo and we are reviewing comScore's methodology and working with them to resolve these issues," Spokesman Adam Grossberg said in a statement.

ComScore spokesman Andrew Lipsman countered that Yahoo's month-on-month drop in display ad view was an "organic decline" unrelated to any changes in the firm's measurement methods.

Yahoo has often championed its leadership in Web display advertising -- based on comScore data -- even as it lost ground to Google Inc's dominant lead in search advertising. Yahoo agreed in June for Google to supply it with ad services to run alongside Yahoo's own Web search system.

Richard Greenfield, analyst at Pali Research said the redesign of the MySpace home page earlier this summer created a more compelling advertising proposition for brand marketers such as Sprint and Wendy's.

"It shows how the redesign is allowing MySpace to reach far beyond the 'social media' advertising category and to target far larger portal advertising budgets," said Greenfield in a blog posting for investors. He said this was a negative omen for big portals like Yahoo as well as MSN and AOL.

©Reuters