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When News Corp. announced its Fox Interactive division — the unit built around MySpace — would miss its targets, COO Peter Chernin offered three excuses reasons why. Since we noted them yesterday, an agency exec whose clients advertise on MySpace took a moment to respond to Chernin's three points:

  • Chernin: MySpace users click around so much and create so many pageviews that ad inventory supply outweighs advertiser demand. Ad buyer:

  • Not unique to them. Networks have tons of inventory, search has tons of inventory. Untargeted or contextualized inventory is hard to sell. Targeted, contextualized inventory is in demand and should continue to be. My Space has enough professional content to be attractive for big brands. Their "hyper-targeting" is effective.

  • Chernin: It's hard to tell why a particular user is using MySpace, so targeting ads are difficult. Ad buyer:

  • True. And social networks may not provide the diversity and revenue potential as other segments like search or networks which have specific high value content and audiences like upscale travel or mortgage buyers. Social networks still offer the hard to reach young audience and entertainment and telecommunications advertisers are among the biggest online. There is room for social networks to learn how to be more effective with their target audiences as regards advertising reception and impact. It is a very new channel, fair to need more time to learn. I do firmly believe in the long term viability and value of social networks for marketing.

  • Chernin: FIM is having a hard time coming up with convincing metrics to sell advertisers on the value of a friend's recommendation. Ad buyer:

  • Well we do believe that word of mouth and peer pass along and influencing is genuinely valuable, but again hard to quantify. MySpace did do a good study with a third party called 'Never Ending Friending'that was a step in the right direction.

Finally, we asked what News Corp. ought to be doing to boost its sales. Our source responded:

We do use MySpace. Our clients are interested. We like their hyper-targeting and expanded content channels like TV and music. I think for MySpace it's about the novelty of their channel and the need to figure out how to position the product and deliver value to clients in a tangible way.

In other words, if MySpace could figure out how to boost advertisers' sales, it might be having less trouble with its own.