NEW YORK News Corp.'s Fox Interactive Media said it has bought Strategic Data Corp., an ad technology firm, in the hopes it will bump up the value of the massive amount of ads served on MySpace.
SDC, based in Santa Monica, Calif., and founded in 2000, provides an ad-serving technology that uses yield optimization to make sure a publisher gets maximum value out of each ad it serves. FIM plans to use the technology with its properties that include MySpace, IGN, AskMen.com and AmericanIdol.com. FIM properties generated more than 40.4 billion page views in January, according to ComScore, with the vast majority coming from MySpace.
"SDC will enable us to realize the full potential of our massive online network," FIM president Peter Levinsohn said in a statement. "SDC's expert team and technologies combined with our own top-notch engineers and vast audience will enable us to ensure the optimal performance of our advertising for the benefit of clients and consumers alike."
News Corp. chairman Rupert Murdoch recently said MySpace is generating about $25 million per month in ad revenue, growing at about 30 percent per quarter. Yet despite the fast growth rate, the site lags far behind revenue generated by sites of similar size, with generic ad impressions often priced at less than $1 CPMs because FIM is unable to target them to visitor interests.
"We have a mountain of data of personal information on users," said Michael Barrett, chief revenue officer at FIM, referring to interests users post on their MySpace profiles. "We've never been able to take that data and put it into a format that a third-party ad server can use."
FIM and other Internet properties are looking to sophisticated technology to increase the value they get from their ad inventory. Many top sites use Rapt, a New York technology firm that has software to help publishers determine the best price for their ad space. Yahoo last October bought 20 percent of Right Media, which operates an exchange to have advertisers bid on ad impressions. In all cases, the systems are designed to increase the CPMs for non-premium ad inventory, which has exploded on user-created sites like MySpace.
The SDC purchase is the first FIM has made since Levinsohn took over. His predecessor, Ross Levinsohn, led a buying spree that included MySpace and gaming network IGN.