MySpace Music Plugs In Audio Ads

To offset sluggish revenue, MySpace Music is turning to in-stream audio ads, a first for the playlist-based Internet radio service.

To handle ad sales, MySpace has signed with TargetSpot, which represents a network of both pure-play Internet radio providers and some of the largest radio groups.

Although MySpace Music reaches more than 33 million unique monthly users, per comScore, its reliance on search-based visual ads hasn’t paid off. During News Corp.’s quarterly conference call last week, Rupert Murdoch, chairman and CEO, blamed the poor performance of the company’s digital media group on the low ad revenue at MySpace. “[MySpace] is not yet where we want it,” he said.

Focusing on MySpace Music could pay off, as the Web music segment has been booming. According to eMarketer, Internet radio advertising is forecast to hit $394 million by 2011, making it one of the fastest-growing media segments.

As the exclusive audio sales rep for MySpace Music, TargetSpot’s reach across its network will nearly double from 20 million unique monthly listeners to as many as 40 million, making it by far the largest representative of online audio advertising.

Since December, MySpace has worked with TargetSpot to find the right balance between music and ads in order to keep listeners tuned in and to attract sponsors. TargetSpot has kept the frequency of the spots — for advertisers such as ABC-TV and McDonald’s — extremely low.

“It’s very much about having a sensitivity to the space,” said Eric Ronning, co-president of sales for TargetSpot, which has helped Internet radio providers such as AOL, Yahoo and Slacker increase ad revenue. “We want to ensure the good user experience and a good environment for the advertisers.”

So far, so good, said a MySpace rep. “The response from our users has been positive. As always, we’re interested in hearing feedback from our community and the advertising community as we roll out new functionality,” the rep said.

See also:

“Brands Reveal Music Strategies”

“The Who’s Pete Townshend: Super Bowl Q&A”

“Music Goes Commercial”