MySpace will give users the option of whether they want to participate in a targeted advertising system that mines their profile's information, a senior company official said on Tuesday.
MySpace's HyperTargeting system will look at a person's interests listed on their public profile and then classify the user into particular interest-specific categories, said Travis Katz, senior vice president for MySpace International. Advertisers will then be able to target categories of users that may be most receptive to their campaigns, he said.
But in a nod to the growing concerns over how personal information is handled by social networks for advertising, people will be able to opt out, Katz said. MySpace will also not collect and store other personal information on users, he said.
HyperTargeting will first be rolled out in the U.S. and then likely to the U.K., he said. "We're still pretty early in the process," Katz said during a presentation at Internet World, a Web marketing and technology show, in London.
In preliminary tests, Katz said the HyperTargeting system resulted in a 300 percent increase in the number of click-throughs on an ad, one way that the success of a Web advertisement is measured.
Targeting ads to users based on their behavior and interests is seen as a precise way for advertisers to reach potential consumers, but privacy concerns abound, and advertisers face a potential backlash from users.
MySpace's ad technology comes from Strategic Data Corp. (SDC), a small company acquired by MySpace's parent company, News Corp. in early 2007. SDC specialized in ad placement technology.
Katz said MySpace is also developing a Web-based platform where advertisers can purchase ads without having to interact with a direct sales force, as is done now.
MySpace is making "lucrative" revenue right now, mostly through display and search ads, Katz said, but he did not offer any numbers. Mobile advertising so far is "small today but potentially huge in the future," he said.
With 200 million registered users worldwide, MySpace remains the top social networking site.