MySpace, Eyealike Debut Ad Platforms Against Recession Fears

With Silicon Valley venture capitalists telling their portfolio companies to tighten their belts for the recession, it's a funny time to introduce a new platform for advertising, which is likely to be hard hit as companies cut costs.

Yet ad platforms are exactly what MySpace and visual search startup Eyealike launched Oct. 13. MySpace MyAds is designed to help anyone from local retailers to musicians and politicians create targeted ads for the social network's 122 million users.

MySpace MyAds lets SMBs craft custom banner ads for specific audiences. Business owners can then analyze how their ad campaign is faring on MySpace. According to MySpace's instructions, MyAds looks easy enough for a GEICO caveman to create.

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Advertisers can either go to the MyAds site or click the Advertise link at the bottom of any MySpace page. Users create a display ad using the MyAds Builder Tool and select an ad price range from $25 to $10,000.

Users then target the customers with MySpace's HyperTarget technology, which gauges age, sex and geographic location against specific keywords within each users interest category. When the advertiser hashes out the creative and MySpace's customer support makes sure the ad is up to specifications, the ad can go live. MySpace charges the campaign when a user clicks on the ad. Users track ad performance with MyAds analytics reporting. This tool tracks impressions, click-throughs and a running cost on active campaigns.

The wide-range price point could be attractive to mom and pop shops, sure, but it is still unclear how the recession will warp the online ad market. Will Internet advertising dry up across the board or just be limited to massive, sprawling ad campaigns? It's unclear at this early stage.

Eyealike VisualAd, meanwhile, is billed as an image and video-based contextual ad platform for social networks and rich media. Eyealike CEO Greg Heuss told me that VisualAd is similar to Google's AdWords model, but instead of using keywords to target ads, the platform indexes, filters and classifies images and videos.

Also, unlike Facebook and MySpace ads that target demographics, the VisualAd platform analyzes facial features, skin color, hair, gender, as well as objects such as logos or product images in online images and videos to serve targeted ads.

VisualAd could be used to identify an infant's face in a user's profile image on a social network. The site could assume that the user has an infant and serve an ad about diapers or baby food.

Heuss believes VisualAd could match more ads to images and improve the match based on the actual image, increasing ad revenue for social networks. VisualAd, priced on an annual licensing fee that varies according to CPU and storage size, modules purchased and use frequency, works as either an API or as a self-hosted solution and runs on Windows and Linux.

VisualAd comes at a time when Facebook and MySpace sell ads on low CPM rates, from 8 cents to 12 cents per one thousand views; Eyealike believes VisualAd could help making the same exact page view worth $2 to $20.

I love Eyealike's approach, a visual breath of fresh air amid the keyword-centric world of Google and the demographic-focused bent of MySpace and Facebook. I wish Eyealike good luck against the current economic climate.

But let's be real about MySpace MyAds and Eyealike's VisualAd. Citing research from UBS' Ben Schachter, GigaOm's Om Malik notes today that the online ad market is in trouble and that "dozens of advertising networks that have cropped up over the past two years will be impacted."

Malik claims Google, the very company MySpace and Eyealike are trying to differentiate from, may be safe thanks to its performance-based ad system. What online ad areas do you see impacted?