Watch for falling prices

Media buyers wonder whether MySpace's recent move to slash ad prices betrays crumbling foundations for the social network, reports Brandweek.

Fox Interactive is currently charging advertisers a CPM of between $1.50 and $2. Eight months ago, inventory went for up to $3.25. Facebook, by way of comparison, charges CPMs of $3 to $4.

The difference may be available inventory. While just one ad unit is available on each Facebook page, MySpace pages can feature anywhere between two to six ads per page. Advertisers can also opt to "wrap" the homepage, an option Facebook advertisers do not have.

The number of unique visitors to MySpace is also stagnating while Facebook continues to grow.

But falling prices on a prominent site is hardly reason to cry. One advertiser says she loves the lower prices because response rates remain the same, leading to vastly higher ROI on her buys.

MySpace hopes to lift the falling tide when it rolls out its "Hypertargeting" behavioral and deep-data ad delivery system.