Last fall, I spoke to analysts about the impact of user generated content (UGC) and the effect it will have on brands and marketers as organizations look to non-traditional media to reach their audiences. The theme: companies are actively striving for new ways to extend their brand.

Back in July of 2005, News Corporation paid USD$580MM (in cash) for MySpace. Given the headline above as reported by Ad Age, this looks to be a bargain and the industry is taking notice. In addition to the ad revenue, News Corp has specific insight and trends into their vast online audiences; information that isn’t available to anyone outside of New Corp. The real value is the aggregated, authentic information that is collected by UGC sites. In essence, content is currency. Or more specifically, content around focused audiences is currency. Afterall, isn’t YouTube just “America’s Funniest Home Videos” on the web?

Being an advocate for driving online communities to promote brands (specifically through wikis) for years, I can attest that there are potential risks in regards to brand dilution. However, done correctly with the right strategy and focus, the rewards can be extremely high as MySpace is proving out on a daily basis.It is also interesting to note some that measurable CPM for UGC sites is on the rise:

“Speaking at the 17th annual Citigroup Entertainment, Media and Telecommunications Conference in Las Vegas, Chernin said online ad rates have started to become significant at CPMs of $25-$30.”

It’s all about focused content to reach specific audiences.

As a side note, it’s good to be here at ideapark!