MSN Thrives During Tough Times for Online Advertising Industry

REDMOND, Wash., April 16, 2001 — MSN has reported that its sales are significantly outpacing the overall online advertising industry’s growth — Comprehensive digital marketing programs like the one announced with Unilever Home & Personal Care — NA’s Helene Curtis brand, have resulted in more than 100 percent year-over-year growth in MSN’s advertising revenue worldwide. Jed Savage, director of national sales at MSN, spoke PressPass recently to discuss the future of the online advertising industry, and how MSN continues to maintain strong relationships with leading advertisers.

PressPass: The online ad industry is facing some challenges right now. How will MSN weather them?

Savage: MSN is in a very different position than others in the industry — our strong business strategy is enabling us to continue to grow and expand our advertising base. In addition to providing unique technology and strong customer support, MSN offers value-added solutions like cross-network integration, and services such as Ad Effectiveness studies to provide targeted, measurable digital marketing programs. While our competitors are spending time trying to repair bridges they’ve burned, MSN continues to strengthen its relationships with advertisers and deepen its understanding of their business.

MSN’s advertisers continue to be very diverse, ranging from the largest and best brand advertisers to small and medium businesses. We concentrate on offering them superior service and investing time in getting to know their business intimately. We’ve gotten ahead of the curve to understand what is and isn’t working with their ad campaigns, as well as what their business will look like six to 12 months from now. In any service industry, your relationships with customers are key to weathering changes together. We realized early on that our clients needs may change, given the shift in the industry’s climate. Our senior executives are all involved in this ongoing process of staying ahead of our competitors in customer service.

AdRelevance cited MSN
as garnering the most online advertising revenue in December. Why is MSN succeeding where other companies are struggling?

Savage: We have continuously delivered products that complement our core expertise in technology to meet our customer needs. In vertical channels like MSN Money Central or across the network as a whole, MSN is a smart service that builds market share by retaining and expanding its user base. MSN is now the largest player globally, which makes it very attractive to advertisers. As a percentage, our advertising client base is naturally shifting to more traditional advertisers like Unilever, as they continue to shift more of their marketing efforts online.

Now the question becomes, “What are the largest brands going to do with this opportunity?” MSN has invested in developing a great sales organization, but we also saw early on that we needed to also become a service organization, so we instituted sales planners and account managers to create a balance. Great customer service minimizes client frustration, which encourages them to continue to build their programs with us. The bottom line is that deliver on what we’ve sold.

PressPass: Who do you consider your competitors?

Savage: The distance between first-tier and second-tier portals is so great that it’s now a two-horse race between AOL and MSN. In the near term, you’ll see MSN gaining a larger share of the pie. On the other hand, industry analysts predict that companies will continue shifting their existing advertising budgets toward expanded online marketing programs. At the same time, more traditional companies will start advertising online. Our goal is to help them strike the right media mix to meet their marketing and sales objectives.

PressPass: How do you compare to your competitors?

Savage: The Internet is a global business, and MSN’s 230 million unique users make it the No. 1 Internet destination worldwide. MSN offers consumers, partners and marketers more than world-class content. MSN also offers them technology-based solutions such as MSN enRiched ads and more than 900 integration points throughout our network. MSN is a phenomenal online business with the ability to partner with great brands like Disney, Nickelodeon and LEGO. Those companies have great branded content, and MSN’s technology will always differentiate itself. AOL Time Warner has decided to become a media company. In contrast, MSN at its core is a technology company. Beyond our technological expertise, MSN prioritizes market reach over revenue to enhance the consumers’ online experience.

PressPass: How does MSNs offerings benefit advertisers specifically?

Savage: A great example of how MSN Explorer enables users to get more out of their online experience is how it pulls together MSN’s most popular services — including MSN eShop, MSN Search and MSN Hotmail — under one umbrella. From an advertiser’s point of view, MSN Explorer enables them to take advantage of our market share in the browser space. It gives users easier access to the tools and information on MSN that they want most — thus increasing the time they spend on MSN — which makes MSN even more valuable to advertisers. We saw the need for this two years ago, and our competitors are still trying to catch up.

PressPass: What are the main advantages of advertising on MSN?

Savage: MSN provides dedicated account managers who walk advertisers through the pre- and post- buying process. These managers learn about the advertisers business so they can develop customized marketing programs ranging from banners and buttons to promotions and sponsorships. Also, we can provide our advertising clients with other technology solutions. Many of the retailers on MSN eShop this year adopted Microsoft Passport’s Express Purchase technology to simplify consumers online purchases and minimize abandoned shopping carts. MSN’s incredible reach enables advertisers to touch 90 million Hotmail users. Advertisers also can focus vertically to reach a targeted audience on channels like MSN Entertainment, MSNBC, Carpoint, Expedia and HomeAdvisor. Being a portal and not a proprietary network allows us to maintain a level playing field, without trying to be everything to everyone.

PressPass: What does the future hold for the online advertising industry?

Savage: Its still very young, maybe six or seven years old. The Internet has developed into a huge advertising source, and it is still continuing to evolve. Online advertising will become an integral part of the overall media buy for most companies, because theyre beginning to understand that their creative execution needs to be consistent across all media. The companies that learned this industry early are better positioned, and the ones emerging now will learn from their example. Companies with the ability to answer that question, like MSN, will be successful. We’re a consulting and service organization. We can develop the technology, but the information with the technology that we bring to the table will continue to be a distinct advantage over our competitors.

PressPass: How does online advertising compare to traditional advertising?

Savage: The Internet has not changed the basic rules of marketing. The key to any successful campaign is balancing out the media mix, based on your objectives. A hit TV show can pull in 30 million people for half an hour, but MSN can do that every day and deliver much more information on what’s working and what’s not.

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