Redmond, Wash. – May 20, 2008 – Today, online advertising is a US$40 billion dollar industry and is projected to double in the next two to three years to US$80 billion. With an increasing proportion of consumer purchases now occurring online, the internet has fast become an essential forum for brand building, awareness and winning building consumer loyalty.
It’s a matter of reaching people where they are. MSN, Windows Live, Xbox, Office Online, Live Search and Microsoft’s other online properties command a global monthly audience of 550 million consumers. Moreover, consumers are choosing to log onto the Internet not only from PCs or laptops but via gaming consoles like Xbox or mobile devices. One in three British and American teenagers say they consider their video game console an indispensable lifestyle accessory, according to a recent study by MTV, Nickelodeon and Microsoft.
Microsoft’s Atlas technology in action via a digital screen aboard the MediaCart computerized “smart shopping cart” unveiled earlier this year. Relevant ads are served up to consumers based on loyalty card data scanned into the shopping cart. MediaCart will be rolled out across Wakefern Food Corporation’s ShopRite stores later this year. Redmond, Wash., May 20, 2008
But the prospect of trying to gain a foothold in a fast-moving, constantly-shifting media landscape spanning multiple hardware form factors and digital access points can be daunting. Even for seasoned veterans of digital advertising, the logistics of mounting an effective campaign can seem overwhelming.
The Internet has enabled consumers to customize their media experiences like never before, fragmenting advertisers’ audience across disparate web sites catering to individual interests. At the same time, consumers have grown more sophisticated, discriminating and discerning, learning to tune out all but the most relevant, ingenious or attention-grabbing ads.
Meanwhile the tools at companies’ disposal can present a bewildering array of options that often offer only a partial – and sometimes contradictory – glimpse of the big picture.
Introducing Microsoft Advertising
To help bring some order to the chaos, Microsoft today unveiled Microsoft Advertising, unifying all the company’s tools and solutions for advertisers, ad agencies and publishers under a single easy-to-understand business-to-business brand.
Microsoft Advertising, announced at advance08, the company’s online advertising leadership forum, will be marketed, sold and serviced by Microsoft’s Advertiser and Publisher Solutions (APS) Group. The brand will encompass Microsoft’s digital advertising platform businesses, Atlas, AdECN, adCenter, DRIVEpm, Massive and ScreenTonic, as well as the company’s media offerings for advertisers.
“Customers are looking for ways to make digital advertising simpler to understand and execute,” explains Brian McAndrews, senior vice president of Microsoft’s APS Group. “We’re uniquely positioned to marshal both media and technology to cut through much of the complexity and confusion.”
He added: “With Microsoft Advertising we’re bringing our digital advertising assets into sharp focus as a unified set of tools and services with which advertisers can manage smart online campaigns and publishers can package and otherwise add value to their inventory.”
Microsoft also announced today the extension of display advertising capabilities to two key Windows Live for mobile services – Windows Live Messenger and Windows Live Hotmail – alongside the launch of Windows Live for mobile services in new international markets. To further increase advertisers’ ability to connect with consumers on the go, the company also unveiled plans to enable advertisers to manage keyword campaigns through Microsoft adCenter in Windows Live Search Mobile.
Today’s announcement builds on Microsoft’s established track record of innovation in the digital advertising arena. In February, the company announced that it had pioneered a new reporting standard for assessing the performance of digital ad campaigns that goes beyond the “last ad clicked” – previously the only reference point advertisers have had in trying to determine the drivers behind online purchases.
Engagement Mapping, currently being tested by leading advertising clients and agencies throughout the US, allows firms to track back through all previous interactions consumers have had with advertising and marketing messages across multiple sites and channels culminating in the sale to gain more sophisticated insights into what influences buying decisions.
In addition, Microsoft recently demonstrated a new smart shopping cart, developed in concert with computerized shopping cart manufacturer MediaCart Holdings and Wakefern Food Corporation, a leading regional US grocery chain. The cart is equipped with an onboard digital screen utilizing Microsoft’s Atlas technology to serve video ads to customers as they shop. The system, which will be rolled out across Wakefern’s ShopRite stores later this year, allows shoppers to scan their loyalty cards into MediaCart shopping trolleys and receive ads and promotional offers based on their previous purchases and saved online shopping lists. Advertisers can deploy reporting and analytics capabilities to gauge the performance of the ads.
Looking ahead, new products and services under development in adLabs, the company’s digital advertising technology incubator, include “LifeStages,” a new technology that segments users of Windows Live Spaces into different life stages – for instance, recent college graduates or newlyweds – based on their public blog entries or photo captions. This enables advertisers to better target users by serving up highly-relevant non-intrusive ad content. Also in the works are contextual ads for video, deploying speech recognition technology to present relevant ads to consumers while they view video clips online without interrupting their viewing experience.
A Year of Growth and Momentum
Such initiatives cap 12 months of growth and momentum for Microsoft’s thriving advertising business. Since the company’s May 2007 announcement of its acquisition of Seattle-based digital marketing and services firm aQuantive, Atlas, a suite of tools and services for marketers, ad agencies and media companies to manage and track the impact of their digital marketing campaigns, has been adopted by approximately 100 additional publishers, including most recently Britain’s MoneyFacts, to bring its total publisher customer base to more than 250 companies. It now serves nearly 7.6 billion ad impressions daily – equating to roughly 88,300 ads a second – recently surpassing the five trillion mark for ads served.
Meanwhile DRIVEpm, an online ad network allowing publishers and advertizing firms to maximize their return on investment, will be rolled out to Canada, Mexico, Brazil, India, Japan and Scandinavia among other countries over the next year or so. This builds on a customer base spanning the US, much of Western Europe and Australia.
Meanwhile, Microsoft made three other acquisitions over the course of the year to fully round out its advertising portfolio and stay on the cutting edge of industry innovation.
In July 2007, it announced the purchase of Santa Barbara, California-based advertising exchange platform AdECN, a NASDAQ-style auction marketplace for trading online display advertising, offering true neutrality for the advertising networks and other traffic aggregators that buy and sell ad space on behalf of advertisers and publishers.
In February, Microsoft announced its intent to acquire Israeli firm YaData, augmenting its digital advertising lineup with advanced behavioral targeting tools that provide advertisers with richer insights into their target audience – without using personally-identifiable information – to enable them to run more focused, effective campaigns. The following month, Microsoft announced plans to buy online advertising yield management leader Rapt, folding Rapt’s integrated asset and inventory management, forecasting, yield and sales management tools into the Atlas Publisher Suite to complement Atlas’ campaign management and ad serving functionality with enhanced planning capabilities.
Additionally, the company has forged syndication partnerships with financial news provider CNBC, The Wall Street Journal Digital Network, and stock market research portal EDGAR Online, giving advertisers new reach into the highly-coveted business and financial services audience and providing the readership of these sites with highly relevant ad content. It also struck a similar pact with Viacom, owner of MTV, Comedy Central, BET, Paramount Pictures and other leading entertainment industry properties.
About Microsoft Advertising
Microsoft Advertising provides world-class advertising tools and solutions for digital advertisers and publishers to drive brand and consumer engagement. The portfolio includes all of our digital advertising businesses: our global media network that includes MSN, Windows Live, Office Live, XBOX, Live Search, Facebook and more, and our global technology platforms and tools that include Atlas, AdECN, adCenter, DRIVEpm, Massive and ScreenTonic, which together create engaging digital advertising experiences for their consumers. Microsoft Advertising helps make buying and selling media simple, smart and more cost-effective across media and devices in the Microsoft network of properties and beyond, which spans 42 markets globally and 21 languages. Visit http://advertising.microsoft.com for more information.