Microsoft Hops on the Behavioral-Targeting Bandwagon

  |  November 8, 2006   |  Comments

Microsoft's group product planner gives the lowdown on the new Microsoft Digital Advertising Solutions.

Microsoft Digital Advertising Solutions recently hopped on the bandwagon of publishers offering behavioral targeting. I caught up with Meera Bhatia, group product planner at Microsoft, who gave me the lowdown on the offering.

Anna Papadopoulos: When did MSN begin offering behavioral targeting?

Meera Bhatia: We have been running internal and pilot programs for the last year, but we officially launched our offering on September 5.

AP: What provoked you to include this in your suite of products?

MB: Our advertisers continue to express their desire for richer targeting, empowering them to reach more users more precisely throughout the purchase funnel.

For our users, we think behavioral targeting is a great way to improve their advertising experience, because it makes the Windows Live and MSN advertising experience more relevant.

AP: What is MSN's philosophy and mission for behavioral targeting?

MB: Building user trust is an overriding principle for all of our targeting products, not just behavioral targeting. Having the trust of our customers allows us to provide a higher-quality audience to our clients.

AP: Can you describe your methodology?

MB: We incorporated extensive client and industry input to construct each specific behavioral segment. In accordance with our privacy statement, we blend the information that customers offer to us, such as their age or gender, with search and browse histories from MSN and Windows Live. We customize the timeframe we analyze depending on the typical purchase cycle (longer for cars, shorter for movie watchers). We then use advanced technologies from our adCenter Labs to develop an innovative matchmaking service to deliver advertiser's messages to

As a simple example, a customer who's been researching new cars on MSN Autos and searching for Kelly Blue Book prices on Windows Live Search is likely in the market for a new car. When this customer visits MSN, we would deliver ads relevant to someone shopping for a new car.

Furthermore, defining our behavioral targeting segments is not just a one-time event and then we're done. We believe it is integral to have continuous client and industry feedback to maintain that targeting efficacy of our segments.

AP: What do you see as your main strengths and weaknesses compared to your competition?

MB: We have one of the largest global audiences of all internet media companies. We give that customer base the combined MSN and Windows Live network of entertaining, informative, and interactive content and services. The result is a sticky customer base that provides huge reach to our advertisers.

AP: Have any advertisers used the product, and what were the results?

MB: While only a month into the launch, we have seen widespread use across industries and fantastic results. During our pilot, advertisers found that click conversion increased as much as 76 percent, and favorable brand association nearly doubled for behaviorally targeted ads. Since launch, every one of our behavioral targeting segments has been ordered by an advertiser, and we continue to see increased demand.

AP: Which industries do you think will have the most success with behavioral targeting?

MB: We have already seen success in the automotive, financial services, travel, retail, and telecom industries. There is no reason why any industry shouldn't find success with our behavioral targeting product.

AP: What about direct-response versus branding campaigns? Is behavioral targeting better suited for one or both of these objectives?

MB: We think it's well-suited for both. Our offering is based on what advertisers care about the most -- delivering results. Some advertisers seek to increase brand recognition within a target segment; others seek to drive an immediate response; many seek both, delivering highly tailored messages to customers in distinct phases of the purchase funnel.

AP: Are there any plans for international expansion?

MB: Absolutely. We are working with our international colleagues to ensure that what we launch is suited for that country's audience, meaning we embrace the unique characteristics of each market.

AP: What do you think are the major industry challenges with behavioral targeting, and how is MSN addressing them?

MB: All industry players in the behavioral targeting space have to be focused on privacy. We have an independent body of privacy advocates that advise us, and we're spending time with regulators to make sure we're deploying the right way.

The other big challenge is just meeting industry expectations for behavioral targeting. There is a lot of positive, well-deserved buzz around behavioral targeting. However, we realize behavioral targeting is not the be-all and end-all solution. At Microsoft, our sales team understands the specific role behavioral targeting can play and communicates the importance strategically, not blindly.

AP: Where do you think behavioral targeting is headed, and what is MSN's role in this?

MB: Advertisers will continuously seek out richer targeting capabilities so they can connect with their audience in more efficient and engaging ways. At the same time, our customers will continue to demand more relevant ads. To meet these demands, we are always experimenting with our targeting models to best connect advertisers and customers.

In the future, behavioral targeting will not solely reside on the PC but also across multiple devices and platforms. Targeting models will have to adapt to these new developments. Microsoft will be an innovator and leader in these future opportunities. Exciting times are ahead!

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Anna Papadopoulos

Based in New York, Anna Papadopoulos has held several digital media positions and has worked across many sectors including automotive, financial, pharmaceutical, and CPG.

An advocate for creative media thinking and an early digital pioneer, Anna has been a part of several industry firsts, including the first fully integrated campaign and podcast for Volvo and has been a ClickZ contributor since 2005. She began her career as a media negotiator for TBS Media Management, where she bought for media clients such as CVS and RadioShack. Anna earned her bachelor's degree in journalism from St. John's University in New York.

Follow her on Twitter @annapapadopoulo and on LinkedIn.

Anna's ideas and columns represent only her own opinion and not her company's.

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