Four-year agreement is kaput in possible blow to Microsoft's ad representation ambitions.
Microsoft will no longer represent Facebook's display ad inventory, the companies said today. The "mutual" decision ends a three-year exclusive ad relationship that extends back to 2006.
A post on Microsoft's Bing blog characterized the move as a natural part of Facebook's evolution. Facebook will take responsibility for selling display ads on its own sites in the U.S., starting on February 28, according to Microsoft.
"Given the kinds of advertisements that make sense within a product as unique as Facebook, it just made more sense for them to take the lead on this part of their advertising strategy," said the post, which was written by Jon Tinter, Bing's general manager.
In a statement, Facebook said it decided to stop serving all Microsoft ads in part because Facebook's own ads can be more accurately targeted and better integrated with its site. "Ad formats that feature social actions perform better and provide a better user experience since they are more consistent with the look and feel of Facebook," it said.
Microsoft will continue to sell search ad placements on Facebook.
The end of their display ad deal was buried in a post about an expanded search relationship between Microsoft and Facebook. Under that new agreement, Facebook will display richer search results from Bing and will provide Bing results to its users around the globe. The expansion includes the integration of Bing's visual search and other features.
However it's not clear what role search plays in consumer behavior on social networking sites. According to ComScore, MySpace was home to 439 million U.S. search queries in December 2009, fewer than Bing, Craigslist, and AOL. Despite its larger audience, Facebook's search volume was even lower, at 354 million queries. What's more, Myspace's year-over-year search query volume declined 5 percent in December, and Facebook's volume dropped 1 percent.
Additionally, News Corp.'s disappointing attempt to integrate Google search results and ads with MySpace has led many to conclude social networking sites do not generate a great deal of search activity.
Microsoft has been the exclusive third party representative of Facebook ad inventory in the U.S. since 2006. One year later, they expanded the deal to include global ad inventory.
The cancellation may be seen as a blow to Microsoft's business selling ads on branded publisher sites. Over the years, it has had such deals with Facebook, Digg, Viacom, CNBC, and Dow Jones, among others, but several of them have not lasted. Digg ended its relationship with Microsoft last April, and brought all ad sales in house. Edgar Online also no longer relies on Microsoft for ad sales, according to a Microsoft spokesperson.
Correction: An earlier version stated Microsoft no longer works with Viacom on display ad sales. That's not the case.
Join the Industry's Leading eCommerce & Direct Marketing Experts in Chicago
ClickZ Live Chicago (Nov 3-6) will deliver over 50 sessions across 4 days and 10 individual tracks, including Data-Driven Marketing, Social, Mobile, Display, Search and Email. Check out the full agenda and register by Friday, August 29 to take advantage of Super Saver Rates!
Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects.
IBM Social Analytics: The Science Behind Social Media Marketing
80% of internet users say they prefer to connect with brands via Facebook. 65% of social media users say they use it to learn more about brands, products and services. Learn about how to find more about customers' attitudes, preferences and buying habits from what they say on social media channels.
The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.
September 17, 2014
September 23, 2014
September 30, 2014
1:00pm ET/10:00am PT