The new paid search ad platform will be piloted in limited markets later this year.
Following several days of media hype predicting MSN's imminent launch its own pay-per-click ad network, Microsoft today will reveal more modest plans. The company will demonstrate a prototype of a new paid search advertising platform at an event for ad clients in Redmond.
At the sixth annual MSN Strategic Account Summit, Microsoft plans to show off to 500 of its top customers the new MSN adCenter, a platform that will eventually be used for ads throughout its network. The first component of adCenter is the paid search piece, which will be piloted within the next six months in Singapore and France to gather customer feedback. Eventually it will be launched worldwide.
"We're rolling out the pilots to demonstrate and learn what value software can add to the search platform," said Eric Hadley, senior director of advertising and marketing for MSN. "Right now, everybody thinks search is just about clicks, but it's about more than that. It's about connection with the customer."
The platform promises in-depth analytics and audience intelligence, including geographic location, gender, age group, lifestyle segment and time of day. Advertisers will be able to access this information before placing their ad, so they will know what to expect before launching their campaign.
"This will really help drive ROI and the effective results of a search campaign beyond just knowing if somebody clicked on it, but to know if someone is likely to click on it. We think that's a huge step forward in this category," Hadley said.
While the full-scale deployment of the platform is not likely to happen before the end of the year, MSN is getting some early praise for providing advertisers with more control over their campaigns.
"Microsoft has laid out a roadmap for a product that looks to be a leap forward," said Fredrick Marckini, CEO of iProspect. "By raising the bar, we're likely to see Google and Yahoo raising the bar to keep up."
Providing advertisers with more variables for targeting will potentially make campaigns more efficient, Marckini said. For MSN, an unintended side effect of increasing efficiency may be to reduce revenue -- with fewer wasted clicks, advertisers pay less for the same number of qualified clicks.
"Having inefficiency in search is a moneymaker," Marckini explained. "But improving efficiency by doing what's technologically possible, despite it being slightly less profitable in the very short term, is real long-term thinking because great results will ultimately attract more advertiser dollars."
"Advertisers are looking for control, and one thing is clear, Microsoft is looking to provide advertisers with more control," added Kevin Lee, executive chairman of Did-it.com.
MSN's agreement with Yahoo to provide ads alongside its search results is set to expire in June 2006. MSN renewed the deal in November, extending the three-year-old agreement, which previously ran through June 2005.
A key element of the new deal allows Microsoft to begin selling and displaying its own ads on search results pages, a move that allows it to begin ramping up its ad sales program while still maintaining service levels and garnering revenue from Yahoo-supplied ads on its site. Microsoft already offers a fixed-price featured ad unit that appears above the search results.
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