Microsoft Retires AdECN, Migrates to AppNexus RTB Engine

Microsoft has officially switched from AdECN to AppNexus for its real-time bidding needs. The change finally retires the AdECN platform, three years after Microsoft acquired it.

The switch to AppNexus, a New York startup Microsoft infused with an investment last fall, is still underway. The availability of Microsoft-owned media is limited to Windows Live ads in the U.S.; these mainly appear on its Hotmail and Messenger services. In the next few weeks the inventory pool will widen to include all remnant MSN Network inventory in the U.S., and after that partners such as Viacom and MSNBC may be added.

The bigger story will come later this spring as Microsoft rolls out the exchange in non-U.S. markets, beginning with Canada, the U.K., and the Netherlands. Dennis Buchheim, GM of scale display for Microsoft, said those international launches will mark an important acceleration of the company's exchange strategy.

Despite serving an estimated 8 billion impressions per month as of last October, Microsoft has come late to the exchange party - especially when it comes to real-time bidding. To make up for lost time, it is adhering to a premium content strategy, working only with its own properties, select partners, and other vetted sources of inventory courtesy of AppNexus.

This move may help Microsoft distinguish itself from chief exchange rivals DoubleClick Ad Exchange and Yahoo's Right Media, both of which remain relatively open - and therefore somewhat more frightening to major brands.

"Right now we think we're leading the charge in bringing premium inventory into a RTB environment," Buchheim said.

While Microsoft will certainly constrict its volume by focusing on its own properties along with close partners, the strategy may pay off if it leads to an influx of demand from major advertisers and their agencies - still the source of most growth in exchange spending, according to sources.

Microsoft says its exchange sees trading of between 8 and 10 billion impressions a month. In contrast, Yahoo said in October that it manages 9 billion transactions per day through Right Media - roughly 30 times more than Microsoft.

AppNexus, based in New York, operates a platform that has been used by roughly 150 ad networks in 12 countries. Microsoft was an early AppNexus customer, and the Microsoft Media Network is one of the top five networks AppNexus currently works with, according to CEO Brian O'Kelley.