MSN, BankOne in $30 Million Ad Deal

Microsoft Corp. is gaining traction in its Advantage Marketing effort, signing financial services holding company Bank One to its roster of big-name advertisers.

Through the three-year, $30 million agreement, MSN and Microsoft will run a series of initiatives designed to promote Bank One to consumers and small-to-medium-sized business customers.

In keeping with its Advantage Marketing program — which aims to integrate media, technology and services into packaged client offerings — MSN will contribute the media, promoting Bank One products across its online network, including its CarPoint, MSN Money and Home Advisor areas.

Many of the executions are likely to appear as rich media ads — drop-downs, pop-ups and animated skyscrapers — which Redmond, Wash.-based MSN calls its Next Generation Ad Products.

On the technology front, the deal calls for users of Microsoft’s Windows XP operating system to gain access to .NET Alerts from Bank One — which would alert opted-in users to a drop in mortgage rates, for instance.

Furthermore, Microsoft subsidiary Great Plains, which develops accounting software for small- and medium-sized businesses, will integrate Bank One services into its suite of products.

Microsoft’s bCentral Web site, which is tailored to owners of small businesses, also will feature co-branded Web hosting services, online scheduling and joint marketing services for existing Bank One customers. Those services also will be made available through the Bank One Web site.

The company called it one of the “largest” commitments to its Advantage Marketing program in terms of the breadth of services that the software and media giant would be bringing to bear. Previous Advantage Marketing clients, like Toyota and Volvo, bought into packages that consisted mostly of advertising inventory.

Spokespeople declined to specify details of the companies’ financial arrangement, but in addition to the $30 million, Bank One will repay Microsoft by marketing MSN Internet Access to its consumer and small business customers.

Microsoft representatives did say, however, that such a deal represents capabilities that only it can deliver.

“In addition to the 270 million users of MSN … we’ve got the .NET Alerts. That’s a technology that our competitors don’t have, so we think it’s a significant part of the deal,” said Christine Andrews, a product manager at MSN marketing. “We believe the technology really sets us apart here.”

While Microsoft’s Advantage Marketing capabilities are only now ramping up to bring in non-media assets, Microsoft has been heavily touting the program since its debut in early August. For one thing, the company said it had earmarked $100 million simply to market the program to advertisers.

It’s also sent its big guns into the field to play pitchmen. Earlier this month, Microsoft trotted out chairman Bill Gates to sell the offering to European advertisers in a whirlwind promotional tour.

How successful Microsoft will be in the effort depends greatly on what its competition does to lure ever-dwindling advertising dollars. AOL Time Warner, for instance, has become remarkably adept at stringing together media deals that involve its vast empire of television, print and online properties.

And with Bob Pittman — credited largely as the architect behind the America Online-Time Warner merger — assuming the sole position of chief operating officer, many industry-watchers believe the pace of such agreements could only increase.

Rival Web portal Yahoo, too, has a concerted program of its own, Fusion Marketing, designed to lure big-name advertisers. The company also has made a recent practice of issuing challenges to Microsoft’s claims of being the market leader in terms of sheer traffic numbers.

Still, Microsoft clearly is unwilling to mince words when it comes to the capabilities of its rivals.

“No other company can really touch” Advantage Marketing, Andrews said. “You have reach with the 270 million users of the site. AOL and Yahoo can reach consumers in interesting ways as well, but on the back end, you’ve got the .NET alerts that they don’t have … Companies like Sun and IBM might be able to do that, but they don’t have the media side. And in the middle, you have bCentral and Great Plains. Those end-to-end components … are something that the other big names cannot do.”

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