MSN Looks To Wireless Advertising

In an effort to monetize the distribution deals it’s struck with Verizon Wireless, Sprint PCS and Nextel Communications, Microsoft’s MSN has struck a two-pronged alliance with wireless advertising start-up Avesair.

“By partnering with Avesair, MSN will be the first major Web portal to offer a broad array of wireless advertising opportunities,” said Joanne Bradford, vice president of MSN.

The agreement calls for MSN to license North Carolina-based Avesair’s technology, which delivers and reports the results of both SMS and WAP campaigns. That technology will be used to deploy advertising to the MSN mobile portal, which is available via a WAP site and through the portals of MSN’s carrier partners.

“This agreement with Avesair fits into our overall advertising strategy of delivering the best advertising technology to our advertisers,” said Lisa Gurry, lead product manager for MSN. “We see this partnership as an opportunity to add another tool in the toolbox.”

Additionally, MSN’s sales force will sell ads on Avesair’s wireless content provider network, which it acquired through the February purchase of WindWire. Publishers in the network include Boston.com, Edmunds to Go, Salon, and the New York Post. MSN declined to indicate the size of the sales force, but it was described as “fairly large.”

The deal may signal the increased importance MSN is placing on mobile marketing, at a time when carriers are looking toward wireless Web and SMS services to bring in incremental revenue. In recent months, carriers such as Verizon Wireless, AT&T and Sprint PCS have made major investments both in the infrastructure and the marketing of such services, including making it possible to send SMS messages between carriers.

The Avesair agreement comes on the heels of a high-profile alliance struck between MSN and Verizon Wireless that makes MSN Mobile the default portal for all of Verizon Wireless’ mobile Web customers. That gives MSN potential access to Verizon’s 30 million customers. Currently, MSN says it has 5 million subscribers to its mobile portal.

The Avesair relationship kicked off at the beginning of this month, with Volvo as the initial advertiser. Neither MSN nor Avesair provided details about the campaign, but the wireless company said it expected there would be many more campaigns running in the coming months. MSN has the advantage of leveraging its existing relationships with clients — which include Unilever, Toyota, Ford, and Monster.com — in its wireless sales, but both companies denied that wireless would simply be tossed into ad deals as a value-add.

“If it’s a mobile component of a larger buy, it’s usually a relatively significant piece,” said Dov Pinker, director of business development at Avesair. “It’s not being thrown in for free. The CPMs are fair in my opinion, and favorable from the business perspective. We’re not talking about low dollar and cent CPMs.”

Still, even though it’s unlikely that mobile marketing will represent a significant piece of MSN’s revenue stream for some time, Gurry said it was an important initiative for the company.

“It is important today and it’ll become increasingly important over time,” said Gurry.

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