Windows Live Ad Tests Underway

Users of Microsoft Office Live, Windows Live Mail and MSN Spaces in a limited number of markets will begin seeing targeted display ads in those services.

Microsoft is testing multiple display formats with executions from 20 advertisers, including Coca-Cola Brazil, JCPenney and Monster Worldwide. Windows Live display ads are being tested in MSN Spaces in Australia and Italy. Windows Live Mail display ads are being tested in Australia, Brazil, Canada, China, France, Germany, Italy, Spain, the UK and the United States. Office Live display ads are being tested in the U.S.

“We’re confident that advertisers are going to see good results. We’ve been doing a lot of work on the back end to get ready for this and make sure it works,” Karen Redetzki, product manager for MSN, told ClickZ News. “The tests are about balancing ROI for advertisers with a good consumer experience.”

Ads for the test, which sold out almost immediately, were handled by the MSN ad sales team, which took over ad sales for all of Microsoft in a September reorganization that brought MSN under the same umbrella as Windows. Once adCenter goes live, which is expected to happen by the end of June, the Windows Live ads and other Microsoft and MSN ads will be added to the platform.

Creative units being tested differ for each service, but all are display ads. Spaces will carry “super banners” and skyscrapers. Live Mail will have super banners, skyscrapers, and a few other units in the login area, inbox, and on screens where users read or send mail. Office Live inventory will include display ads of various sizes and placements. Eventually, these may be joined by text ads, rich media and video formats, Redetzki said.

The ads in the test phase are being targeted contextually in most cases. Once they’re brought into adCenter, they will benefit from that platform’s demographic, psychographic and geo-targeting.

Advertisers who did not make it into the first phase of the test may still have a chance to join.

“The response we’ve gotten so far has been overwhelming,” Redetzki said. “Being able to create these new opportunities for advertisers and consumers alike is very exciting for us. It feels like we’re building a mini-company here, and this is just the first step.”

Microsoft is also undertaking research with 100 advertisers in nine markets to identify advertisers’ needs and establish best practices for trafficking campaigns in Windows Live. This includes focus groups with advertisers and consumers to determine the most useful and profitable services and monetization methods. That testing is currently underway in the U.S., U.K., Japan, Taiwan, China, Brazil, Spain, France and the Netherlands.

Office Live, Live Mail and Spaces are all part of Microsoft’s Windows Live plans, which were announced in November. At that time, the company shared details of its new emphasis on advertising, beginning with the debut of adCenter, which launched in France and Singapore in September, and has been in a U.S. pilot since October.

“Advertising is no longer an MSN effort. It’s a Microsoft effort,” MSN SVP Yusuf Mehdi said when adCenter launched. “[We will] bring advertising into all of our experiences, whether it’s a Windows experience or an Office experience.”

Windows Live will offer free or low-cost services to users and be supported by advertising. Consumer-focused elements include a customizable home page, Windows Live Search, a toolbar, IM client, the MSN Spaces blogging/community tools and Live Mail email service. Office Live offers tools for small businesses like domain name registration, Web site hosting, company email and hosted collaboration tools.

Microsoft has steadily rolled out new Windows Live features since fall. Live Local launched in beta in December, classifieds site Windows Live Expo in February, and Windows Live Search last week.

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