THE STRATEGY DRIVING MSN'S AOL BUY-IN QUEST
Combination Would Top Google's Traffic Numbers and Potentially Deprive it of 11% of Revenue
MICROSOFT IN DISCUSSIONS TO BUY STAKE IN AOL
'New York Post' Report Cites Two Sources
BROADCAST NETWORKS BUY INTO SEARCH KEY WORDS
No Longer Able to Ignore Search Engine Marketing Power
MSN BETA TESTS NEW SEARCH-AD SYSTEM OVERSEAS
Includes Demographic Functions Google and Yahoo Lack
Yusuf Mehdi, senior vice president of MSN information services and merchant platform division, announced the new offering in the opening keynote address at the Interactive Advertising Bureau’s Mixx Conference yesterday morning in New York.
“Neither Yahoo nor Google have the capability to target search campaigns based on audience demographics,” Mr. Mehdi said in an interview following his keynote.
The service, called adCenter, is being tested in France and Singapore and will roll out to the U.S. next month.
As Google and Yahoo rake in more of the paid-search dollars (this year, according to eMarketer, the two are expected to fetch more than 45% of that online revenue), Microsoft is scrambling to catch up. A first step was ramping up its MSN search technology and spending $1 billion during the last year to do so. AdCenter is the first significant product offering within that redesigned engine.
AdCenter allows advertisers to draw from MSN’s 400 million users worldwide who have registered for MSN’s Passport, Hotmail or Messenger services. Based on the demographic information those users provided, the advertiser can then target commercial messages based on geographic location, gender, age range, time of day and day of week. MSN can then also overlay additional data rented from database marketing companies, such as wealth index and psychographic information, to target more specifically.
When the campaign starts running, MSN will provide ongoing results reports to allow the advertiser to switch keywords or alter the campaign. Advertisers will bid on keywords in an auction system the way they do on Google or on Yahoo Search, but will pay more for more "granular" targeting, Mr. Mehdi said.
He said MSN realizes most advertisers will buy on multiple search engines, but that adCenter is geared to provide detailed information about potential customers from the outset. “We feel you should start your campaign first on MSN.”
Google had powered MSN’s search capability in France. MSN ended that relationship Feb. 1 and began powering its own search feature with its upgraded MSN engine.
Mr. Mehdi said that after adCenter launches in the U.S., MSN will later overlay more data to the system for even more sophisticated targeting. The company plans to track users (who opt in) across the Web and gather information for behavioral targeting. This ad technique can, for instance, pinpoint a user’s purchase interest in buying a car, and then serves an ad from an automaker wherever that user may travel on the Web. Behavioral targeting assumes that whatever else the user is looking at on the Internet, he or she is still interested in buying a car.