Microsoft Explains Mobile Ad Network Purchase

With ScreenTonic, It Hopes to Get to Wireless Carriers Directly

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NEW YORK ( -- Microsoft has pushed its mobile version of Windows and sold mobile advertising on its own sites for awhile. But the real traffic is on the carrier decks -- the mini-portals created by wireless carriers through which consumers often enter the mobile web. And that's exactly why Microsoft, after flirting with mobile networks such as Third Screen Media, went out and bought ScreenTonic, a European mobile advertising company.
Joe Doran, general manager of Microsoft Digital Advertising Solutions
Joe Doran, general manager of Microsoft Digital Advertising Solutions

With the acquisition, Microsoft not only gets a mobile ad management and placement platform, but a company which develops mobile ads. Joe Doran, general manager of Microsoft Digital Advertising Solutions, spoke with Ad Age Digital to assess the deal.

Ad Age: What does ScreenTonic bring to Microsoft that you didn't previously have?

Joe Doran: We've been doing ads within mobile for awhile for our own publishers, but for us to do a great job with explosion of mobile advertising and mobile usage, we needed more robust technology around solutions and ad sales. ... This is something we learned from our Massive acquisition. You need subject-matter experts that can deal with game publishers; [with mobile] you need subject-matter experts that can deal with carriers and Screen Tonic has that.

Ad Age: Right now the footprint appears to mostly in Europe. Are there plans to bring it to the U.S.?

Mr. Doran: It'll be a global play, it'll just take awhile for us to go and expand geographically. The mobile internet consumer usage, adoption of mobile advertising and the adoption of mobile media is happening here in Western Europe. So it was logical if we were going to drive a beachhead, it'd in Western Europe.

Ad Age: What's the role of the carriers in your mobile marketing ambitions?

Mr. Doran: The mobile operators are a critical partner to our solution. One of the reasons we looked at ScreenTonic is its solution is actually supporting a carrier and an operator's needs, and we are a partner company at Microsoft and we want to partner with the carrier there. ... There's definitely an economic relationship. I can't tell you what those [revenue] shares are. Most of the mobile operators today basically look like a web portal on the mobile phone. ... We want to sell advertising on their deck.

Ad Age: What kind of targeting data will Microsoft and ScreenTonic be able to offer marketers?

Mr. Doran: ScreenTonic does basic targeting based on handset by carrier and by the site [where the consumer is] actually at today. Based on information we can comb from the carrier and the operator, we could get enhanced data for advertiser, such as gender or geo-location. It's probably not as robust as we would want it to be, but it's as good as what everybody is doing in geo-based targeting on mobile advertising today.

Ad Age: What is the threshold major marketers need before considering mobile a viable media?

Mr. Doran: I'm not sure what that critical metric is, but I do know that we're there when we move out of just having experimentation dollars being spent in the medium and getting real working dollars being spent, whene users are actually spending [more than] $25,000, $50,000 [or] wanting to do million-dollar campaigns. ... I'm not sure when that will happen within the U.S. I think it will happen much faster, especially for mobile content providers, in Western Europe.

Ad Age: How will mobile be sold and measured?

Mr. Doran: For display advertising -- which is where ScreenTonic really fits -- that will primarily be placed and sold on CPM [cost per thousand viewer] basis. There will be performance-based media just as there is all over digital marketing today where there will be players who want CPC [cost per click] or CPA [cost per action] pricing to help them hit the return-on-investment objectives they have. We'll manage that and manage our inventory just like we do in the online space today. One of the things you are seeing is very high CPM prices today. I believe there is distinct value in those CPMs. I believe CPMs will stay in the $25 to $50 range for a while as this medium grows. High content, highly contextually targeted, high value placements will drive high value CPMs.

Ad Age: Consumers still seem to exhibit lots of skepticism about ads on their phones. What's your take on that?

Mr. Doran: The general skepticism is people don't want the experience to be over-commercialized. Working with industry bodies, we will drive standards so that we have great consumer experiences for advertising that are not intrusive or distracting from the user content. As more content players coming on board and people delivering high-quality content that people want, the right publishers will help us make the right decisions to get a consumer experience that is well balanced with the appropriate advertising experience consumers will love. We will find the right balance.
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