Portal Adds Product Demonstration, Beefs Up Cross-Promotions

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NEW YORK ( -- Microsoft corp.'s no. 1-ranked MSN Internet portal is king of the hill, with a whopping 230 million unique users globally last month, according to Jupiter
Media Metrix. Its MSN Messenger Service alone logged 29.5 million unique users last month.

But looks can be deceiving. The butterfly network also has the 800-pound gorilla breathing down its neck-AOL Time Warner. With its 28 million paid subscribers and a vast portfolio of online and offline properties, the industry giant has been trying to lock up cross-platform media deals with major advertisers. (The MSN Internet access offering claims 4.5 million subscribers.) Bullish Microsoft executives say they're ready to take on their primary competitor and say they realize advertisers want value.

"We're just getting warmed up," said Jed Savage, director of national sales for MSN.

All pumped up
Pumped from last week's annual sales meeting and a recent MSN eShop retailer summit, Mr. Savage says his team

MSN Highspeed Showcase offers 3-D-like product demos.
has the strategies and tools in place to offer advertisers customized programs that will help them boost their bottom lines, even in a tough economic climate. Mr. Savage maintains MSN has been successful in offering advertisers broad reach but also targeted coverage via popular destinations on its network, such as HomeAdvisor, MSNBC, Carpoint, Hotmail and other sites ranked No. 1 and No. 2 in terms of traffic.

MSN's strategy of customizing ad programs to marketers' specific needs is what company officials hope will give it an edge. Marketers such as, a photographic activity site, and big brands like and Nordstrom are scrutinizing as never before their costs per acquisition.

"Publishers need to understand that we're not going to advertise unless it makes sense for the bottom line," said Marlo Silver,'s director of interactive marketing. Ms. Silver says marketers are saying to MSN and others, "I need the bottom line to be 'X.'" She and other marketers say AOL Time Warner may offer economies of scale, but it has one-size-fits-all packages. "I think that in the past they tried to sell packages that are not necessarily taking into account what our needs are," she said.

Delivering superior experiences
MSN's strategy involves delivering superior experiences via technology, a strategy Microsoft is deploying across the entire company and that MSN executives maintain will help the company gain share against AOL. Among the new programs are MSN Highspeed Showcase, which lets marketers showcase their products using 3-D-like interactive demos and video, and MSN Mobile, a new wireless ad product advertisers can use to target shoppers.

Microsoft also has made software code for rich media solutions available to marketers and their agencies and is arming the MSN ad sales team with handheld devices to speed their transactions. In addition, MSN has embarked on ad effectiveness research initiatives and an agency program to evangelize the connection between technology and marketing. MSN hopes to further differentiate itself from the competition with co-branded portals as well as vertical, niche-specific portals.

On co-branded portals, MSN recently partnered with MGM on a two-week promotion for the movie Hannibal that drove "phenomenal" traffic, said Megan Crawford, vice president-marketing for MGM. Next up, MSN joins with Miramax to aggregate unique content and promotion for the forthcoming release of Bridget Jones's Diary.

While Microsoft doesn't break out MSN ad revenues, Mr. Savage said the portal's growth is up 100% from a year ago. Microsoft's new fiscal year begins July 1.

"We're having a great year in a down market. We would have had a killer year had we not been in a down market," he said. "MSN is poised to grab market share from AOL Time Warner because the bets we placed six to 12 months ago are paying off," Mr. Savage explained.

Cross-media response
As for the much-ballyhooed AOL Time Warner cross-media deals, MSN already offers advertisers packages via MSNBC and and NBC, says Mike Siegenthaler, MSN's lead marketing manager.

"Media packaging is not a new thing. It's interesting because it's back in the limelight again, but we're in that space, playing big," Mr. Savage noted.

Industry observers say Microsoft's hefty war chest helped it deploy a multimillion-dollar global ad campaign for MSN. The effort, via Interpublic Group of Cos.' McCann-Erickson Worldwide, San Francisco, has helped boost brand awareness and drive traffic.

"MSN is getting a lot of attention," agreed Lisa Haas, research analyst for investment bank Wit SoundView. "Between Expedia and Hotmail [and other properties], it seems to be getting some traction, but I would say no one is immune to the pullback in advertising. They are [MSN] probably holding their own."

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