Revenue from online advertising is virtual gold and everyone wants to mine it. Microsoft is now bringing AdCenter to Canada and to find out why the tech giant thinks it can outperform Google, DigitalJournal.com delved deep for an exclusive interview.
Digital Journal — Unlike the early years of Web marketing where ads were not targeted, today's big players can deliver ads through a highly sophisticated system that cater directly to your sex, age, location, and interests. When it comes to monitoring users, companies like Microsoft know a great deal about you through the sign-up information they collect when you register for a Hotmail account, for example. Big deal. Nothing new.
But today, Microsoft has announced
AdCenter is launching in Canada. That info they collected about you when you signed up for an email account is now worth a whole lot more for the Redmond giant.
AdCenter is Microsoft's advertising network that allows companies to create text-based ad campaigns and serve them to Web surfers on Microsoft's digital network. The service is already available in the U.S., France and the U.K. and it works like Google's now infamous
AdWords program (which earned a quarter of the $15.7 billion US spent on online ads last year). You create a text-based ad for your company, select keywords, set a budget for cost-per-click and your ad is served to Netizens who are searching for a product related to your company's area of expertise. According to
an article on ZDNet, Microsoft CEO Steve Ballmer was even gutsy enough to claim AdCenter will "evolve Microsoft from a software company into the world’s largest, most attractive provider of online media." Wait, Microsoft says it's not a software company?
Keep Your Eye on the Mark
Microsoft says its online network reaches two-thirds of Web users, or more than 40 million people per month in the U.S., and its launch into the Canadian market promises to let advertisers target users with unparalleled accuracy.
"Microsoft has the best reach of any online network, the most sophisticated tools and the best converting engine," Microsoft general manager of search and AdCenter marketing, David Jakubowski, told
DigitalJournal.com in an interview before the product's official launch today. "Advertisers can measure their return-on-investment through conversions and we have been rated the No. 1 advertising network in retail, travel, B2B and consumer electronics in the United States and United Kingdom."
Launched in the U.S. in May, Microsoft AdCenter now has 80,000 advertising partners who use the service, Jakubowski says. And when talking about the competition, he wasn't afraid to take the bull by the horns: "We are better than Google," he declared. "We give advertisers control you can't get anywhere else. If you want to target women, aged 18 to 25, for example, we are the only platform in the world that can adjust to target this specifically."
Being able to reach a hand-picked audience is Microsoft's big selling point with AdCenter, as Jakubowski continually talks about back-end programming that is designed to provide more control for delivering ads. He says Microsoft has opened its keyword services architecture to connect users with the back-end of the platform, meaning the user is given help in finding keywords that are the most used in search queries. They can also specify certain demographics and locations and find the cheapest click-through rate. The transparency and connection of the user interface with back-end data is what Microsoft says makes AdCenter stand out.
"The mentality of marketers is starting to change," Jakubowski said. "The advertiser will go to where it's good and online search media has grown faster than any other media. Advertising is getting increasingly complex and companies are asking for a solution that empowers them."
One such example of helping out advertisers can be found in AdCenter's new
Keyword Forecasting tool where you can enter a series of keywords appropriate for an ad campaign. The tool will spit out an impression count forecast, demographic predictions and display info in Flash, pictures or text format. A test using the keywords "digital journal" shows the trend over the last year for those keywords as well as an impression forecast:
It can further break down the search by forecasting the following age and gender breakdown:
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Microsoft says info and results come from a real sample of audience data and the tools are designed as a proof of concept.
The Canadian launch of AdCenter is an important step for Microsoft, as the company says the Great White North is one of its strongest markets worldwide. Jakubowski says about 87 per cent of the 22 million Canadians online every month will interact with Microsoft's digital network (for example: MSN Messenger, MSN.ca and Hotmail), meaning advertisers have the potential to interact with a very large demographic. Microsoft is also using its partnership with Bell Sympatico to leverage its client base, but when asked, Jakubowski would not disclose if it will be sharing click-through revenue with Bell.
Canadian advertisers have shown a great deal of interest in the online market, as
a recent Ogilvy and Mather digital media conference demonstrated. But Google is arguably the most well-known online ad provider, so Microsoft still has an uphill battle against the market leader.
Also, AdCenter has not suffered its share of problems: This past weekend AdCenter saw a bug that drastically overcharged users for click-throughs, charging as much as $1,000 per click.
Microsoft says it has resolved the issue and is now working to give those companies a refund.
Furthermore,
Marketing Shift says AdCenter is "finicky" with browsers like Firefox, recommending clients use AdCenter with Internet Explorer instead (Undoubtedly, that will aggravate many ardent Firefox fans). The publication also knocks AdCenter for a lack of help documentation, meaning advertisers could have a difficult time figuring out how to best use all the features.
But Microsoft is more than confident its platform will deliver;
a ZDNet blog shows Microsoft is willing to bet $200 it can outperform Google and Yahoo (the $200 is in free ad clicks). A cutline on the blog posts urges advertisers to "Reach out to users on MSN who converted to customers at a higher average rate than Google and Yahoo."
What Microsoft Needs for the Future
Microsoft still has its work cut out for it, as the current setup only allows advertisers to place ads within the Microsoft network and doesn't yet enable publishers to carry a Microsoft feed on third-party sites (the same way Google AdSense allows companies to host Google Ads). While Jakubowski would not give a date as to when it will happen, he
did say Microsoft would be going this route "sooner rather than later." It's a needed step for Microsoft, as it has the potential to drastically increase its ad revenue, digital footprint and market share by doing so, and I doubt it can compete aggressively against Google without it. The AdSense concept rocketed Google to success, allowing individual site publishers to collect revenue without having a high-paid sales team to hawk placement ads.
Jakubowski also says the future will see advertising embedded into videos as well as in-game placement through its Xbox Live network, which would give Microsoft an incredible presence in the online industry. Video game advertising is expected to grow considerably in the future, so having a network that works cross media is integral to Microsoft's success.
Now we'll just have to wait and see if advertisers put their money where Microsoft's mouth is.
