Digital Journal — Finally, Google and Yahoo could be getting some real competition from Microsoft. Not for searching — both companies still do that better — but rather in the world of advertising.
Microsoft has announced its new “Microsoft Digital Advertising Solutions” the company says could reach up to 465 million people per month.
“As today's consumers spend more and more time online across various digital devices like mobile phones and video games, advertisers are finding they can no longer reach their entire target audience by advertising on a single medium,” said Joanne Bradford, Microsoft's chief media revenue officer and corporate vice-president.
In a statement released by Microsoft, Bradford goes on to say Microsoft is “uniquely positioned” to connect advertisers to an extensive global audience with a “high level of consumer engagement.”
It’s the usual hype-soaked marketing lingo that plagues every press release, but this time it can’t all be classed as hyperbole. In fact, if anyone has a chance at getting its hand into the Google/Yahoo purse, it’s Microsoft.
Microsoft says its new ad space will be made available on MSN, Windows Live, Xbox Live and Office Online services. It would also include unique advertising opportunities through its partnerships with Facebook and in-game advertising leader Massive Inc. And let’s not forget, the company also has its MSN Messenger program, a browser and an operating system under its banner. The potential arenas in which Microsoft can compete are
very widespread. When compared to Yahoo or Google, Microsoft has a few distinct advantages over simple text ads.
“Microsoft’s advertising business is growing quickly and becoming more sophisticated,” Bradford said. “It is our responsibility to clearly articulate to advertisers how they can apply our broad set of assets and relationships to reach consumers across the many digital touch points of their day.”
As Microsoft continues to migrate its business model to an ad-supported one in which products are distributed at little or no cost to the consumer, new revenue streams will become the pillars on which its business will grow.
The problem for Microsoft now is time — Google and Yahoo have had a big head start on the exploding online advertising market and there is a
lot of catching up to do. Both Yahoo and Google have spent years developing ad programs and both have a very extensive and wealthy customer base.
According to
BetaNews, Microsoft’s MSN division pulled in $1.39 billion (all figures in US dollars) in ad revenue which is still far behind Google’s $6.07 billion and Yahoo’s $4.59 billion.
But Microsoft is optimistic about its future and aims to increase sales fourfold over the next three years. No small feat, but not imposible either, as the company’s weaknesses in search are arguably directly linked to its advertising woes (the recent launch of Windows Live Search shows a lot of promise in patching up these holes).
Microsoft says it will beat Google at its own advertising game by offering advertisers a chance to target consumers more effectively, with ads that can be tailored and delivered based on demographics the company collects from users and analyzes in real-time.
The company is also a leader in two distinct areas: mobile platforms and video games. With its Windows Mobile platform picking up speed among PDA and smart-phone users, Microsoft is literally in the pocket of millions of corporate customers all over the world. And with its Xbox and Xbox 360 gaming consoles, Microsoft can easily reach millions of teens and 20 somethings — a market that advertisers are aggressively pursuing.
Microsoft is playing its hand wisely, forcing advertisers to think about future advertising mediums very carefully. It’s Microsoft’s long-term strategy that could pay off handsomely. “This is Microsoft's effort to control the conversation a bit and have a chance to lay out its vision early in the game,” Gartner analyst David Smith told the
E-Commerce Times.
The catch-up game is never a position in which a company wants to find itself. And unfortunately for Microsoft, the company has a lot of work to do to recover revenue it will lose by moving software on to the Web.
But like any major growth and re-investment plan, it takes time and a lot of money to make things work. And Microsoft is finally starting to do two things very well: listen and evolve.
