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MSN to invest $100m to woo advertisers online

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CIOL Bureau
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Reshma Kapadia

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NEW YORK: Microsoft Corp.'s Internet service MSN said on Thursday that it

will invest $100 million in its digital marketing program MSN Advantage

Marketing to woo more advertisers, at a time when many are curtailing their

spending amid economic uncertainty.

Many Internet media players are re-examining their marketing strategies as

they feel the sting from the overall ad slump and find it even more difficult in

the currently soft economic climate to lure traditional advertisers onto the

Internet.

"We have gotten to the point where (MSN) is in the game, but this is a

great opportunity to marry it with our technology development and assets from

Microsoft," said Richard Bray, MSN vice president in an interview.

"It's a rare opportunity to invest when others are pulling back."

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MSN has stepped up its efforts to gain share against rivals AOL Time Warner

Inc. unit America Online and Yahoo! Inc., and MSN believes Microsoft's deep

pockets and technology expertise give it a leg up.

The $100 million investment in the MSN Advantage Marketing program builds on

MSN's effort to create better marketing packages for its clients. MSN aims to

work closely with select companies and ad agencies through two programs, MSN

Premier Partners and Agency Alliances, in hopes of getting companies to embrace

the Web.

"We are opening the kimono and letting them in," Bray said of the

partners program. The Premier Partners program targets Fortune 500 companies

investing more than $20 million a year in MSN marketing services; Microsoft

.NET, which aims to build the Internet into all its software; and consulting

services.

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Qwest Communications International Inc. is one of the first Premier Partners,

and MSN said Thursday that Digitas Inc. became the first marketing agency to

join the Agency Alliance Partner program. Through the programs, MSN will try to

identify what Microsoft services will best help clients achieve the goals of

their campaigns and help in the development of new ad units.

One example is a full-page ad that appears when a visitor first moves onto a

Web page, which then fades into a vertical "skyscraper" ad that offers

different images and information through the manipulation of arrows on the ad.

"We want to develop the market for digital marketing when no one is

taking a leadership position because of the condition of the market," Bray

said. The company has created a deals desk as part of its ad sales team to focus

on the larger deals and has reorganized internally to better address

advertisers' needs.

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MSN vs AOL



Bray said Microsoft's drive differs from that of rival AOL Time Warner,
which Bray classified as ultimately a media company.

"Given the ad environment and their exposure, they are leading with

print and broadcast and not innovating with digital marketing," Bray said.

"They don't have the same fire in their belly to develop the business. They

can fall back on print and broadcasting."

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AOL Time Warner has said that it has offered advertisers an integrated

approach for some time now. Executives have said AOL Time Warner's ability to

offer cross-platform deals that place ads on several mediums - such as cable

networks CNN, Time magazine, and the AOL service - has helped AOL Time Warner

continue to strike major deals.

At the Jupiter Media Metrix Online Advertising Forum, AOL's worldwide

interactive marketing president Myer Berlow said the company has had a

"very high level of renewals" for its pacts and has seen more

traditional advertisers joining the mix.

"As we move forward, more traditional advertisers are going from

three-year deals to 18 month deals, which is a natural progression," Berlow

said.

In response to criticism that AOL Time Warner is set in its ways and against

experimentation, Berlow said "I think we have become more and more

flexible. We have to find ways to integrate the experience so that (ads) don't

look like ads. It has to be something consumers want."

(C) Reuters Limited 2001.

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