MSN to invest $100m to woo advertisers online

Reshma Kapadia

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."

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.

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.

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."

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.