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Microsoft’s Digital Advertising Solutions

Microsoft’s Digital Advertising Solutions

Microsoft’s Digital Advertising Solutions

At Advertising Week this week, Miscrosoft is announcing the launch of “Digital Advertising Solutions” and a media campaign to go with it. It’s an effort to bring together Microsoft’s various properties into a unified platform that gives advertisers ways to buy reach and audiences efficiently: Xbox, mobile, PCs and, maybe, TV.

The press release asserts:

Microsoft Digital Advertising Solutions offers advertisers the ability to reach more than 465 million consumers each month across the MSN® network and millions more through Windows Live™, Xbox Live® and Office Online. Microsoft’s advertising portfolio extends its reach across some of Microsoft’s latest releases such as Live Search and Live Local Search, through relationships such as those with Facebook, and the acquisition of in-game advertising pioneer Massive Inc.

It’s an impressive “portfolio,” but there are still a bunch of bugs to be worked out of adCenter according to anecdotal remarks on various search discussion groups (I haven’t used adCenter myself). But the user data and reach that Microsoft offer are appealing to marketers in an era of growing media fragmentation.

Marketers are also hungry for more options than just Google and Yahoo and many are rooting for adCenter. So the question invariably arises: How will this impact Google or Yahoo!? I would argue not a ton in the near term. But a better question might be, how will this impact traditional media like newspapers or TV?

I recently did an analysis of the online spending of the top retail advertisers in print newspapers. MSN and Microsoft properties are already quite prominent in the online media buying. By contrast, very often you don’t see newspapers among the top 20 or even the top 50 sites at which major retailers are spending their money online. And these are retailers that typically spend 40% to 60% of their ad budgets in print newspapers. It’s just very hard to buy reach with online newspapers today (Real Cities and Centro notwithstanding). That’s a big problem for newspapers, which is only going to get worse without immediate action.

TV also is likely to suffer, especially in the coming recession (whenever that occurs), because of the “accountablility” issue. In a time of tightening budgets and the need to justify spending and see ROI, the Internet will likely win over traditional TV.

Greg Sterling is the founding principal of Sterling Market Intelligence, a consulting and research firm focused on online consumer and advertiser behavior and the relationship between the Internet and traditional media, with an emphasis on the local marketplace.

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