Microsoft Unveils AdCenter, Shows Vision for Future Advertising - If Search is Just One Piece…
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This leads back to one of the points that Steve Ballmer made in his speech: search is just one piece of a bigger puzzle for Microsoft. The idea is to let advertisers show their ads across various Microsoft products: television, online video games, the MSN portal, email, instant messaging, and others. The specific areas Microsoft noted will launch ads in the near future include Windows Live Mail, Windows Live Spaces, Windows Live Safety Center, Windows Live for Mobile, Office Live and Office Online, and the Xbox website Xbox.com. Commenting on the move, Kevin Lee, chairman of search marketing firm Did-it, noted that “It's a pretty holistic strategy. They understand all those locations can stimulate new search activity."
In order for this to work, however, Microsoft needs to draw more people into using their products and services. The company can’t afford to let this opportunity pass it by, either. Google and Yahoo are currently the biggest players in the online advertising market, and the market is huge. Forrester Research believes it will grow from $11.9 billion this year to $18.9 billion three or four years from now.
While presenting a vision of advertising across a wide range of platforms, Microsoft made some announcements that sound like it is still trying to catch up with Google. For instance, it acquired DeepMatrix, a privately held provider of Web analytics and business intelligence tools for online marketers and publishers. Microsoft plans to include web analytics applications in future releases of Microsoft adCenter. The move sounds reminiscent of Google’s purchase of Urchin and subsequent creation of Google Analytics.
In any case, vision or no, Microsoft faces an uphill battle. Most businesses are concerned with what works now. And the fact is, right now most web surfers use Google to search the Internet, because it has a reputation for delivering the most relevant results. Where web surfers go, advertisers follow. While Microsoft has announced that it plans to invest $2 billion in research and development (most of which is expected to go into its search technology), it still hasn’t been able to match Google’s technology. If Microsoft does manage to deliver a search engine as good as or better than Google’s, it will still have to fight its earlier bad reputation; Ask.com changed its name and ditched its butler to fight a similar battle.
It will also have to fight the inertia of businesses and advertisers already working with Google. Tech review Chris Pirillo of Lockergnome sums it up nicely. "Why switch if what you're currently using isn't broken? I'm not going to switch to another advertising network unless I know my returns will be greater than what they currently are."
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