Microsoft boosts Web ad products
New tools a bid to catch up with Facebook, Google
SEATTLE - Microsoft is adding features to its Web display-advertising products to keep from losing customers to Google and Facebook in the $12.3 billion US market.
The world’s largest software maker is unveiling tools and partnerships with AppNexus Inc. and MediaMath this month designed to help customers more effectively tailor ads and measure their impact. Sales of graphical display ads, including banners and videos, are poised to climb 25 percent in the United States this year.
The company aims to reassure customers such as Publicis Groupe that have questioned its commitment to display ads and the Atlas software it acquired with the $6 billion AQuantive Inc. deal. As Microsoft shifted its focus to search-related ads, some marketers have devoted more display-ad dollars to Facebook and Google.
“We have continued to invest behind Microsoft and behind Atlas,’’ said Curt Hecht, chief executive officer of VivaKi Nerve Center, the unit that oversees technology for Publicis Groupe’s digital ad agencies. “We need a partner that’s as committed as we are. Microsoft is at a point where they need to show it’s important to them.’’
Microsoft is adding personnel and funding to bolster display and Atlas, which is used to place ads on websites and help advertisers measure performance of ad campaigns. Atlas vies with DoubleClick, acquired by Google in a $3.1 billion purchase announced a month before the AQuantive deal.
“We’re investing more, and more intelligently, in display now,’’ said Microsoft’s general manager, Dennis Buchheim, who oversees Atlas and other ad software. “There has been this mumbling out there of ‘are we investing in display?,’ and absolutely that is a major investment area for us.’’
He declined to provide specific spending or personnel targets.
Atlas gives Publicis’s Razorfish, formerly a Microsoft unit, a competitive edge over agencies that use DoubleClick, Hecht said. Still, Microsoft needs to improve Atlas, he said.
“It’s every three years or so that the software needs to be rewritten,’’ he said. “Microsoft is now at that point in time where the market is asking, ‘What’s next?’ . . . Google has continued to invest in DoubleClick.’’
Microsoft must modernize the design, which looks outdated and requires even experienced users to run through multiple steps, said Grace Liau, who runs VivaKi’s ad operations group. Atlas users also often have to call a Microsoft engineer to help them target certain ads - an option more readily available on DoubleClick, she said.
Microsoft’s renewed push coincides with an expected shift in the Web-advertising market. Search-based ads - text-only links that appear alongside Web queries - have represented the bigger part of the US market. In the coming years, display will grow faster and become the bigger segment in 2015, according to David Hallerman, an analyst at EMarketer Inc. in New York.
Microsoft is now the fourth-biggest seller of display ads in the United States behind Facebook, Yahoo, and Google. Microsoft’s share is less than one-third of Facebook’s, and about half of Google’s. In 2008, a year after Microsoft agreed to buy AQuantive and Google announced the DoubleClick deal, Microsoft was third behind Yahoo and AOL Inc.
