It has been long suspected that MSN would eventually jump into the contextual ad game with their own competitive program to Google AdSense. And quotes from Yusuf Mehdi of Microsoft in today’s New York Times seem to officially confirm the fact it is a program they are working on in conjunction with their soon-to-be-released AdCenter PPC program.
Microsoft also expects to use its new system to sell ads on other Web sites, just as Yahoo and Google do with their systems.
The article also goes on with specific comments by Mehdi:
He said that once Microsoft had a large number of advertisers and had refined its ad placement formulas, it would be able to compete with Google and Yahoo to sell ads on other Web sites because it would be able to offer higher ad revenue.
There is a virtuous cycle in this business, Mr. Mehdi said, because the more sites in an advertising network, the more advertisers are attracted and the higher the potential advertising prices. For Microsoft, running such a network has another benefit – the building of relationships with Web site owners, many of whom are users of its software and online services.
MSN launching their own contextual ad program comes as little surprise to those familiar with the industry. After all, Google generates a significant amount of income from their content network partners and Yahoo launched their own beta program YPN last month. However, if MSN gets plenty of advertisers on board with AdCenter, they have some advantages over both Yahoo & Google.
Because MSN AdCenter will feature options of target ads to particular demographics, including age and gender, this could allow publishers greater flexibility in what ads they show. For instance, I have a few sites targeting female audiences… if I could include this information in the MSN contextual ad platform, these sites could be given higher priority to showing ads that advertisers are targeting female audiences. This combined with other targeting methods could result in high paying ads for publishers and good CTR and ROI for advertisers.
How far away could the MSN contextual ad program be? We probably won’t see beta for a while. They not only work out any potential kinks in AdCenter once it starts its US beta in October, but they also need to build up ad inventory as well. When they launch, they will still be using Yahoo ad inventory as well as their own, with plans to have fully replaced Yahoo by the spring.
It will phase in the system in the United States, using its own ads on some pages and ads sold by Yahoo on others, starting in October, said Joseph Doran, MSN’s senior director of monetization. The company hopes to replace the Yahoo ads entirely by next spring.
And as the MSN AdCenter US beta will start relatively small as an invite-only beta, it would be very likely that they would do something similar when they do launch a contextual ad program. It could end up being something similar to the limited beta release YPN is currently doing.
So while you won’t be able to sign up for an MSN contextual ad program tomorrow, the good news is that it is in the plans of AdCenter to eventually offer their own program to compete with AdSense and YPN.