June 26, 2006: A Marketer's Guide to MSN

Introduction

Microsoft was the last of the Big Three search engines off the starting blocks, but as is so often the case with anything the Redmond, Washington, company does, it has been successful in snaring millions of users. In fact, MSN now claims to attract more than 465 million unique users worldwide per month, with localized versions available globally in 42 markets and 21 languages.

Click here for MSN network demographic stats.

Microsoft has introduced a variety of new products and services on MSN over the past few months. At the seventh annual MSN Strategic Account Summit, Microsoft CEO Steve Ballmer announced the launch of Microsoft adCenter, an online advertising platform that serves all paid search traffic on Microsoft online properties in the U.S. market.

In this third piece in iMedia's series of looks at the big portals, we'll review MSN's capabilities and interactive marketing opportunities in content, search, ecommerce, email/IM/voice and research tools.

Content

You can get lost wading through MSN's extensive directory-- there are literally tens of thousands of pages of content. Some major categories include:

Travel
Includes City Guides, Hotel Deals, Maps & Directions, Local Traffic, Travel and Air Tickets. Click on Hotel Deals, for example, and you'll go immediately to Expedia.com.

Finances
Examples of links include Hot Stocks, Buy a House, Money, Retiring and Starting a Family. With Buy a House you can find a home with Realtor.com, get info on rentals, insurance, loans and financing, even search for foreclosure properties.

News & Sports
Has links to MSNBC, Sports by Fox Sports, Slate Magazine and Weather.

Other players include:
Travel: Travelocity, Orbitz, Hotels.com Finances: CBS MarketWatch, Yahoo Finance News & Sports: CNN, Yahoo, Reuters

What this could mean for marketers
MSN's extensive reach is ripe for marketers' picking. With hundreds of millions of users gravitating to the site each month, there are myriad marketing opportunities. The key is determining which category is best for your product and/or service.

With MSN Travel, marketers can sponsor a destination guide package, use run of site ad offerings, or target messages on particular site areas. MSN Travel accepts standard targeting and rich media options.

CNBC on MSN Money can help marketers target users who are making important decisions about their finances. Opportunities include banner, button, rectangle, skyscraper and textlink ads, as well as sponsorships.

With content from NBC, Newsweek, BusinessWeek, the Washington Post, Forbes and more, MSNBC engages its audience with streaming video, polls and live votes, chats and message boards. And that engagement carries over to advertising.

MSN, one of the largest online properties, and Fox Sports on MSN, the leader in online sports reporting, are combining to deliver comprehensive sports coverage for users on the internet. An example of a current marketing opportunity is a 2006 World Cup Game sponsorship package.

MSN's ad buying tools

One of the most important initiatives launched by Microsoft in recent years is the Microsoft adCenter, which is serving as the ad engine for MSN, Windows Live and other Microsoft online services. The goal is to help advertisers strategically plan online buys and get better ROI by using real audience intelligence and advanced targeting capabilities.

Microsoft adCenter -- with 14,000 customers currently -- gives advertisers information about consumers' geography, age, gender, lifestyle and wealth. MSN claims this is quite different than what's been offered by its competitors.

MSN doesn't currently have a contextual advertising product offering, but according to company representatives they are in the product planning phase. No timeline has been released.

What this could mean for marketers:
Microsoft adCenter will ultimately give advertisers a one-stop shop venue, whether buying search, contextual or display ads across multiple Microsoft properties. Key features of interest to marketers include exclusive targeting, budget controls, keyword generation tools, bulk keyword upload tools and built-in performance reports. Marketers can thus easily track ad campaign performance and report results.

Ecommerce

MSN's goal in luring viewers to shop online with them is the turnkey nature of its shopping section. Visit shopping.msn.com, for instance, and you can choose from more than 38 million products at more than 7,000 stores. Some featured retailers prominently displaying their logos include Dell, JC Penny, Overstock.com, FTD.com, WalMart, Target and Eddie Bauer. Categories comprise literally every conceivable product a consumer could possibly want or even think of-- everything from flowers to home furnishings to tools and hardware.

MSN Yellow Pages uses Verizon SuperPages to give consumers a research tool while also steering them to a particular brand, URL or retail location. The site attracts an unusually high proportion of well-heeled customers-- 42 percent have household incomes exceeding $75,000 per year, and most visit the site to research medical and professional services, entertainment, hotels and retail outlets.

MSN also offers Windows Live Expo, a Craigslist-like social listing service that allows members to find and sell items, discover information and meet other parties in their area.

Other players include:
Shopping.com, Pricewatch, Craigslist

What this could mean for marketers
In MSN's shopping section, retailers can prominently feature their logos and links to their homepages. In addition, brands can be listed in the sections where products are promoted within MSN's shopping page. Since these shopping pages are the path of least resistance for loyal MSN users, brands and retailers alike should make sure to have presence in this high-traffic, high-engagement area.

Search

Microsoft has invested $100 million over the past year to improve MSN's search capabilities. MSN Search is now available in 31 markets and 17 languages. Nielsen//Net Ratings reported in March that MSN Search now attracts 39.1 million unique users who perform search queries each month, and that 70 percent of the world's internet users have used MSN Search.

MSN Search has features such as Search Builder, which lets users build a search query by adding or excluding terms or other parameters -- such as sites, countries, regions, and languages -- that narrow the search. MSN users can employ one option or all options, as needed, to support search focus. The MSN Search Toolbar with Windows Desktop Search also enables users to search from Internet Explorer, Windows Explorer, Outlook and the desktop.

Live.com enables internet users to create a fast, clean and personal homepage by choosing their content and layout.

Other players include:
Google, Yahoo, Ask.com

What this could mean for marketers
Advertising on MSN Search is only available in the United States, France and Singapore, so companies that are looking for a truly global audience may want to consider other search engines as well. But there are numerous opportunities under the Sponsored Sites section for paid search advertisements. Microsoft says the paid listings are ranked based on keyword bids (algorithms can be used to help improve rankings). Placement of the paid listings is generally separated from organic listings so they can gain maximum exposure at the top of the search results page, or on other areas of a page. At this point MSN does not offer marketing opportunities around Live.com, though it is safe to assume that there will be opportunities presented for brands to connect to consumers in the near future.

Email, IM

Roughly 85 percent of all North American companies use IM, according to a recent report by market research firm Radicati Group. Some researchers even predict it will surpass email as the primary way people interact electronically by the end of this year-- both professionally and socially. According to comScore Networks, MSN Messenger is now ranked as the most-used client, with 61 percent of the worldwide market. MSN Messenger has a strong hold over the market thanks to its 90 percent reach in Latin America and 70 percent in Europe and Asian Pacific markets. Microsoft's IM client is still neck and neck with AOL Instant Messenger in the United States, with Yahoo! Messenger trailing right behind.

MSN Messenger has proven popular because it offers a wide variety of features-- you can chat online via text, voice or video in real time and also send files, photos, play games and personalize display pictures.

In addition to Outlook and Hotmail, enhanced versions of both -- Outlook Live and Hotmail Plus -- are also offered on MSN. Outlook Live allows users to locate and manage multiple email inboxes, calendars and contacts; users can also search and organize messages across accounts. Hotmail Plus offers a 2 GB inbox, attachment capacity up to 20 MB per email, smart junk email filters and virus scanning/cleaning.

Other players include:
Email: Yahoo Mail, Netscape Mail, Gmail IM, AIM, Yahoo Messenger, Google Talk

What this could mean for marketers:
As more communications is conducted online -- both email and IM -- marketers leveraging MSN will find increased opportunities to learn even more about what products and services users want. MSN, obviously, would prefer that users rely on them for everything-- IM, email, search, news, et cetera.

MSN plans to support Windows Live Mail through ad-funding and have begun beta testing house ads, and recently began testing some external ads in Windows Live Mail in the U.S. markets only.

With MSN Messenger advertisers have the opportunity to connect to consumers through theme packs, often complete with buddy icons, messenger backdrops and information about the brand. There are a number of other options that are available for creative marketers to reach consumers.

Research tools

MSN offers advertisers a number of research tools. One of these is AdIndex from Dynamic Logic, a research application to measure advertising effectiveness. AdIndex studies are run in conjunction with an online ad campaign and are designed to provide advertisers, agencies and publishers with traditional brand metrics to gauge the impact of their online advertising campaign. Every time a client's ad is served to a website visitor, an exposure is recorded in the AdIndex exposure database.

Visitors are randomly intercepted to take a brief survey and, upon their consent, are asked a series of questions designed to measure the branding impact of an ad campaign. Responses are broken out by those exposed to an ad and compared to those not exposed. Since both groups are recruited from the same websites and the only variable between the groups is exposure to an ad, the impact that exposure has on metrics can be measured-- such as brand awareness, ad recall, message association and purchase intent.

Other players offer:
Google Analytics, HitBox, WebtTrends

What this could mean for marketers:
Measuring what happens after someone sees an ad is critical. Marketers using MSN's research tools may be able to quickly assess the impact of real-world campaigns in the minds of consumers and not only achieve their branding goals, but make a profit too by compelling consumers to purchase their products and services.

Microsoft also recently acquired DeepMetrix Corp., a provider of web analytics and business intelligence tools for online marketers and publishers. The acquisition will help deliver to marketers new web analytic applications in the near future.

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