MSN Will Invest $100 Million to Woo Online Advertisers

Baldwin Louie — Thu, 09 Aug 2001 15:00:00 -0700

NEW YORK, Aug 9 (Reuters) - Microsoft Corp.'s <MSFT.O>
Internet service MSN said Thursday it will invest $100 million
in its digital marketing program MSN Advantage Marketing to woo
more advertisers, at a time when many are curtailing their
spending amid economic uncertainty.

Many Internet media players are reexamining their marketing
strategies as they feel the sting from the overall ad slump and
find it even more difficult in the currently soft economic
climate to lure traditional advertisers onto the Internet.

"We have gotten to the point where (MSN) is in the game,
but this is a great opportunity to marry it with our technology
development and assets from Microsoft," said Richard Bray, MSN
vice president in an interview. "It's a rare opportunity to
invest when others are pulling back."

MSN has stepped up its efforts to gain share against rivals
AOL Time Warner Inc. <AOL.N> unit America Online and Yahoo!
Inc. <YHOO.O>, and MSN believes Microsoft's deep pockets and
technology expertise give it a leg up.

The $100 million investment in the MSN Advantage Marketing
program builds on MSN's effort to create better marketing
packages for its clients.

MSN aims to work closely with select companies and ad
agencies through two programs, MSN Premier Partners and Agency
Alliances, in hopes of getting companies to embrace the Web.

"We are opening the kimono and letting them in," Bray said
of the partners program.

The Premier Partners program targets Fortune 500 companies
investing more than $20 million a year in MSN marketing
services; Microsoft .NET, which aims to build the Internet into
all its software; and consulting services.

Qwest Communications International Inc. <Q.N> is one of the
first Premier Partners, and MSN said Thursday that Digitas Inc.
<DTAS.O> became the first marketing agency to join the Agency
Alliance Partner program.

Through the programs, MSN will try to identify what
Microsoft services will best help clients achieve the goals of
their campaigns and help in the development of new ad units.

One example is a full-page ad that appears when a visitor
first moves onto a Web page, which then fades into a vertical
"skyscraper" ad that offers different images and information
through the manipulation of arrows on the ad.

"We want to develop the market for digital marketing when
no one is taking a leadership position because of the condition
of the market," Bray said.

The company has created a deals desk as part of its ad
sales team to focus on the larger deals and has reorganized
internally to better address advertisers' needs.

MSN vs AOL

Bray said Microsoft's drive differs from that of rival AOL
Time Warner, which Bray classified as ultimately a media
company.

"Given the ad environment and their exposure, they are
leading with print and broadcast and not innovating with
digital marketing," Bray said. "They don't have the same fire
in their belly to develop the business. They can fall back on
print and broadcasting."

AOL Time Warner has said that it has offered advertisers an
integrated approach for some time now.

Executives have said AOL Time Warner's ability to offer
cross-platform deals that place ads on several mediums --such
as cable networks CNN, Time magazine, and the AOL service --
has helped AOL Time Warner continue to strike major deals.

At the Jupiter Media Metrix Online Advertising Forum, AOL's
worldwide interactive marketing president Myer Berlow said the
company has had a "very high level of renewals" for its pacts
and has seen more traditional advertisers joining the mix.

"As we move forward, more traditional advertisers are going
from three-year deals to 18 month deals, which is a natural
progression," Berlow said.

In response to criticism that AOL Time Warner is set in its
ways and against experimentation, Berlow said "I think we have
become more and more flexible. We have to find ways to
integrate the experience so that (ads) don't look like ads. It
has to be something consumers want."

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MSN Will Invest $100 Million to Woo Online Advertisers