MSN Taps Digital Island for Ad Delivery

MSN aims to cut costs and streamline the delivery of its online ads, through a new deal with San Francisco-based content delivery play Digital Island.

According to the arrangement, Digital Island will host and serve ads on all MSN sites, including its Internet Explorer-linked MSN Search, Hotmail, and Digital Island will also deliver ads for MSN’s instant messenger service.

All told, the companies said it would be delivering more than 860 million ads per day.

Digital Island and competitors like Akamai are in the business of installing and maintaining servers throughout the globe, on which they cache information from Web content publishers and streaming media firms. This allows end users to download content quickly from a nearby server, rather than requesting information from a faraway host.

The process also works for ads, with companies like DoubleClick using a network of servers to get their ads to surfers quickly. Similarly, Redmond, Wash.-based MSN said it tapped Digital Island’s Footprint content delivery service to cut down on costs associated with serving ads, and with installing and maintaining ad servers worldwide.

“By outsourcing to Digital Island, we … are saving a significant amount of money on infrastructure and maintenance costs,” said MSN senior operations manager David Walters. It’s “what we need in order to keep up with demand, so that MSN can continue to drive revenue and facilitate e-commerce through online advertisements.”

Since it hosts the ads near to users, Digital Island also opens the door for increased performance, especially for bandwidth-intensive rich media ads — the effectiveness of which can be compromised by long download times.

“By supporting MSN’s growing and expanding advertising business, Digital Island is enabling MSN to save significantly on build-out and IT costs, and focus on its value-added solutions,” said Digital Island’s Tim Wilson, who is chief marketing officer at the firm.

The news comes as MSN is stepping up its efforts to give advertisers access to rich media ad units. Mike Siegenthaler, the portal’s lead marketing manager, told in late April that MSN would be rolling out six new rich media ad formats in coming months. That news came as the company inked a new deal for high-speed Internet access with DSL provider Qwest, creating a broadband user base that eventually will be targeted by rich media advertisers.

The ad serving agreement, of which financial terms were not disclosed, emerged from an existing relationship between Digital Island and MSN parent Microsoft. Through that deal, Digital Island provided Internet infrastructure services like content delivery, application services and streaming services for the software giant.

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