MSN to Boost Sales with $100 Million Program

Microsoft Corp. is committing $100 million to new program designed to boost sales of its online

advertising products, according to Richard Bray, a vice president at the Redmond, Wash.-based

firm’s MSN portal.

Speaking at Jupiter’s Online Advertising Forum in New York City, Bray said the new initiative

— which MSN is calling “Advantage Marketing” — would focus on promoting the portal’s ad

inventory, related marketing services (such as customer surveys), and ad technology to marketers.

It’s a two-pronged approach, with one initiative — Premier(6) — aimed at bundling the company’s

online marketing offerings with unrelated products like consulting and software, and the other

initiative — the Agency Alliance Program — designed to forge partnerships with agencies that

advocate and resell the company’s marketing products. Boston-based interactive shop Digitas is the

first of MSN’s new partners under the Agency Alliance initiative.

Terms of the Digitas partnership were not disclosed, nor did the company give hints of how

other such deals might be structured.

“MSN Advantage Marketing represents our most significant effort to make digital marketing a

‘must-buy’ for companies in search of comprehensive and measurable direct response or branding

campaigns,” Bray said. “As a company we have a rich heritage in technology that will allow us to

innovate on behalf of our customers to help them meet their business objectives.”

Leveraging that heritage in technology is what’s behind the Premier(6) effort, which aims for

direct sales to Fortune 500 companies that commit to spending more than $20 million on a

combination of products. In Premier(6) deals, Microsoft offers bundles of MSN marketing solutions

in combination with Microsoft consulting services and software. It’s a strange package, in some

ways, in that Microsoft is trying to get companies to use its products for vastly different

objectives — marketing, business strategy, and infrastructure. The idea is to position Microsoft

as a sort of one-stop-shop partner, and sell marketing products by leveraging its reputation in

the software space.

While the amount of the investment comes as a surprise, Microsoft for some time has been

talking about the ideas that fuel these initiatives. For example, the company has long signaled an

intent to turn its internally-developed rich media ad technology into a product aimed at marketers

and agencies. More of those products — known internally as Next Generation Ad Products — are

slated for roll-out later in the year.

In addition to rich media ad technology and site inventory, the MSN program also will attempt

to sell customer surveys and market research, based on its user base. Microsoft reports about 250

million visitors per month to the site.

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