Step-changes galore as MSN fires new shots in online battle

The online realm is a rather fluid and exciting space at the moment. Companies large and small are chopping, changing and innovating in the quest to find the most effective model and close the gap between eyeball numbers and ad dollars. And MSN, with its parent company ninemsn, is set to embark on some big changes, with a new corporate umbrella brand called Mi9 that will encompass all of its brands, new ad exchange technology that basically creates a stock-market for online inventory, an increased focus on behaviourial targeting and a renewed effort to bump up online news numbers with a portal overhaul. MSN head honcho and IABNZ chair Liz Fraser says MSN is moving to cement its position as a local heavyweight in New Zealand’s online media market with the launch of Microsoft Advertising Exchange, a new piece of technology that allows real-time bidding (RTB) for advertisers with a pre-existing technological relationship in place (at this time New Zealand partner agencies joining the exchange include Ikon, OmnicomMediaGroup, Vivaki and Aegis).

“Trading targeted impressions in real-time, based on real insights and data, about individual browsers, is very powerful,” she says. “The right message to the right consumer at the right time for a market price.”

Fraser says it’s not really competing with the ad networks like AdHub, 3DI and TPN and says it’s aiming to take on Google’s Double Click Ad Exchange by selling the inventory, including display inventory across Windows Live, under the Mi9 umbrella (in addition to msn.co.nz and Windows Live Hotmail, and Messenger, it comprises more than 40 brands including Bing, Skype, Xbox, MSDR performance advertising network, and large third-party sites, including Ticketek, Hoyts, Menumania and Everybody).

She says the inventory pool will grow to include msn.co.nz, msn network partners, and other premium local online publishers.

“Third-party premium inventory is a key part of the Microsoft Advertising Exchange strategy. The bigger the premium inventory pool the greater the opportunity for advertisers to reach their desired audience and drive better ROI … Our aim is to be the largest local source of premium inventory in the RTB landscape. Besides our own publishing properties, we will partner other high quality inventory sources. But we have to offer brand safety, so publisher inclusion isn’t automatic.”

There is some contention over the auction process and what that means for publishers. Some industry pundits believe ad exchanges reduce CPM rates and online inventory yields, but Fraser says overseas experience shows publishers achieving higher yields on their inventory and agencies and advertisers recording improved return-on-investment on their campaigns.

“It’s important to understand yield management in the context of Ad Exchanges,” she says. “RTB is designed to elicit the highest bid on an impression-by-impression basis. Views about downward price pressure stem from earlier incarnations of exchanges that lacked RTB. We also layer intelligent price flooring and yield management features, using insights from our network and other advertising assets to drive higher yield for publishers.”

Given New Zealand’s relatively smaller percentage of ad expenditure online compared to US and European markets, Fraser expected relatively slower uptake of RTB.

“New Zealand has over 2 million online users and today generates approximately $300 million online ad revenue. In terms of the revenue to audience ratio, New Zealand lags behind other global markets. We think Microsoft Advertising Exchange [which was rolled out in the UK, the Netherlands, and Australia earlier this year]will be a catalyst for rapid growth.”

MSN is also set to launch its Microsoft Media Network (MMN), a new advertising platform offering 16,000 behavioural targeting segments. MMN will sell inventory (both from MSN sites and third party publishers, including competitors) to advertisers, who can buy online advertising based on past audience behaviour.

“The right content pulls a crowd, but publishers want data that offers a more vivid picture of target audiences. More than knowing the kind of people they’re talking to, advertisers want a current picture showing what people are doing online, so they can target more receptive eyeballs and improve performance. Behavioural targeting is the way to do it.”

There’s been a bit of controversy over behavioural targeting and the use of cookies recently, mostly, Fraser says, from publishers. She says the new age of data centric advertising adds new gravity to transparency and provisions for visitors to opt in or out of having their information collected for the purpose of behavioural targeting. But, as long the data isn’t personally identifiable and doesn’t jeopardise consumer privacy, she says consumers aren’t opting out because it presents more relevant advertising.

The other big shift for MSN is in the fight for eyeballs, with MSN adding new partners and local production to its news offering.

If you listen to Nielsen’s market intelligence figures, the top five sites in terms of average daily UBs for domestic audience are TradeMe, Yahoo, Stuff, MSN and nzherald.co.nz (unlike Yahoo, Fraser says MSN’s figures don’t include email). But according to Comscore, MSN New Zealand reaches a unique audience of 2.5 million (or 85 per cent) of New Zealand’s total online audience (Fraser says the fact that Internet Explorer users have msn.co.nz as their homepage doesn’t make much of a difference).

The news portal, which launches in December, will include an expanded team of eight MSN news producers and a freshly minted partnership with Australia’s news service AAP, which set up a NZ outpost when NZPA departed. This relationship effectively replaces its relationship with nzherald.co.nz (nzherald links took MSN news visitors—approximately 200,000 UBs per month—to a MSN/nzherald co-branded website).

Fraser says there will also be a broader cross section of international news from MSN New Zealand partners ninemsn and MSN worldwide and a partnership with TVNZ for video news continues.

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