Microsoft
To promote Discovery Channels fifth season of the crab fishing documentary “Deadliest Catch,” Microsoft came up with a package of ideas it has never tried before. Ads will take over the MSN.com and MSN mobile homepages and 90 percent of ad space on MSNBC and Fox Sports sites. Microsoft will run sweepstakes in video-games like Shaun White Snowboarding and send text- message reminders to phones to watch or record the show.
“Microsoft just came in like rock stars on this,” Donna Murphy, the Discovery Channels vice president of marketing strategy, said in an interview. “They were the first ones to really blow it out in every direction.”
Its a victory for Microsoft, which is fighting for sales of display ads in an online ad market expected to post the slowest annual growth since 2001, according to Sanford C. Bernstein & Co. With Google having virtually locked up the market for ads that appear next to Web search results, Microsoft and Yahoo are fighting for a display market that will only grow 1.5 percent this year, compared with 37 percent in 2007, Bernstein said.
Separate Teams
Microsoft couldnt have pulled off a campaign like this until recently, said Keith Lorizio, a vice president in Microsofts ad sales group. Separate teams handled Web sites like MSN.com, MSNBC and Fox Sports, ads on mobile phones, video- games and the Xbox Live Internet service — and usually didnt work together. Account representatives lacked expertise in newer mobile and video-game ads, so they pushed the same old banner ads on MSN.com that they knew best, Lorizio said.
“If Discovery would have come to us in the past, the ball would have gotten dropped in the handoff of trying to go across all these different properties,” he said. “We never would have had such a diversified campaign.”
Microsoft MSNs share of the display market fell to 8 percent in the fourth quarter, from 12 percent a year earlier, according to Nielsen Online, which tracked how many times ads were shown to users. Yahoos share increased to 30 percent from 25 percent. The average price Microsoft charged for ads also fell, according to Bernstein.
Microsoft, based in Redmond, Washington, rose 48 cents to $19.67 on April 9 in Nasdaq Stock Market trading.
Frosted Mini-Wheats
To promote the premiere of “Deadliest Catch” tomorrow night, Discovery will take over MSN.com, MSNBC and Fox Sports, the first time those sites have devoted so much space to a single advertiser. A mobile-phone contest will give away points that can be used to purchase video-games and movies from Microsofts Xbox online service.
Another campaign the company says is a model for the future is a promotion for Kellogg Co.s Frosted Mini-Wheats, where Microsoft created an online community for the cereal brand that let moms discuss childrens education.
The display ad market overall is suffering as competition has pushed down prices by an average of 30 percent to 40 percent in the past year, Lorizio said.
Recession Pressure
Display — including banners and animated ads — will account for a quarter of global Web-ad revenue this year and grow 1.5 percent, according to Bernstein. Those categories dont include things like classifieds and direct e-mail offers, as well as newer areas such as mobile and ads in online TV shows and YouTube videos. By comparison, search comprises 35 percent of the market and should grow 11 percent, Bernstein says.
No single ad vendor has figured how to dominate in display and clients are still trying to determine how to make these types of ads consistently profitable, said Discoverys Murphy. The recession is increasing the pressure.
“There are fewer dollars in the market right now and everybody is having to get innovative in terms of how are we going to make everything work a little harder,” she said.
In the boom years for Internet advertising, clients automatically put Microsoft, Yahoo, and other big Web sites in their campaigns, Howe said. Now companies that had grown used to an industry expanding more than 20 percent a year must fight for a place.
Bread and Butter