Brushing off the sting of its broke down deal with Yahoo!, and now grabbing an opportunity to move forward its advertising strategy, Microsoft Corp., adding a new weapon to its advertising arsenal, on Wednesday announced the acquisition of Navic Networks, an interactive television ad developer that specializes in delivering targeted, interactive ads to users of digital cable set-top boxes.
“Additionally, the software giant gains Navic’s ‘Admira” media placement platform, the company said in a statement.”
Waltham, Massachusetts-based Navic works with apex cable companies offering targeted TV advertising with a promising ad network called Admira. It works with cable companies like Time Warner Cable, Cox Communications and Charter. Dish Network also uses its technology. Its technology is used to run ad campaigns targeted to viewer groups, and also offers interactive features like the ability to click through for long-form content.
“We are clearly making a commitment to emerging media,” Brian McAndrews, senior vice president of the Advertiser and Publisher Solutions Group at Microsoft, said in a statement. “In the long run, we want to be a platform across all media.”
Navic utilizes audience measuring records to determine which broadcast commercials might be of interest to households. It then works with the cable provider to place interactive overlays on top of the ads, giving viewers options to click with their remotes for additional information.
Choice includes getting pamphlets via e-mail or even regular mail, using personal information on file with the cable company. Microsoft hopes the technology will help it gain a wider advertising reach than ever before.
The purchase is a logical extension for Microsoft, which already provides a platform for cable service providers to deliver TV programs over IP (Internet Protocol) networks through its Mediaroom software.
The acquisition also puts Microsoft in head-to-head competition with a Google program that lets advertisers create TV commercials and choose the networks and times that they air by filling out an online form. Microsoft, based in Redmond, Washington, is betting that a combination of online and TV ads will bolster its Internet unit after it dropped a plan to buy Yahoo! Inc.
Navic manages television commercials for business groups such as Allstate Corp., Ford Motor Co., Wal-Mart Stores Inc. and Nissan Motor Co. Microsoft, the world’s largest software maker, will add Navic’s sales to the same division that runs its online services, which was the company’s only money-losing unit last quarter. The division’s loss widened to $228 million in the quarter ended March 31, from $171 million a year earlier.
One of the main powers of Navic’s software is to keep consumers’ attention by delivering ads that are relevant to a specific audience despite the increasing ability of viewers to avoid advertisements.
Navic’s software does that by gathering a variety of metrics on viewers. The company’s HyperGate Transport can track what programs a digital cable set-top box user has seen, collect demographic information and record what advertisements have already been viewed. “No personal information is collected or aggregated,” according to information on Navic’s Web site.
Based on such data, advertisers can then plan campaigns aimed at audiences with certain characteristics using a Web-based interface called Admira Optimized Media. That software can manage the scheduling of ads and budgets as well as deliver performance reports.
McAndrews painted the move as a way to “accelerate” Microsoft’s efforts to build a wide-ranging ad platform that would allow advertisers to place, target and track ads on the Web, mobile, in video games and now TV.
Microsoft is seriously on a buying spree in the advertising space for more than a year. Last summer, for instance, Microsoft bought out online advertising giant a Quantive for $6 billion. It has also added potentiality through acquisition, such as the 2006 purchase of video game ad network Massive and the 2007 buy of mobile ad network Screentonic.
This latest acquisition is also a way to keep pace with Google, which is making a push to enter the estimated $80 billion TV ad market, and provides the company with an access to another source of advertising revenue -– interactive television, which is becoming more and more popular — and an advertising market that has not already been dominated by Google. When all broadcast television becomes digital next year, the buyout may prove to be timely as well.
“Our ultimate goal is to take the things you can do on the Internet, including targeting and accountability, to television,” McAndrews said. “We see TV looking a lot like the Internet.”
McAndrews said Microsoft has moved on from its failed bid to buy Yahoo!, which last week struck a deal for Google to sell some of the search ads on its site and through its ad network. The agreement means “less choice and less innovation and it is not a good thing for consumers,” he said. He also predicted the deal would attract the scrutiny of regulators because of Google’s dominance of the search market.
“Yahoo! was not a strategy,” he said. “It was an acceleration of a strategy. We will continue to execute on the same strategy.”
Navic, a Waltham, Massachusetts-based company with about 110 full-time employees will become a subsidiary of Microsoft’s growing Advertiser and Publisher Solutions Group, which is also focused on targeted Internet advertising.
“Terms of the deal were not disclosed.”