Redmond, Washington — World’s largest software monopolist Microsoft Corp. is apparently attempting to keep pace with search engine giant Google Inc. and social media humongous Facebook Inc., by adding more features into its Internet display- advertising products to maintain its edge in the $12.3 billion market in United States.
The Redmond, Wash.-based software maker in association with AppNexus Inc. and Mediamath is unveiling new tools this month designed to help customers in more effectively customizing their ads and simultaneously measure the impact of these ads as well.
Surprisingly, sales of graphical display ads, including banners and videos, are poised to escalate by 25 percent this year in the United States alone.
The company aims to encourage customers such as Publicis Groupe SA that have questioned its commitment to display ads and the Atlas software it acquired with the $6 billion AQuantive Inc. deal. As Microsoft diverted its focus to search-related ads, some marketers have devoted more display-ad dollars to Facebook and Google.
“We have continued to invest behind Microsoft and behind Atlas,” said Curt Hecht, chief executive officer of VivaKi Nerve Center, the unit that manages technology for Publicis Groupe’s digital ad agencies. “We need a partner that is as dedicated as we are. Microsoft is at a point where they need to show it is important to them.”
According to Microsoft General Manager Dennis Buchheim, who manages Atlas and other ad program said: “We are investing more, and more sensibly, in display now”. “There has been this muttering out there of, are we investing in display, and absolutely that is a major investment area for us.”
He declined to provide specific spending or personnel targets.
Atlas gives Publicis’s Razorfish, formerly a Microsoft unit, a one-upmanship over agencies that use DoubleClick, Hecht said. Still, Microsoft needs to improve Atlas, he said.
“It is every three years or so that the software needs to be rewritten,” he said. “Microsoft is now on the verge where the market is asking, ‘What is next what is the big rewrite?’ Google has continued to invest in DoubleClick.”
To keep pace with its rivals, Microsoft must revamp the design, which looks utterly obsolete and requires even expert users to run through numerous steps, said Grace Liau, who handles VivaKi’s ad operations group. Atlas users also often have to call a Microsoft engineer to help them target certain ads — an option more readily available on DoubleClick, she said.
Hence, the software giant is expanding its workforce as well as making more investment to bolster display and Atlas which are used for placement of ads on websites and allowing the advertisers to gauge the effectiveness of their ad campaigns. Besides, Google’s DoubleClick acquired in a $ 3.1 billion deal is the biggest arch rival of Atlas. Google had closed the DoubleClick deal a month before Microsoft’s purchase of Atlas from Aquantive.
In fact, going through the numbers, Microsoft now appears to be the fourth-biggest seller of display ads in the U.S. behind Facebook, Yahoo! Inc. and Google. In the coming years, display will develop much faster and become the bigger segment in 2015, according to David Hallerman, an analyst at EMarketer Inc. in New York.
“The rise we have seen with Google has certainly been impressive,” Microsoft’s Buchheim said.
Microsoft is also introducing what it calls audience–messaging tools that can ensure that a particular version of an ad is shown only to customers in certain regions, or that a customer who has already seen parts one and two in an ad series is shown the third installment, said Ryan Mackle, director of display platforms at Microsoft.
This renewed push from the software maker coincides with an expected shift in the Web-advertising market. The company also has developed a feature for its Excel spreadsheet program that makes it easier to manage media campaigns, and software that lets customers view their Atlas data in dashboards in Microsoft’s SharePoint program.