MSN AdCenter Shows Search’s Targeted Future

As usual, the recent Search Engine Strategies conference held earlier this month in Chicago went heavy on the new: new ways to integrate search with video, podcasts, and phone sales, new ways to use mapping in local search, and new applications for tagging and community-gene4rated content. But one of the best attended sessions offered to lay out the ways in which search advertisers can get some of the capabilities that many offline advertisers already have—the ability to target their ads by demographic profiles and by user behavior.

MSN Search adCenter is still in beta test here in the U.S. and still available to advertisers and search engine marketing (SEM) firms by application only, but the consensus seems to be that it is working well and may set a standard for the other search engines to reach for in the coming year. As presently configured, advertisers can choose to bid more for keywords that are targeted by gender, age, income, geography and daypart, with the prospect that MSN will eventually fold in lifestyle profiling too.

Until now, Yahoo! has been the only place where search advertisers could employ some measure of targeting. But MSN is offering advertisers the chance to access substantive user data, collected from registrations on MSN’s many affiliated sites, such as Hotmail and MSN Spaces. The difference is that MSN will make these profiles available to advertisers before they bid on their keywords, so that they can be used to plan future search ad campaigns as well as track the audiences of existing ones.

“We have three tenets to the program: learn, connect and refine,” said Jed Nahum, lead product manager for MSN Search adCenter. “Learn about your customers with the rich audience intelligence that we’re making available to you. Connect with those customers via rich targeting solutions. And then refine; based on that information, you should continually be able to drive more and more return on your investment [ROI].”

For example, Nahum pulled up data from searches done on the terms “Oprah Winfrey” and “David Letterman”, in homage to her first-ever visit to “Late Night” a few days before. The demographic data indicated that Oprah’s searchers skewed older and more female than Dave’s, whose searchers also scored higher on the income scale. But since there were about twenty times as many searches for Winfrey as there were for Letterman, advertisers might need to make some more sophisticated ROI calculations before placing bids on either term than simply targeting the richer or younger audience.

Advertisers will pay more to target their adCenter ads to specific groups, regions or dayparts, Nahum said. But clicks are worth more when you know more about the audience, he said, and quoted an adCenter client who compared the price differential to “paying a little extra for that better cut of meat.”

And conversations with a couple of SEM firms participating in the MSN adCenter pilot would indicate that advertisers’ palates are being tickled pretty effectively by the targeting options. The participating firms are under non-disclosure agreements with MSN and would not speak in specifics about campaigns, but the ones who spoke to SearchLine were in agreement that adCenter’s targeting capabilities open up some intriguing and useful new prospects for search marketing.

“We’re excited by what we’re seeing so far,” said Cam Balzer, director of search strategy for Performics. “There seems to be a healthy appetite for search among MSN users,” he said, referring to MSN’s decision in [?] to build its own search engine rather than re-selling Yahoo!’s services. “And now that we can begin to bid on that traffic separately from the Yahoo! audience, that’s going to be a clear advantage to us.”

Performics has put a representative sample of its clients into the MSN adCenter test, Balzer said, and has been conducting trials of the ad targeting functions. “We’ve been testing all components of that and think that there’s definitely a lot of promise in this capability,” he said. Integrating the targeting “boosters” into Performics’ campaign management platform has involved some extra work, but nothing qualitatively beyond the effort required to accommodate any new search engine.

“MSN has been very supportive about providing us the tools and information needed to complete that integration,” he said. “I’d have to say they’ve been very ‘unlike MSN’ in how collaborative they’ve been and in their eagerness to hear the advertisers’ needs and desires on this one.”

For the sake of efficiency, Performics has been concentrating on migrating clients’ top keywords to the adCenter pilot rather than trying to import complete keyword lists, head and tail. Those keywords are top performers on the Google and Yahoo! search engines not just in terms of traffic volume but in overall performance, so the advertisers should be getting comparable benefits on MSN in terms of conversions and ROI that they see on the other engines.

Migrating large keyword lists easily into MSN adCenter is an issue for SearchForce, a hosted Web marketing management solution that includes on its client roster such heavyweight marketers as Siebel Systems and Priceline.com, along with prominent dating and travel Web sites. SearchForce CEO Samir Patel said his company manages about four million keywords total for ten large customers and was motivated to sign up for the adCenter pilot because one of them, Priceline, was anxious to see what targeted search advertising could do.

SearchForce aspires to be a “black box” for its search marketing clients, Patel says; customer submit their volume and ROI requirements and then essentially let SearchForce run their campaigns end to end to achieve those goals, from managing bids to optimizing landing pages and guarding against click fraud. So the company appreciates the finer granularity of the audience intelligence that adCenter provides.

But Patel sees one potential issue for MSN adCenter in easing the process of migrating big-budget campaigns from Google and Yahoo! to MSN Search. “We’re working with them on making it easier to start up a large MSN account,” he says. “If Priceline is buying 1.5 million keywords on Google, how can we map that to MSN and automate a campaign in like two steps? Otherwise, it could take six months to rebuild those lists, upload them into MSN and apply all the targeting.” Third-party firms like SearchForce already have plenty of keyword data for their clients’ Google and Yahoo! campaigns, Patel says. MSN needs to find an easy way to apply that knowledge to its own search platform.

Patel believes that B-to-C advertisers in particular will find value in the ability to target their ads to the kind of demographic profiles MSN is offering and will begin shifting their spending to reflect that value. B-to-B and enterprise marketers will probably be less interested in aiming their ads at specific audiences, he says. Patel had just spoken with the ad rep for Siebel and been told that most of the demographic capabilities in adCenter held no interest for the company right now. But since Siebel sells large quantities of its software internationally, if MSN eventually integrates the ability to target geographic regions around the globe, the company could find that a valuable tool worth paying a premium bid price for. At present, adCenter has launched only in France and Singapore.

Both Patel and Balzer agree that search ad targeting seems likely to spread beyond MSN to the other big search engines, simply because it gives advertisers the control and functionality they will want in at least some campaigns. Yahoo! seems closest to becoming the second entrant into the targeting sweepstakes, Patel says. Yahoo! already has plenty of user registration data from Yahoo! mail and its other community sites. Google has traditionally maintained that matching ads to search content is more important, and has depended more on search queries than on profiling.

But if the adCenter pilot proves successful, both for marketers and for the search engine’s ad revenues, Google’s past position may undergo a quick revision on the fly. As Danielle Leitch, vice president of marketing and analytics at MoreVisibility, told the SES audience in Chicago, targeting is very common in offline advertising and media buys, and there’s no reason to think that it won’t become as integral to online advertising. “It’s fast and fiercely going to be moving into search,” she said. “MSN is already there, and I think the writing’s on the wall that the other engines are going to catch up very soon. Over the next six to twelve months, I think, these will be options and features that you will be using on a very regular basis in your [search] campaigns.”

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