February 11, 2008

Microsoft Ads Dynamic Product Placement

Here's some market news we've been eagerly awaiting. On Tuesday, Microsoft's adCenter Labs showed off a handful of early-stage advertising projects at its Richmond headquarters, which included their Dynamic Product Placement ad prototype.

Microsoft algorithms can pinpoint placement opportunities within completed videos to enable advertisers to insert a digital image of their product, service or logo into the video content (the same kind of technology to be deployed in our marketplace to enable content producers to monetise their video content into allotments).

The demonstrations come just days after Microsoft's $44.6 billion bid for Yahoo Inc., which, if successful, will boost the software maker's Web traffic and online video ad revenue.

Microsoft — along with Google and other competitors — are all hard at work on new ways for companies to advertise their brands in online video content. In some ways, the move counters that of Google's mid 2007 launch of its InVideo Ads. Then again, Microsoft doesn't own YouTube. But if the Microsoft-Yahoo! deal does go ahead an MSN-Yahoo! network could prove a heavy hitter.

Ad network scale of this type will be all important for Microsoft if broadband video advertising is to become a core part of the overall marketing mix for big name brands. Microsoft knows that to tap the long-term broadband ad opportunity in branded video advertising, it must offer advertisers greater reach, along with interactivity.

In-video advertising, a combination of digital product placement combined with hypervideo or clickable video can achieve what broadcast television just can't do. At least not yet.

JupiterResearch, which predicts online video advertising in the U.S. will reach $768 million in 2008 also said recently that there is now latent demand emerging among early adopters for full-length, ad-supported television shows online.

While consumption of full-length TV shows has been limited in past years, the genre may finally be ready for Internet prime time during the 2008 television season.

Stick around. It's going to be fun.

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