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Microsoft Denies Threat to Rich Media Firms

Microsoft Corp. insists existing rich media banner firms have nothing to fear from the software giant’s plan to give away its own rich banner code online. And apparently, the established firms agree.

What’s more, an executive at Excite@Home – whose Enliven unit has been a pioneer in ads with 3-D graphics, sound and transactional capability – indicated that the Redwood City, CA, company might work hand-in-hand with Microsoft to promote banner technology.

Microsoft, Redmond, WA, first let out word that it planned to move into the rich media space at the New York Jupiter Online Advertising Forum in August. It plans an official launch of its enRiched Ad Program Oct. 1. The company will use the Web to post free code for building rich media banners – interactive online ads that boast significantly higher click-through rates than gif-based banners and currently make up about 10 percent of the ads on the Web.

In addition to being compatible with MSN-branded and managed properties, such as auto-buying service CarPoint and news portal MSNBC, the code will be designed to run banners elsewhere on the Net and will function on both Internet Explorer and Netscape browsers of level 4.0 and above. The code will include directions on where banner designers can insert more complicated functions such as tracking mouse clicks.

Michael Hurt, lead program manager for the MSN Ad Technology Group, said consumers and existing rich media firms Enliven, Thinking Media Corp., New York, and Unicast Inc., New York, need not fear ulterior motives from the technology giant.

“The big question [people] are saying is, ‘OK. It’s Microsoft. You guys are the evil empire. What’s the catch here?’ ” Hurt said. “This whole giving away the code thing, we’re not after royalties. It’s not going to reconfigure their platforms to run Internet Explorer.”

To the contrary, Microsoft designed the code because of problems it was having with the rich media some marketers submitted to run on MSN sites. Hurt said the company often was wasting time debugging banners designed by outside firms, and it wanted to build a standard template that it knows will operate smoothly across its network.

Some agencies and advertisers that have come to MSN touting themselves as rich media experts have later confessed, for example, that “their testing for the Macintosh platform was going to Kinko’s Copies for an hour” and looking at the banners on computers there, Hurt said.

“So we felt if we can just … create these things that advertisers can plug and play with for free … that would maybe help their return on investment for doing advertising with us,” the executive said. He added that, after all, no one understands Microsoft’s systems as well as Microsoft.

For their part, the rich media companies spoken to by DM News said they aren’t concerned about possibly competing with the deep-pocketed technology leviathan.

Microsoft’s offering might help introduce marketers and advertisers to rich media, said Scott Kliger, vice president of ad technology for Excite@Home. Kliger encourages Microsoft’s presence in the arena and suggested the two companies might cooperate in an educational role.

“I would actually expect us to do that together rather than independently,” he said. “[We’re] two of the major players in the industry. It is in everyone’s best interest to … give Internet advertisers the results that they’re looking for. And we all know the gifs out there aren’t doing it.” Kliger said he could not elaborate on any plans at this time.

He said banner marketers that want a higher level of interactivity or more advanced measurement, tracking and reporting likely will continue working with established rich media firms. MSN will appeal to advertisers that don’t demand as many advanced functions, he said.

“What you’re seeing here from Microsoft is yet another solution that addresses yet another niche within the market,” Kliger said.

Don Westrich, director of business development at Thinking Media, New York, said he was in the room when a Microsoft executive first mentioned the company’s plans at the Jupiter conference.

“What they’re doing with templates is just not a big deal,” Westrich said. “There’s more to rich media than simple solutions.” The real issue, he said, is offering advertisers a sophisticated banner platform that lets them use marketing tactics and creativity that appeal to consumers.

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