MSN and its parent company, Microsoft, announced at its Sixth Annual MSN Strategic Account Summit that it will leap into the paid search market with the introduction of its next generation online advertising platform, the MSN adCenter, and new paid search service to be piloted in Singapore and France, where customer feedback will be monitored over the next six months.
But before the foreign market gets to put their two cents in, it would be interesting to see how MSN’s announcements are being received by others in the online community.
MSN, which only in January launched its own beta search engine after years of relying on Yahoo’s search technology to feed its results pages, attracts more than 380 million worldwide users a month. Still, that places it at a far third in the search engine race behind Google and Yahoo. While the release of its own search engine gave hints that Microsoft was looking to cut a slice out of the booming search industry pie, its most recent announcement solidifies those suspicions.
But while MSN might be ready to immerse itself fully into the search market, is the search industry ready for MSN?
To some it seems like just another business tactic, but the new MSN paid search service promises to pose a real challenge to Google’s and Yahoo’s paid search services. The service will allow advertisers the use of Web analytics tools unlike any currently offered by other paid search services.
Previous to beginning a campaign, advertisers will be able to view information on MSN search users including age, gender, geographic location, time of day and lifestyle characteristics. Surely no one can argue that this data will help advertisers better target their ads to the most qualified buyers.
But while it is obvious that these new features will raise the bar in the paid search industry, some in the online and offline community fear how high that bar will go. Privacy advocates are concerned about the new service, fearing that MSN will go as far as selling users private information to the highest bidder. However, MSN denies such claims, stating that they will only be using aggregate data to fuel their analytics program, not the personal or private information of individual users.
But with MSN offering up the challenge of providing additional, useful information in its search program, some are also concerned that Google, in an effort to compete might also use its desktop search tool to gather information from its users’ personal desktop programs to sell to advertisers further narrowing the threshold between consumer privacy and “personalized marketing.” This just speculation, but with the trend in the current search market it would not be surprising to see it occur in the near future.
For those who have concerns that the search engine market is becoming too crowded, they should have their eyes checked for being way too short-sighted. While the new MSN service might mean that more advertising might appear on more Web pages, the implications for both consumers and advertisers far outweigh the possibility of that slight increased inconvenience.
The search engine market is already at $6 billion and expected to grow to $10 billion by 2008 so the increase in the number of ads pervading computer screens isn’t likely to slow with or without MSN’s entrance into the paid search market. If anything, MSN’s new service will actually help to bring down the prices (at least initially) in what many have argued is an over-inflated paid search industry dominated by Google and Yahoo.
Because of its new offering, MSN will most likely enter the search market with lower prices per click than its competitors, possibly prompting them to lower prices to compete with MSN’s “new” appeal and additional analytics tools. Though this might not be the best change for Google and Yahoo’s paid services, it is good news for advertisers who can better target the market most interested in their products and for searchers who will then have paid search services competing to provide them with the best and most “relevant” paid advertising.
Primarily, the biggest benefit from the new service is that it promises to provide advertisers with the best in paid search technology allowing them to target audience most qualified for their services and products even if it is at the cost of search services relinquishing profits that inefficient targeting has been known to afford them.
Microsoft’s philosophy on paid search is that it should be about forming a real connection with the consumer. For the sake of search marketers and searchers alike, let’s hope that this is as true as it gets in the search marketing industry.