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New MSN Service Runs TV Ads Online

Microsoft Corp. is courting television advertisers with a new streaming video service on its recently made-over MSN portal.

Called MSN Video, the service is a free product that lets advertisers run their TV commercials online with little adjustment required. This development comes as broadband penetration online is growing by leaps and bounds.

“For advertisers, it's providing them a better way to improve their ROI, a better way to reach a massive and targeted audience online,” said Karen Redetzki, product manager at MSN, Redmond, WA.

MSN Video is part of a MSN Network makeover that includes a new broadband-enhanced home page with expandable ad space for more advertiser flexibility; support for standardized ad units; and the debut of MSN Premium tools and services for those willing to pay extra.

With MSN Video, advertisers buy 15-second video spots on a scheduled rotation in a model that mimics TV advertising. The spots mingle with MSN Video's high-resolution news, entertainment, sports and assorted programming.

In addition, contextual ads run on the MSN Video on-screen player to help bind the impact of TV with the interactivity of the Internet. So, after each video ad runs, the advertiser's contextual ad remains on the MSN Video on-screen player until the next spot appears.

Revlon ad agency Deutsch Inc., New York, was sufficiently charmed with this advance to recommend this media buy to its client. The cosmetics marketer is running one of the Halle Berry spots selling the Revlon 20 Super-Shiny Shades product.

That spot, repurposed for the Web, is appearing on several areas across the site at www.msn.com, particularly in the entertainment and soft news sections.

“Broadband penetration has gotten to a point where it's pretty substantial,” said Peter Gardiner, partner and chief media officer at Deutsch. “All of a sudden online TV becomes legitimate.”

Indeed, Nielsen//NetRatings reports that 38 percent, or 49.5 million, of all U.S. home Internet users go online through broadband. Such users grew 27 percent in the May-November period. In the same six months, narrowband use stayed flat at 69.6 million.

The growing number of broadband connections is encouraging the use of rich media like on-demand video and Flash-based content in advertising. In November, 17 percent of all online advertising impressions were rich media ads, according to Nielsen//NetRatings. This was a 10 percent rise over November 2002.

The movement is not just online. Starcom, a leading media buying agency nationwide that has helped with MSN Video, is said to have shifted up to 15 percent of its budget from TV to online, according to MSN's Redetzki.

Industry estimates also indicate that 56 million consumers download streaming media content every month. As technology advances, those downloads become easier, especially for offerings like MSN.

“It's a free service for consumers that requires no buffering,” Redetzki said of MSN Video's capabilities.

In return for the free delivery, consumers must grin and bear the spot, as there is no place to click to end its play. But glamour-driven firms like Revlon are willing to overlook any irksome qualities for the value of an improved channel to get its message across.

“They're trying to show they're a leading-edge company,” Gardiner said. “They're finding new ways to market beauty products, and we think this is one of those ways.”

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