Microsoft Buys Navic for TV Push

Shaking off the sting of its collapsed deal with Yahoo!, Microsoft bought addressable TV player Navic Networks in a deal that will extend its ad platform to television.

Cambridge, Mass.-based Navic works with top cable companies to provide targeted TV advertising with a nascent ad network called Admira. It works with cable companies like Time Warner Cable, Cox Communications and Charter. Dish Network also uses its technology. Its technology is used to run ad campaigns targeted to viewer groups, and also offers interactive features like the ability to click through for long-form content.

“We’re clearly making a commitment to emerging media,” Brian McAndrews, svp of advertiser and publisher solutions at Microsoft, said in an interview here. “In the long run, we want to be a platform across all media.”

McAndrews painted the move as a way to “accelerate” Microsoft’s efforts to build a wide-ranging ad platform that would allow advertisers to place, target and track ads on the Web, mobile, in video games and now TV. It has added capabilities through acquisition, such as the 2006 purchase of video game ad network Massive and the 2007 buy of mobile ad network Screentonic.

Buying Navic is also a way to keep pace with Google, which is making a push to enter the estimated $80 billion TV ad market. McAndrews said Navic differs from Google’s approach by working directly with cable companies versus satellite services, allowing greater targeting and not forcing broadcasters to use an auction. Project Canoe, which recently recruited Aegis Media Americas CEO David Verklin to head it, is attempting to bring ad targeting to TV through a consortium of cable companies.

In the next three to five years, TV advertising will get greater targeting, measurability and accountability, McAndrews said. That would include ad networks, which have risen to play a key role online. Eventually, broadcasters will rely on ad networks, such as Microsoft’s DrivePM, to backfill ad slots they don’t sell through their own sales force.

“Our ultimate goal is to take the things you can do on the Internet, including targeting and accountability, to television,” McAndrews said. “We see TV looking a lot like the Internet.

McAndrews said Microsoft has moved on from its failed bid to buy Yahoo!, which last week struck a deal for Google to sell some of the search ads on its site and through its ad network. The agreement means “less choice and less innovation, and it’s not a good thing for consumers,” he said. He also predicted the deal would attract the scrutiny of regulators because of Google’s dominance of the search market.

“Yahoo! was not a strategy,” he said. “It was an acceleration of a strategy. We will continue to execute on the same strategy.”

A key part of that strategy is building the scale critical to compete with Google in search. McAndrews said Microsoft is a “leader” in display advertising, but admitted it lagged far behind Google in search. To help close the gap, Microsoft said next year it would open a search technology center in Europe to complement one it already has in China. The goal: produce search innovations that differentiate Microsoft from Google.

Last month, it introduced Cashback, a cost per acquisition search model that gives rebates to searchers. McAndrews said Microsoft would continue to experiment with new search and ad methods, while also striving to establish a better brand. Microsoft has done a poor job at settling on a single search identity in the past, McAndrews admitted. It has used MSN Search and Live Search at different times.

“We want to make it clear to people what our search brand is and take away that confusion,” he said.