Microsoft Makes Major Shift Into Ad Exchange Business

Microsoft has finally taken a major step into the burgeoning ad exchange space—a space where rival Google has a head start.
The software giant has opened Microsoft Advertising Exchange for business in the U.S. market, and that remnant inventory from its properties MSN and Windows Live will be traded via the new platform (Windows Live right away and MSN in the coming weeks).
Microsoft’s exchange is built in conjunction with AppNexus, a demand-side technology platform (or DSP) built to facilitate real-time ad buying—i.e., the increasingly popular practice of automated online ad buying—a practice that promises advertisers the ability to target ads on a user-by-user basis with very little waste.
Microsoft originally jumped into the ad exchange arena when it purchased the company AdECN in 2007. But that exchange venture never really got off the ground, and Microsoft eventually moved to partner with AppNexus, a startup, which Microsoft has provided $50 million in funding.
Meanwhile, over the past few years, Google has built out its own DoubleClick Ad Exchange, which the vast majority of major ad agencies use to purchase online inventory. To help it catch up, Microsoft is touting its exchange as offering better transparency and control for advertisers and better pricing for publishers.
“Our superior adjacency controls will help demand partners find their audiences better than ever before and provide greater flexibility to meet marketing goals and create more effective campaigns,” wrote Rik van der Kooi, Microsoft’s head of Advertiser and Publisher Solutions in a blog post on Wednesday (March 30). “As one of the largest premium publishers on the Web today, we have a unique perspective in understanding both the opportunity and the delicate balance publishers need to maintain between the safety of their brand and sales channel conflicts.”