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Microsoft adCenter, (formerly MSN adCenter), is the division of the Microsoft Network (MSN) responsible for MSN's advertising services. Microsoft adCenter currently provides pay per click advertisements.
History Microsoft was the last of the "Big Three" search engines (Microsoft, Google and Yahoo!) to develop its own system for delivering pay per click (PPC) ads. Until the beginning of 2006, all of the ads displayed on the MSN search engine were supplied by Overture (and later Yahoo!). MSN collected a portion of the ad revenue in return for displaying Yahoo!'s ads on its search engine. As search marketing grew, Microsoft began developing its own system, Microsoft adCenter, for selling PPC advertisements directly to advertisers. As the system was phased in, MSN search showed Yahoo! and Microsoft adCenter advertising in its search results. As of June 2006, the contract between Yahoo! and Microsoft has expired and Microsoft is displaying only ads from adCenter. The Technology Similarly to Google AdWords, Microsoft adCenter uses both the maximum amount an advertiser is willing to pay per click (PPC) on their ad and the advertisement's click-through rate (CTR) to determine how frequently an advertisement is shown. This system encourages advertisers to write effective ads and to advertise only on searches which are relevant to their advertisement. Additionally, this system maximizes Microsoft's revenue. To see why, consider two advertisers. One advertiser is willing to pay $1 for every click on his ad, which is clicked on by 5% of those who view it. Another is willing to pay $2 for each click on his ad; however, that ad is only clicked on by 2% of those who view it. Over 1000 views, the first ad would generate $50 for Microsoft, while the second would generate only $40. Even though the second advertiser is willing to pay more than the first advertiser for each click, the first advertiser's ad would be preferred by Microsoft's system. Microsoft adCenter allows advertisers to target their ads by restricting their ads to a given set of demographics and by increasing their bids whenever the ad is seen by a user of a certain demographic. As of September 2006, no other PPC advertising system has a similar feature. Similarly, adCenter allows advertisers to run their ads on specific days of the week or certain times of day. Sources Competition | ||||||||
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