Beginning this week, customers of the Microsoft Advertising Exchange will have a clearer view into the inventory available in our marketplace. I want to share some thoughts on this exciting step forward.
When Microsoft first launched our Ad Exchange, the RTB space was still relatively new and programmatic sales were largely unchartered territory for most premium publishers. We faced several key questions as we packaged and priced our inventory: how would our inventory be valued in an auction environment? What approach would minimize the risk of channel conflict? How should we balance roles between direct and indirect sales channels? As a result, we took a conservative approach to the merchandizing of our inventory on the exchange, surfacing it in a blind manner using a masked URL or ‘bin.’
The last couple of years have afforded us a great deal of feedback from our partners and the marketplace itself, allowing us to test, analyze, and finally iterate on our business. We’ve studied the impacts that RTB has had on our other sales channels and overall advertising business, and ran tests on key properties in several European markets using unmasked URLs to identify our inventory to RTB buyers. Naturally, we found that we captured greater revenue for our inventory in the exchange when revealing this additional information to bidders. But we also found that we didn’t see any negative long-term impacts to monetization in our other sales channels, and that RTB demand was largely incremental and complementary to direct sales. This provided a clear signal around the opportunity to increase transparency with little additional risk of channel conflict.
As a result, today our MSN and Skype properties are no longer masked, and are now targetable in the Microsoft Ad Exchange by top-level domain (msn.com and skype.com respectively). MSN properties are distinguishable by market with sub-domains (e.g. uk.msn.com).
Examples of Greater Transparency
We’re thrilled to evolve our approach because it’s a shared win for marketers and publishers. For buyers in the Microsoft Ad Exchange, finding and targeting Microsoft inventory will be easier than ever and will allow them to target more specific and high-quality contextual audiences as identified by property. White/black-listing will be possible, and bid optimization will be more efficient due to greater inventory granularity for tuning algorithms. For publishers, this is a step toward greater transparency in exchanges that can be taken with confidence in knowing that the increased revenues via RTB don’t come at the expense of direct sales or long-term holistic yield.
This improved transparency is just one example of the continued momentum against our programmatic advertising offerings that we’re pleased to bring to market for our partners. By the end of this quarter, we will have doubled our global geographic footprint over the previous year and brought back Outlook.com inventory to the Microsoft Advertising Exchange. And the coming year will bring even further exciting developments that I can’t wait to share.
Here’s to greater clarity and simplicity!
Director, Programmatic Advertising