MSN UK commits to 15% search commission rate

by James Livesley, Media Week 30-May-06

MSN UK, Microsoft's network which is about to enter the paid-for search market, has committed to an agency commission rate of 15%, in contrast to competitors Google and Yahoo!.

The business has decided on a tiered system for its search commission
structure, with 15% as the maximum. However, a spokesman for MSN said he
"expected the majority of agencies to make that level".

In January, Google caused controversy by scrapping its 15% agency

commission rate in favour of Best Practice Funding, which takes the form
of a quarterly financial reward based on billing. Yahoo! Search
Marketing followed suit in April, when it dropped commission from 15% to
10% to agencies spending more than £80,000 per month and 5% to
those spending more than £20,000. Below that, no commission will
be paid.

MSN is testing its paid-for search through Microsoft adCenter, the
long-awaited advertising-funded search engine for Windows Live, MSN and
other Microsoft online services, set to launch in the UK in June. It is
designed to provide advertisers with a one-stop shop for buying search,
contextual or display ads across Microsoft properties and rival both
Google and Yahoo! search offer.

Matt Simpson, head of digital at Starcom Digital, said of the 15%
commission structure: "I think it is the correct model. MSN is doing the
right thing and recognising they can make significant inroads. "

Ed Ling, strategic development director at I-Level, added: "I think they
are aware of the Google situation and are trying not to fall foul of
that."