Digital Essays: All roads lead to one

films, playing video games, listening to internet radio, downloading
music and video quickly and cost-effectively; today's internet world is
one of limitless possibilities, with the consumer firmly in control.

The internet has become part of people's daily lives both at work and at
home, not only as a source of information and entertainment but also as
a primary means of communication.

In the media world, the advent of broadband and the resulting
availability of richer and more engaging online experiences are driving
shifts in media consumption. Jupiter Research published findings in
early 2006 that state Americans are now spending as much time online as
watching TV, while recent European Interactive Advertising Association
figures reveal that the internet is Europeans' most preferred medium
throughout the day.

Traditional media owners are realising online media assets are at least
as profitable as traditional channels. Most people are probably familiar
with Rupert Murdoch's recent comments. He said "After the dotcom bubble
burst in 2000, I thought the digital revolution would just limp away.
Well, it hasn't and it won't. It's a reality we had better get used to -
and fast."

Driven by these changes in the software and media worlds, we are
experiencing a rapid revolution in the advertising industry. The change
we are experiencing isn't new. But the speed of the change is: we are on
the brink of the most dramatic shift in advertising patterns since the
introduction of colour TV in the 60s.

Advertisers and their agencies are being forced to review their business
strategies as consumption of online media continues to surpass that of
traditional media. Furthermore, internet users have evolved beyond
simply passively consuming information. People now enjoy more autonomy
online, actively seeking out information and entertainment for
themselves. For example, our blogging service, MSN Spaces, has exploded
from zero to more than 40 million MSN Spaces since its launch in
December 2004.

As the software world and media world have converged online, it's
unsurprising the internet has become the centre of people's digital
lives. Similarly, we're putting the internet at the centre of our
business strategy to enable advertisers to take advantage of these
shifting consumer patterns.

Windows Live will bring all the elements of the consumer's digital life
together seamlessly in one place, accessible at any time, anywhere and
from any device, extending Microsoft's online audience beyond search and
MSN to the delivery of software and services over the web.

With the launch of Microsoft adCenter, we're also expanding our
portfolio of advertising properties in the digital space, giving
advertisers new opportunities to connect with consumers as never
before.

The focus of successful search marketing is about to undergo a subtle
but significant shift - from clicks to conversions. This will allow
advertisers to enjoy lower costs per sale while enjoying a higher return
on investment.

A high level of traffic is still desirable, but clicks have a cost. By
converting more clicks into customers, marketing directors will be able
to manage the effectiveness of their budgets with more precision than
ever before.

At the same time, targeting is becoming a key weapon for advertisers as
consumers demand an intelligent, relevant online experience. Microsoft
adCenter allows advertisers to target their audience by day of the week,
time of day, country and city, and also increase their bids by age,
gender and geography, thus increasing the probability of their ads being
seen by the desired audience. When this is combined with detailed
reporting, the advertiser will have a comprehensive package of in-depth
data that will allow them to maximise their return on investment and
make confident decisions about refining their campaigns.

Advertisers will know who is clicking on their keywords, by age, gender,
location and time of day.

Consumers will be more likely to convert, as they are being offered
products that are highly relevant to them, at a convenient time. For
example, adCenter has the ability to target men aged 36 to 50 in
Manchester who are searching on a Friday between 11am and 2pm, or women
aged between 51 and 65 in Southampton who are most likely to purchase
goods online at weekends, thus enabling advertisers' investment to work
a lot harder for them. It's a virtuous circle, ensuring advertisers and
consumers can interact more cost-effectively.

Notably, we're researching the power of combining display and search
advertising to drive both direct response and brand metrics. This
"better together" story promises to bring more impact for advertisers in
the battle to interest and engage online.

As the Microsoft media network expands, advertisers will also be able to
take advantage of new and innovative advertising opportunities through a
broad range of Microsoft products and services such as Xbox Live, Office
Live and Microsoft.com.

Now the software world and the media world have converged online, we
think Microsoft is uniquely positioned to lead the way as an innovative
online media owner. The launch of Windows Live is creating exciting
opportunities in the online advertising space and offers brands the
chance to shape the future of marketing in the evolving media
landscape.

- Chris Ward is the commercial director of MSN UK.