ASq: Microsoft, Yahoo Let Users Choose Ads

Aug 9th, 2010 | By businessnews | Category: Business


To make online marketing messages less annoying and more lucrative, Web companies are asking Internet surfers to pick the ads they will view

By
Kristen Schweizer

Microsoft (MSFT), Yahoo! (YHOO), and Hulu plan to make online advertisements less annoying and more profitable by letting users select which ones they’ll watch.

Starting next month, websites that include MSNBC.com, Yahoo.com, and Hulu.com will begin letting consumers decide which ads show up in video clips they view online.

A research study of the new Hulu-designed format led by Vivaki, the digital arm of French advertising company Publicis Group, showed that users are twice as likely to click an ad when given a choice, as opposed to when one is selected for them. “When you give people a choice, they tend to love you because you’re showing them respect,” says Beth Uyenco Shatto, global research director at Microsoft’s ads unit. “If it wasn’t for advertising, they wouldn’t be getting the content for free.”

The new ad-selecting tool is called ASq and may step up development of the $3.1 billion global video ads market, already online advertising’s fastest-growing segment. While it may not end unwelcome commercials for car insurance or weight-loss pills, it may help websites command higher rates while letting marketers attract more eyeballs and improve consumer targeting.

a boom in global online video ads

CBS.com (CBS), AOL.com (AOL), and Discovery.com (DISCA) plan to start using ASq in September. Google’s (GOOG) YouTube is studying it. The new offering would let viewers of an online video choose from three or more ads instead of imposing a pre-roll clip. Yahoo and Hulu plan to use it, as does Microsoft’s MSNBC.com, which features segments from the Today show, NBC Nightly News and Meet the Press. “We’re getting smarter about what makes more impactful advertising,” says Uyenco Shatto. “The big ‘aha’ here is understanding what makes a viewer choose a particular ad.”

Online advertising is expected to rise 12 percent this year, to $61.8 billion worldwide, from $55.2 billion in 2009, according to New York-based researcher eMarketer. Although text ads on search pages such as Google or Microsoft’s Bing remain the dominant form of online advertising, video ads are growing fast, eMarketer says. According to IDC, global online video ad spending, which was $2.2 billion in 2009, will expand to $11.3 billion in 2014. YouTube, which has more than 1 billion views a day, says the company is “doubling” its efforts to get more viewers for its video ads. “We are always looking to develop new formats and features that make them more interactive,” the company says.

While online ads may be resented as disruptive, they foot the bill for much of the Internet’s content. They are expected to get better at targeting individual consumers. “Online is much more individualist than television so targeting is extremely important and effective,” says Dean Donaldson, director of media experience at MediaMind Technologies, maker of software for digital ad campaigns. “People do like advertising if it’s fun and engaging and that’s done by speaking to each user,” he said.

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