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Microsoft to test new measure of Web ads

NEW YORK (Reuters) - Microsoft Corp said on Monday it would test a new way to measure the effectiveness of Internet advertising in a challenge to an industry standard that has helped the likes of Web search leader Google Inc and Yahoo Inc.

Microsoft Corp. Chairman Bill Gates stands in front of the logo for the new Microsoft operating system Vista during his keynote address at the Consumer Electronics Show in Las Vegas January 4, 2006. Microsoft Corp said on Monday it would test a new way to measure the effectiveness of Internet advertising in a beta program that is due to begin on March 1. REUTERS/Rick Wilking

Microsoft’s “Engagement Mapping” is due to begin in beta form on March 1 and departs from a standard that ties sales, leads and traffic to the last ad that a user clicked on online.

Instead, it attempts to take into account all the Internet interactions that lead a consumer to buy a product and give advertisers a more accurate assessment of how to plan a campaign online.

Microsoft’s new ad initiative follows its purchase of online marketing company aQuantive for $6 billion last year in an effort to capitalize on the fast-growing online ad market and better compete against Google.

The software maker is also in the midst of a $41 billion unsolicited takeover attempt of Yahoo.

“The ‘last ad clicked’ is an outdated and flawed approach because it essentially ignores all prior interactions the consumer has with a marketer’s message,” said Brian McAndrews, senior vice president of the advertiser and publisher solutions unit at Microsoft.

“Our Engagement Mapping approach conveys how each ad exposure -- whether display, rich media or search, seen multiple times on multiple sites and across many channels -- influenced an eventual purchase,” McAndrews said in a statement. He was due to unveil the program later on Monday at an Interactive Advertising Bureau conference.

INITIAL RESULTS

McAndrews, formerly chief executive of aQuantive, has been charged by Microsoft to take greater responsibilities at the company’s loss-making online services unit.

Microsoft advertising clients and partner agencies such as Citi Cards and Initiative Media have signed on for the program. Initial results are expected to be available before the end of the second calendar quarter of 2008.

Worldwide, interactive advertising is expected to grow from $45 billion in 2007 to $147 billion in 2012 and account for 21 percent of total ad budgets by the end of that period, according to a Kelsey Group forecast released on Monday.

Online ad experts said the Microsoft move could improve the accuracy of data on user responses to Web ads, particularly as marketers demand greater accountability on where they spend.

“It’s an argument for a more holistic view of what the consumer is doing and not a simple-minded (view of) ‘what’s the easiest thing to track?’” said Erin Hunter, executive vice president of research firm comScore Inc.

For example, a user could see a car ad on sites they visit and not click on the banner, even though it did make an impression. But several days later, when deciding on what car to buy, they may well do a Google search for the same vehicle and then directly enter a dealer’s site.

“I would encourage any marketing client to take that into consideration, but also to take into consideration the rest of what consumers have been exposed to,” Hunter told Reuters.

On the flip side, a user could have deliberately searched for a product, then began to accumulate information on it through a company site or related blogs.

Microsoft shares rose 0.7 percent to $27.88 on the Nasdaq. Google shares fell 3.1 percent to $491.86.

Reporting by Michele Gershberg; editing by Brian Moss and Dave Zimmerman

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