As Microsoft tries to round out its advertising offering across multiple platforms, the internet, console games and games portals, among others, it was inevitable that MSN would at some stage try to extend onto the handset and with the purchase of Screen Tonic, that is exactly what it appears to have done. Financial details of the acquisition announced this week were not disclosed.
Screen Tonic is French, has a strong showing of mobile web advertising across Europe and offers management software, and all the usual internet advertising formats, banners, animated banners, links to advertisers mobile sites, video banners and ad words, on handsets.
It even offers non-fast forwarded videos in front of streamed and downloaded video files.
Now that’s all very well if you are gambling that much of the content that arrives at a mobile phone will at some stage, preferably imminently, be delivered over a generalized web interface. If the bulk of advertising on a mobile handset switches from being SMS and web based and instead becomes part and parcel of a broadcast TV service, then perhaps that’s not so good. TV advertising had tended to be dominant in most every country for the past 50 years, why would it not emerge on handsets over the next few years, controlled by the operator, as a hybrid walled garden? Hybrid in the sense that it access is controlled by the cellular operator but the service and advertising is supplied and sold by a broadcaster or a consortium.
At present ScreenTonic says that it markets an inventory of 100 million pages with ads and that it achieves click through rates from 1.5% to 6% on its advertising at present.
Microsoft is clearly adopting a strategy of at least exploring advertising that bypasses the operator, and while that may raise the hackles of some operators, and it may make then even more suspicious than they already are about Microsoft, it will mean gaining a platform access to handsets that are not limited to Windows Mobile handsets, as all the Screen Tonic systems are written in Java.
Of course that doesn’t mean that in the future Microsoft can’t go into the business of writing a software platform for allowing adverts to be delivered by operators, within their walled garden, as well as over the mobile web, and there’s no reason why this wouldn’t be based on Screen Tonic offerings, it’s just that this is not where its current offerings lie.
A recent example of the type of thing that Screen Tonic can do is the Reebok campaign that ran for a month in France when Reebok had signed famous French soccer player Thierry Henry. It works with location-based services to help the customer find the closest store that sells the range that is being advertised. The campaign went across cellular rivals Orange and Vodafone, both French market leaders.
Screen Tonic software is called STAMP and it can target the delivery of the ad in keeping with technical criteria, such as handset capabilities (particularly audio capacities, video, screen size and Java), the portal formats (WAP, XHTML, video, Java, rich media) and the information sent by the portals (bearer, user information and geolocation). It also incorporates the user targeting constraints such as capping (controlling the repetition of ads seen per contact).
In the end what Microsoft has been working towards on its AdCenter advertising systems is a way to reach any demographic on any and multiple platforms, at any time. If people are going to fragment their attention into multiple activities, involving multiple screens, then gone are the days when a national broadcasting footprint will reach everyone in a given country and this is a valuable route to go down.
The fact that Microsoft is perhaps the first online advertising business that has bought into mobile advertising is likely to mean that companies that can do similar things, and we would pinpoint both MobiTV, which has an EPG and advertising delivery software that works with cellular delivered content and broadcast content, and also Action Engine and other on device portals, which include over the top advertising delivery mechanisms, will all be investigated by the other internet majors.
Increasingly MobiTV is beginning to look like a potentially dominant operator delivered video portal, and whoever acquires it will control huge chunks of future mobile video and advertising.
In capturing DoubleClick recently in a $3.1 billion acquisition, Google intensified the war between Microsoft and Google over dominating internet advertising systems, and while TV, newspaper and radio auctioning systems seems to have been the recent focus of attention for Google, the handset cannot be far away from its thinking, and as we know it may soon launch its own advertising driven handset.