Microsoft Brings Ad Component to Mediaroom IPTV

Helping Telcos Capture New Revenue

Microsoft Corp. (MSFT) TV’s creation of an advertising adjunct to its Mediaroom software platform could be the answer to the revenue needs of telco TV providers who desperately need to make money from more than service subscriptions, equipment rentals and pay VoD movies.

Cablecos have long sold ads and raked in hundreds of millions of dollars a year in the process. By contrast, telcos primarily have passed on national ads they didn’t sell, along with the content they aggregate. Clearly, telcos would love additional revenue sources such as advertising, but have lacked the systems required.

Microsoft saw this problem coming for telco TV, so it has spent more than $6 billion on two acquisitions that helped it create the robust Mediaroom Advertising Platform (MRAP), which it demonstrated at the annual International Broadcasting Convention (IBC) earlier this month in Amsterdam. The MRAP is a middleware adjunct that will enable Mediaroom customers to open a new revenue stream by providing their own advertising across linear TV, VoD and electronic program guides.

However, the gray lining on the silver cloud is that the package won’t be commercially available until around mid-2009. But that may give telcos time to start learning about TV advertising. While some understand the opportunity, others likely need a crash course in topics such as ad insertion, audience measurement and analysis, campaign management and inventory management.

“We’re going to invest heavily in working with a few large Mediaroom customers that can be MRAP champions that others can look at and learn from,” explained Terri Richardson, group marketing manager for Microsoft TV.

The creation of the MRAP was driven largely by two Microsoft acquisitions. The first was the $6 billion buy of aQuantive Inc. in May of last year, followed this past June by the purchase of Navic Networks.

“For Microsoft, the MRAP platform brings together all the assets they have acquired via Atlas, eQuantive, Moved Networks and Navic Networks, to give service providers a means to offer potential advertisers a complete campaign approach, with ads delivered on the Web, on mobile devices, in games, and on TV,” said Jeff Heynen, directing analyst for IPTV and Next Gen OSS/BSS at Infonetics Research.

Heynen believes the ad platform and Mediaroom will be a way to counter Google’s strength in the online ad business. “By telling advertisers they can effectively target TV advertisers, and then continue that campaign on the Web and mobile devices, with measurable results and statistics, they give advertisers a pretty powerful tool and a growing worldwide subscriber base among the world’s largest telcos,” explained Heynen.

Microsoft’s Richardson said Mediaroom customers will need to upgrade their package to gain access to the advertising platform, once it’s available.

Share this article: Email, Slashdot, Digg, Del.icio.us, Yahoo!MyWeb, Windows Live Favorites, Furl
Add this article feed to: RSS, My Yahoo, Newsgator, Bloglines