Microsoft and Google are Re-Inventing Web Advertising

Implications: Microsoft, like Google via Doubleclick, is busy "reinventing and rethinking the whole business model of online advertising..." (Steve Ballmer) Yes, MSFT, is chasing GOOG as it races toward opening up new, performance-based media and ad cost models but MSFT too is looking to re-define ad models in a radically different way. Web advertisers are anxious to tie ALL prior user click and impression activity to an end "action" taken by consumers -- a new, more cost-effective kind of direct response marketing that has serious appeal.

Analysis: Microsoft, is busy "reinventing and rethinking the whole business model of online advertising" according to Steve Ballmer himself.

Yes, MSFT, is chasing GOOG as it races toward opening up new, performance-based media and ad cost models (i.e. it's rather knee-jerk OpenSocial announcement) but MSFT is also looking to re-define ad models in a radically different way.  How?  By suggesting that advertisers pay on a performance basis -- performance of another sort and not just a single click (a la the cost-per-click model that runs AdSense/AdWords).

[Microsoft’s Brian] McAndrews contends that search engines, which long have claimed credit for sending people to companies’ Web sites, do not deserve it all (via NYT.com).

What's the secret sauce/new model?  Web advertisers are anxious to tie ALL prior user click and impression activity to an end "action" taken by consumers.  Hence, a new, more cost-effective kind of direct response marketing that has serious appeal is born via MSFT.

Says MediaPost's Joe Marchese, "The goal is simple, and amazingly intuitive to anyone in the ad industry: All Microsoft has to do is prove the value of all other marketing messages delivered prior to the action of searching. This is the No. 1 reason Microsoft bought aQuantive."

He continues, "If Microsoft figures out the more efficient way to assess the value of non-performance-marketing message delivery, Microsoft can then deliver higher value to marketers, while simultaneously delivering higher monetization to quality Web sites. Combining these two things would theoretically allow Microsoft to catapult past Google in the race to unlock brand dollars."

Read more here on how GOOG is re-defining advertising currency by creating the platform for an Attention Economy.