Microsoft Injects More Transparency Into Ad Exchange, Stops Short Of Including Audience Targeting

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Esco-StrongMicrosoft is providing more transparency into the inventory on the Microsoft Advertising Exchange.

The inventory on the Exchange was previously sold in a “blind” manner using a masked URL. Ad buyers can now target the inventory by its top-level domain name and sub-domains, the company said Friday.

“We want to give customers a clearer view into our marketplace and we felt it made sense to move our contextual identifier for inventory to a top-level domain structure, where buyers can identify different properties, like MSN US or MSN UK and Skype,” said Esco Strong, Microsoft’s programmatic advertising director.

The additional targeting capability pertains to the desktop inventory on Microsoft’s Exchange. It does not include mobile inventory, although the company will soon announce changes to its mobile marketplace, Strong added.

Additionally, Microsoft does not plan to add other audience-targeting capabilities, such as demographic targeting or behavioral intent, to the Advertising Exchange.

“We’ve received requests to make some of our user data available in our Exchange,” Strong said. “And some of those targeting capabilities are available to our customers through our Programmatic Direct offering … where we feel more comfortable making targetable user data available to our buyers.”

Microsoft limits the targeting opportunities on its Exchange to retain control over the types of ads that are aimed at users.

“On exchanges, you have a number of bidders who are listening to the request, but not necessarily buying the impression from you,” Strong said. “We have a social contract with our users in terms of how we use their data and we only want to allow their data to be targeted when we’re part of the transaction.”

Last week, Microsoft appointed longtime employee Satya Nadella to succeed outgoing CEO Steve Ballmer. While the company’s total revenue increased 14% to $24.5 billion from the same period last year (according to its Q2 2014 report), the company lags behind Facebook and Google in ad revenue. Microsoft pulled in $2.9 billion in global ad revenue in 2013, whereas Facebook and Google earned $6.4 billion and $38.6 billion, respectively, according to eMarketer.

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