Microsoft Plots Programmatic Global Expansion, Promotes 'Direct Programmatic' Portal Agreement

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Daniel Sheinberg, senior director of display marketplaces at MicrosoftMicrosoft is hoping to gain more traction with higher priced, direct sales inventory on its network by striking an agreement with its fellow portals, AOL and Yahoo, to support technical specifications for automating the buying process around reserved ad sales.

In other words, Microsoft is joining the push toward "premium programmatic" that AOL trumpeted Monday night at its "programmatic upfront" event. During the lavish event, complete with rooftop party on the west side of New York, AOL touted commitments to use programmatic channels for guaranteed inventory by marketers such as LG and Hyatt Hotels, and with five of the six major ad holding companies. (WPP's GroupM is the main hold out, but AOL executives expressed hope for bringing them into the fold, eventually).

Still, Daniel Sheinberg, senior director of display marketplaces at Microsoft, emphasized that the three companies will be doing business independently and will not be combining "premium" inventory via programmatic methods.

"We'd been talking since the spring about our respective efforts around 'premium' programmatic and we wanted to see if the three of us could introduce a standard that the industry could coalesce around," Sheinberg said. "In order to get any traction for the idea that programmatic isn't just about remnant or real-time bidding in the marketplace, it's going to have to be an adjustment by the ecosystem and that's where we're all in agreement."

Microsoft, AOL and Yahoo will adhere to a common set of API specifications for direct programmatic ad sales so that buyers won't have to adjust their technologies when trying to access the portals' respective inventory through automated processes. The three expect to continue to revise the guaranteed programmatic sales specs over time, Sheinberg added, noting that Yieldex, iSocket and MediaMath are participating with the trio on what can best be described as a work in progress.

Secondly, it has nothing to do with the alliance the three initiated two years ago that involved the shared selling of each other’s  non-reserved display inventory. While not much has been said about that pact, Sheinberg said that it is still alive and relevant.

"That agreement to leverage each other's remnant inventory through programmatic is very much in place and serves a very different purpose from the one we've just started around direct sales APIs," Sheinberg said. "The earlier project with AOL and Yahoo is about driving scale in our network offerings. It's been successful and we see it continuing."

This new alignment with AOL and Yahoo comes several months after Microsoft sold its ad serving platform Atlas to Facebook. At the time, the thinking was that Microsoft was getting out of the ad tech business after trying to go head to head with Google following the search giant's purchase of DoubleClick in 2007. But Sheinberg said that Microsoft Advertising is forming big plans to build out its AppNexus-powered exchange globally -- it's currently operating in 16 markets around the world -- and across devices.

"Over the next year, we'll be expanding to different markets and ad formats," he said, though he noted that nothing specific has been put in place. Sheinberg also declined to say what amount of programmatic volume goes through the network on monthly basis. "If you think about Microsoft's portfolio of ad offerings, we have just launched Skype on the exchange, and we're working to see what we can do with Xbox and the Windows App Inventory. But at the moment, the focus is on driving more quality inventory. And this is a first step."

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