Microsoft strives for smart ad placement

The Associated Press

Microsoft Corp.'s online advertising researchers will spend this year teaching computers to be smart about sticking ads into video clips, and to be even smarter about targeting ads to specific Web surfers.

Microsoft showed off a handful of early-stage advertising projects at its headquarters Tuesday that may or may not turn up as part of the company's Web ad platform.

The demonstrations come just days after Microsoft's $44.6-billion bid for Yahoo Inc., which, if successful, would boost the software maker's Web traffic and online ad revenue.

With its 2006 acquisition of AQuantive, the software maker gained a broader network of websites on which to sell ads, and tools to help marketers buy them.

A few of Microsoft's projects were aimed at helping advertisers better reach their ideal customers online, particularly using search keywords.

The company showed a dashboard that advertisers could use to forecast the success of certain keyword advertising campaigns and a system it says would make it easier for advertisers to think about key ideas, rather than hundreds of individual keywords.

But most of the adCenter Labs prototypes had little to do with searching.

"Search itself gets a lot of attention because of Google," said Tarek Najm, a technical fellow at Microsoft. "Advertising in search, as a result, gets a lot of attention."

Najm said spending on search keyword ads would be dwarfed by what marketers spent on other types of online advertising, such as placement based on "audience intelligence" -- figuring out what kind of person the Web user is, based on surfing and searching habits -- and display ads including video.

Microsoft, along with Google Inc. and other competitors, is also hard at work on new ways for companies to advertise their brands to Web surfers watching video clips.

One examined a clip to look for the most appropriate stretch of time and spot on the screen for an advertiser's "bug," or logo. For example, if a car company wanted to show its logo for 10 seconds in the bottom-right corner of the screen, the computer program would find the 10 seconds in which the logo would interfere least with the video's action.

Another used speech recognition to make a transcript of a video, then served up ads -- in the demonstration, they were text links -- alongside the video. As the topics discussed on screen changed, so did the ads.

The third program scanned a video for surfaces where ads or product images could be inserted later. The demo showed how the same frames could display a Coke ad one moment and a Pepsi ad the next, without having to reshoot the video.

Other experiments included an interactive shopping kiosk that used elements of Microsoft Surface, a next-generation touch screen, to show ads and coupons, and a computer program that helped marketers avoid inadvertently putting their brand on a Web page with distasteful content.

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