MSN unveils first paid-search tool

Eyeing a slice of the paid-search advertising market, Microsoft is targeting the new application at small and midsized businesses.

A correction was made to this story. Read below for details.

SINGAPORE--Microsoft has launched its first paid-search advertising application that offers advertisers information on searchers and their search activity, and the frequency at which keywords have been accessed.

According to Eva Balan, MSN's international marketing manager for MSN adCenter, advertisers pay a one-time subscription fee of S$10 (US$5.97) for MSN Keywords. For each keyword, they bid a minimum of S$0.10 and pay for the number of times search users click on their advertisements, which appear as sponsored links alongside search results. The placement of the links will depend on the bid price, click-through rate as well as the types of user profiles captured by the system.

Speaking at a media briefing here Tuesday, Balan noted that the application helps to "level the playing field" for small and medium-sized businesses which may not have budgets for "flashy campaigns". Besides marketing directly to SMBs, Balan said MSN intends to conduct workshops and engage partner organizations to "educate" them.

Advertisers can key in a pre-determined budget in MSN Keywords and initiate marketing campaigns that work around the budgets. They can also view the profile of users who search for particular keywords, and find out how frequently certain keywords have been searched.

Raxit Kagalwala, MSN's director of program management, pointed out that although advertisers currently can only view the age and gender of search users, more profile differentiators will be added in future. One example is the type of industry the user comes from, which Kagalwala noted, would be of interest to B2B (business-to-business) companies.

Online information retrieval is an increasingly popular Internet application, at least in Singapore, according to Balan. Citing statistics from the Infocomm Development Authority of Singapore, she said that the usage rate for online search grew 59 percent in 2002 to 82 percent last year.

Worldwide, the research arm of Piper Jaffray estimated that the paid-search market would grow to US$9.9 billion by 2008, she added.

MSN Keywords is the first tool to be launched on the MSN adCenter announced earlier this year, which was designed to be a one-stop site for customers looking to launch advertising campaigns.

Microsoft's officials said Singapore is the first country in which MSN Keywords was launched. According to Balan, France will roll out the paid-search application next month. French businesses will be required to pay 5 euros (US$6.16) to sign up, with each bid starting from 0.05 euros. A pilot is scheduled to launch in the United States in October.

Correction: This article incorrectly stated the one-time subscription fee for MSN Keywords. The correct amount is S$10 (US$5.97).