• by Ross Fadner , August 18, 2004

Without the usual PR fanfare that typically surrounds an advertising product launch from a major Internet service provider, MSN this week quietly stepped its MSN Video product out of beta and onto the market for the consideration of prospective broadband video advertisers.

Now officially called MSN Video 2, the broadband video advertising platform became available "for general sale to a broader set of clients late last week," according to Eric Hadley, director of marketing and advertising for MSN. He said advertiser demand has been considerable, and there is now "substantially more inventory available."

Currently, most of MSN's video content is available at the MSN Video section of MSN.com, but other media categories like MSN Entertainment, Fox Sports, MSN Autos, and MSN Money are adopting the MSN Video Player. "The idea is to sell [MSN Video] across the entire network," Hadley said, noting that MSN wanted to provide its advertisers with a contextually relevant video platform.

Hadley said that ads on MSN Video 2 will appear "somewhat like TV ads," except that only one 15 or 30 second video ad will appear for each piece of content. Hadley added that while consumers don't necessarily need a broadband connection to view MSN video, the video capabilities are limited for narrowband users.

MSN began testing the advertising-supported streaming video service about 10 months ago. To date, video providers have included media partner NBC, the Discovery Channel, The Weather Channel, The Food Channel, Showtime, and most recently, Fox Sports and Major League Baseball. Its advertising partners have thus far included Procter & Gamble, Revlon, Gateway, and Discover Card, among others.

MSN has opted to keep the lid on MSN Video 2 thus far because it plans to feature the new service when it pitches its Fall advertising package in several weeks. Hadley said several "new interesting features" will be announced at that time for MSN Video, as well as additional advertising partners. The MSN ad package will encompass a seven-city road show, in which the company will unveil new ad products for its search, content, and video services.

In the past, online video has been a tough sell for many major Internet companies, but some say this is because failed services like Yahoo! Platinum launched before the broadband market was as strong as it is today. According to Wednesday's Nielsen//NetRatings data, broadband penetration in July finally surpassed that of narrowband, with 63 million--51 percent of online Americans--accessing the Internet through broadband versus 61.3 million via narrowband.

MSN developed the first version of MSN Video in collaboration with Starcom MediaVest Group (SMG) and MSNBC.com. SMG, one of the world's largest brand communications groups, helped develop the media-buying components of MSN Video.

"MSN came to us with a great concept and high motivation to make it real," stated Rishad Tobaccowala, president of SMG's Internet practice. "Our objective was to help shape the next generation of advertising-supported video delivery, as well as get immediate traction in the marketplace." He added that "advertisers can't afford to be cut off from the growing number of consumers who now spend less time in front of the TV and more time online via broadband."