Microsoft and OpenX to Swap Referrals. Whither Atlas?

Microsoft hopes a new business referral agreement with OpenX Technologies will bring considerable inventory to its Content Ads contextual ad network.

Under a multi-year agreement between the firms, Microsoft will refer publishers in search of ad serving solutions to OpenX, which will enjoy “preferred partner” status. In return, OpenX will refer its publisher customers to Microsoft’s Content Ads contextual ad network and other ad products. Microsoft will enjoy more exposure on OpenX’s plug-in menu than other contextual ad offerings enjoy, suggested CEO Tim Cadogan.

Most striking about the deal is what it says about Microsoft’s commitment — or lack thereof — to its own ad management products. The company’s Atlas Publisher Solutions (APS) includes a number of mature product offerings, such as AdManager, its flagship ad management platform; DealManager, a capability media sellers can use to respond to advertiser RFPs; and Inventory Manager, an inventory forecasting tool.

While Microsoft does not intend to abandon its APS products, it is willing to de-emphasize those products if it helps the company capture more ad inventory.

Scott Howe, corporate VP of Advertiser and Publisher Solutions, told ClickZ today the bulk of referrals Microsoft sends to OpenX will be mid- and long-tail publishers. But he said the referral pact would not be limited to small publishers.

“Historically we have been a little more focused on the head and torso,” Howe said. “OpenX, by having 150,000 [Web sites], almost by definition is going to have a whole lot of small niche content publishers. But even with big publishers, OpenX should be an option for them.”

Howe argued Microsoft embraced channel partnerships, allowing others to sell its technologies and vice versa.

“We’ve always looked at the tools business as a means to an end,” he said. “It’s a good set of offerings for publishers, but it also allows those publishers to be more acquainted with the broader technology stack.”

At present Microsoft has more riding on its monetization engine — including its Content Ads contextual network — than it does on its publisher tools. How that priority imbalance affects the company’s long-term investment in Atlas Publisher Solutions remains to be seen.

“We need to be good at a lot of things to deliver this holy grail of advertising,” said Howe. “Yet we need to temper that with realization that if you try to do everything, generally you do everything poorly.”

The agreement follows a successful trial Microsoft and OpenX began a year ago, when OpenX invited its publishers to test the contextual ad product.