Blog Post

Microsoft Completes AppNexus Integration, Begins International Rollout

As Microsoft (NSDQ: MSFT) kicks off its “marketing leadership summit” the company has some good news and some not so good news: AdAge is reporting that Mich Mathews, a two-decade veteran of the company, is preparing to leave this summer. Separately, Microsoft execs offered details about the complete integration between the Microsoft Advertising Exchange real-time bidding platform AppNexus, which include an international rollout, the inclusion of remnant inventory from MSN and outside publishers as well.

Microsoft and AppNexus have been working together for the better part of a year. While Microsoft already had its own ad exchange, AdECN, which it bought over three years ago, it felt that it needed something more robust in order to compete with what Google (NSDQ: GOOG), Yahoo (NSDQ: YHOO) and others had been doing in the space.

So last fall, Microsoft helped AppNexus raise a $50 million third round and the two began formulating a deeper connection. Dennis Buchheim, GM for scale display at Microsoft Advertising, said the reason for partnering with AppNexus as opposed to going it alone reflected a need to “gear up for greater demand for our inventory across Windows Live and MSN, which AppNexus could help us manage.”

In completing the integration, Buchheim said that Microsoft’s exchange product would now be rolled out to other countries, starting with the UK, Canada and the Netherlands. “Up to now, this arrangement has just been for the U.S. and only for Windows Live’s non-guaranteed inventory” he said. “Now, we have the ability to create customizable solutions for publishers and advertisers, while including inventory from MSN and third party publishers.”

While AppNexus is often lumped into the demand-side platform space, which is about helping marketers and ad agencies take better advantage of RTB, the company disavows that description as inaccurate.

Certainly, the work that it will be doing with Microsoft on areas such as “yield management” (ensuring improved pricing and helping allocate publishers’ inventory among premium/guaranteed/reserved ads more effectively) makes it sound a bit like a supply-side platform, which in part it is. Microsoft has long represented publishers through its general display ad sales network, but the full integration with AppNexus means that it will be able to include this offering to existing and new partners a well. More details are available on Microsoft Advertising’s blog.

See where Microsoft ranks on our latest list, The paidContent 50: The Most Successful Digital Media Companies In The U.S.