Microsoft is going after the $70 billion spent on TV ads every year. This morning it announced that it will acquire Navic Networks, a company based in Waltham, Massachusetts that delivers interactive ads across cable TV networks.
The price was not disclosed, but a source close to the company pegs it at between $200 million and $300 million. Navic raised about $43 million between 1999 and 2001 from Himalaya Capital, Highland Capital Partners, Pequot (now FirstMark Capital), Pilot House Ventures, and Gary Lauder.
Navic’s ads are interactive overlays similar to what some advertisers are trying with online video. Except that they are targeted by zipcode to each cable subscriber. As you are watching a regular TV commercial, for instance, you could click on an overlay that opens up a window with more information on the screen, or ask for a brochure to be sent to you via e-mail or regular mail (since the cable company has your address, that’s easy).
TV still represents the majority of advertising spending, and Microsoft needs to be a player there if it wants advertising to become a significant portion of its revenues. While Navic brings interactivity to TV advertising, it does not yet tie back into online advertising campaigns. Microsoft could bridge that gap.
Google is already experimenting with TV ads that can be bought through AdWords and measured on Google Analytics. But Google is confined to Echostar satellite TV subscribers, because the cable companies don’t want to give it access to their subscribers (and have their own effort, the Project Canoe, to crack this nut). Spot Runner is also moving towards integrating online and TV ad campaigns. Although, it runs regular video ads on TV, not interactive ones.
As I’ve argued before, what we need is the interactivity and targeting ability of Web video ads on TV. Perhaps this is a step in that direction.
It is funny to think 10-15 years ago Microsoft started messing with Video delivered over IP, and now in 2008 they are getting into cable. Seems like taking two steps forward, and one step backwards.
sounds quite expensive!
I was wondering how long it would take connect the internet to television. This is a great company to bring it mainstream. Good investment Microsoft.
Clickable overlay ads on TV?
I’ve never seen this on timewarner. BTW, the interactivity would be overridden by TiVo on playback.
“As I’ve argued before, what we need is the interactivity”
I would see this as being extremely invasive technology. I would count on TiVo to neutralize these ads as adblocker plus neutralizes the TechCrunch ads.
https://addons....efox/addon/1865
You’re talking about replacing a LOT of cable boxes.
It’s almost as if Microsoft waits for Google to start getting into a market, then they immediately have to be involved.
You can’t get ahead by always being one step behind . . .
http://www.navi...logy/apollo.php
I don’t see how these features could be implemented on a normal cable box? I know digital cable boxes have the ability to do this, but it’s locked by Time Warner. You can buy your own box, like a TiVo set, but is everybody going to do that just to be spammed to in the middle of a show?
This is just funny… Microsoft is, yet again, trying to buy the innovation that it refuses to develop internally… 300M buys A LOT of engineers etc.
Jon
http://woodmarvels.com – Create Unique Memories
“This is just funny… Microsoft is, yet again, trying to buy the innovation that it refuses to develop internally… 300M buys A LOT of engineers etc.”
If you can reduce product development down to engineers and software, then you have a lot to learn. Most of the cost involved in producing a successful product or brand is NOT the cost of programming or development.
You also have to invest in people to be able to produce a good product or brand. That is why the oDesk style outsourcing rarely to never works.
Navic already has deals with the cable companies and many cable boxes can already handle these kinds of ads.
Yes, TiVo neutralizes them. But DVRs supplied by the cable companies themsleves may not.
linear programming is dead. Bring on the Internet ready TV and all of the Hulu’s in waiting.
Does anybody know the statistics behind how much money is pumped into TV advertising vs. online advertising annually? Does anybody know the bio behind the Navic founders? Looks like it will stimulate Microsoft’s advertising model http://www.read...ex.php?rta=blog
Great post Erick!!!
“As I’ve argued before, what we need is the interactivity and targeting ability of Web video ads on TV.”
This is exactly what Qoof.com is working on.
Probably a good buy for MS, but why on earth have they decided they have to be an advertising giant? Just because google is? It’s almost like they’re on auto-pilot. They have bought some impressive ad technology to date, and now this, so I guess they are in it for the long haul.
#8,
most of the big companies do that like Google bought keyhole (earth), picasa, orkut etc.,
I meant to say #7 Jon not #8