Microsoft's (potentially) killer app for online advertising

If Microsoft is successful with one of its latest ventures into online ad tracking, it could end up revitalizing the entire world of brand advertising.

As Scott Karp wrote about in his Publishing 2.0 blog, Microsoft's experimental Engagement Mapping could help advertisers quantify the results of online branding ads -- what he calls the "holy grail of advertising."

Explanation via CNET:

Say a consumer sees an ad for a product in a video ad one day, and then clicks on a text ad to visit the retailer’s site the next day, and then eventually sees a banner ad that leads to a purchase. All of the monetary credit tends to go to the text link that was clicked on, says John Chandler, principal analyst for Microsoft’s Atlas ad serving division.

“Under our (Engagement Mapping) model, those will share the credit,” for example, with 40 percent each going to the video ad and the text ad and 20 percent going to the banner, he says.

Finally Microsoft might have a advertising technology that -- if it pans out -- puts the Redmond-based software giant on par with Google. What Google AdWords has done for direct response/lead generation advertising, Microsoft's Engagement Mapping could do for brand advertising.

I see this as a potentially huge development in the online ad space -- one that could help move many companies' advertising budgets back toward branding ads. During the dot-com boom, brand advertising was in fashion (remember the 600-page issues of Industry Standard and Red Herring magazines?). But after the bust and subsequent advertising recession in 2001, branding fell out of favor at many companies, replaced by lead-generation advertising that enabled easy ROI calculations. Since then, marketers have been addicted to leads because leads have been much easier to quantify than the impact of branding ads. But Microsoft's technology could change that.

Will it actually work? I have no clue. But if it does, be prepared for the next revolution in online advertising.