Online advertising to be new front in Google/Microsoft battle

Microsoft will make its bid for online advertising dominance with Engagement Mapping, a new ad measurement system that the company will start testing in March.

The software giant says it’s created a new way to determine the success of online ads. Engagement Mapping will look at all the ways users are interact with ads before making a purchase, rather than just the last site or search result they visited. The measurement system will take into account “the impact that recency, frequency, size and ad format (such as rich media and video) have on a consumers’ path to action,” the company says, but it isn’t offering any more details.

Microsoft and Google are already skirmishing over Microsoft’s $44.6 billion Yahoo takeover bid. The ad effort is an attack not just on Google’s ad programs, but on Google’s general importance to e-commerce as well.

In an interview with the New York Times last September, Microsoft advertising vice president Brian McAndrews implied that Google search results are less important than many think, because customers often see an ad elsewhere, then use Google to look up the company.

“Google gets all the credit, and in fact, you might have just gone to Google to type in the URL,” McAndrews said.

Microsoft’s intention to enter the ad field became clear last May, when it acquired online ad company aQuantive (our coverage). The first Engagement Mapping results should be available at the end of the second quarter of 2008, the company says. At that point, we’ll see whether Microsoft can offer more than the many other companies — including a number of start-ups — developing similar technology.