• by Wayne Friedman , June 20, 2008

Microsoft Corp.'s purchase of Navic Systems will give media agencies perhaps the biggest media tool to help their growing integrated and complex media buys--access to traditional and new television platforms.

Navic Networks, one of the leaders in addressable and interactive technologies, adds the TV component for Microsoft tools for media-buying executives. Navic already has deep relationships with the biggest cable and satellite video operators: Time Warner Cable, Cox Communications, Charter and Dish Network.

"Everything we have done has been with a non-linear video-based strategy," says Scott Ferris, general manager of Microsoft's Advertising and Publishing Services Group. "But we have always recognized there were other components of addressability in television, and other equations, that are natural complements to our core asset base of an ad server."

Now with Navic's interactive systems in place at many cable networks, Ferris notes that a $400,000 30-second commercial can be optimized to a variety of new media platforms.

"Now [a marketer] can take a 30-second spot and deploy it in a number of different channels with different functionalities--interactive television, an in-console Xbox game, into a casual downloadable game, or a mobile video." Ferris also noted that Navic can aggregate the ad and offer viewer measurement.

"Television obviously is still the lion's share of budget of a media agency," says Ferris.

Adding Navic to Microsoft's lineup was an easy decision. Ferris says Navic is not a new, untested technology company. It has been around for a number of years, becoming a major technology player among cable operators' interactive TV needs.

Navic can work with Microsoft's Atlas On Demand, Microsoft's video on demand ad insertion system, as well as Microsoft's other Internet advertising tools.

"With Navic, we have built out the entire media channel, affording our clients and advertisers a full complement of offerings in the linear and non-linear world. Navic fills the linear and non-linear components of client-based technology; Atlas Ad Manager and Atlas on Demand are the non-linear video components, mostly server-based."

While funding from Microsoft was a great addition, Chet Kanojia, CEO of Navic Networks, says it was more important to be attached to Microsoft's other media services, making Navic even more valuable to the media agency executive.

"As you think about media fragmentation the next two, three or five years, that fragmentation becomes the enemy of a publisher," says Kanojia. "They are going to have to do a ton of extra work to aggregate that audience."

Kanojia believes all this will help media agencies' own financial models down the road: "More importantly, the buy-side compensation models are not structured to deal with that level of fragmentation in the traditional media world." This is something Navic's systems can help address, he says.