Microsoft Demos Zune Advertising Service

Microsoft showed a future advertising service that will allow companies to hawk their wares on its Zune media player.

Mark Kroese, a general manager with Microsoft's entertainment and devices group, on Tuesday showed a mock Doritos ad campaign on the Zune at Microsoft's Advance08 advertising conference. It was an elaborate demonstration intended to show the platform's full potential, though it will depend on the willingness of Zune users to play along.

In the demonstration, a user could visit a page on the Zune social Web site for information about a music festival sponsored by Doritos. The page included a profile of one of the musicians involved with the festival. Users could become a "friend" of the musician to view his profile on their Zune, and receive updates when the musician added new favorite artists to his profile.

In the example, Doritos offered Zune users free downloads of the musician's favorite music. A Zune user could e-mail the musician's profile to a friend who might be interested in the music. That friend could check the e-mail on a mobile phone through Microsoft's Live Hotmail service. When the friend clicks on the e-mail, a Doritos advertisement flashes briefly on the screen. Doritos is a popular American brand of snack chips.

In addition, embedded in the e-mail is a promotional game from Doritos that looked similar to the classic Asteroids game. If the user does well at the game the user receives a coupon on their phone for a free bag of Doritos. The coupon has a bar code that the user can swipe at a store checkout to collect the free bag of chips. The user can also click on a link to find nearby shops selling Doritos, with directions and a map.

The capabilities are not yet available to advertisers but will be used in a pilot offering later this year, Kroese said.

"This is not something that is far in the future," said Robbie Bach, president of Microsoft's entertainment and devices group. "We have the technology. We need to build the back-end systems to make sure we can do it well."

Bach described the Zune advertising capabilities as part of a larger effort at Microsoft to enable advertising campaigns that span the TV, PC and mobile devices.

Microsoft is already advertising in Xbox games. When Microsoft originally launched the Xbox, Bach said he wouldn't have guessed it could become an important platform for advertising. "Well, it has become a meaningful source of revenue and profit for us," he said.

Future opportunities on the Zune, mobile phone and TV represent the "new new media," which Bach described as advertising opportunities beyond the PC browser.

Bach and Kroese spoke at the annual advertisers' get together, Advance08, organized by Microsoft and hosted this year on the company's corporate campus in Redmond, Washington.

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