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|Founded in 1998, Multivector |

|is a leading Portugal-based |

|online advertising business. |

|It has more than 1,800 |

|customers who publish around |

|500,000 advertisements that |

|are updated daily. |

|Multivector wanted to |

|transform its business model |

|by becoming a provider of |

|advertising services instead |

|of just software. Multivector|

|has deployed AdClip, a simple|

|online software tool that |

|connects advertisers with |

|publishers and therefore |

|thousands of potential |

|customers worldwide. |

Online advertising is one of the most competitive sectors in which to operate today. But Braga-based software company Multivector has developed a revolutionary service that could be a “magic bullet” for the online classified marketing industry.

Based in Portugal, Multivector is a professional services business that provides software for advertisers, publishers, and content providers. Since 1998, the company has specialised in real estate and car dealerships, helping these advertisers manage their businesses while reaching a large audience through dozens of Internet portals. Now it has launched AdClip, an online service where advertisers can post classified listings that have the potential to reach hundreds of publishers and many thousands of customers worldwide.

The Internet has reinvented just about every industry you can imagine, but few have been quite as transformed as classified advertising. In 2000, the newspaper share of this market peaked at U.S.$19.6 billion. But, by 2009, it had shrunk by almost 50 per cent1. The trajectory of online listings follows an equally steep upwards curve. The number of adults using online classified advertising doubled between 2005 and 2009. And 9 per cent of Internet users visit online classified sites on any given day2―the kind of audience of which print newspapers can only dream.

Given the number of publications eager to take advantage of such a lucrative online audience, there’s a surprising lack of innovative advertising solutions that connect publishers with advertisers and millions of potential customers. But that’s exactly what Portugal-based professional services company Multivector has achieved in the past few years.

Founded in 1998, the firm has been a specialist player in the online advertising market for more than a decade. Alipio Oliveira, Co-Founder and Administrator at Multivector, explains how the business first took advantage of online advertising: “In the early days of Internet advertising, the model was a lot more straightforward. We supplied real-estate firms and car dealers with the software they needed to set up Web sites, create online listings, and integrate these new services with their existing back-office systems. They could also copy their listings into a number of Internet portals affiliated with Multivector.”

Moving to a Hosted Service

Since then, the company has released several versions of the software, the most important development being the hosted service that launched in 2002. “Rather than have to copy an advertisement into every portal, advertisers upload it once to our systems, which distribute the content automatically,” says Oliveira.

|“The secret of our success is that we’ve |

|progressively moved our business model to an |

|online hosted service.” |

|Alipio Oliveira | |

|Co-Founder and Administrator,| |

| | |

|Multivector | |

Oliveira and his colleagues looked at the challenges facing the three principal participants in the online classified industry: advertisers, publishers, and customers. They also looked at existing pay-per-click advertising models and concluded that this approach could be applied to their own business. Oliveira says: “To increase the number of customers and leads, we needed to reach out to publishers and find a simple, risk-free way for them to connect with advertisers. It sounds straightforward, but it was a real challenge for our strategists and developers.”

Content in the Cloud

To put this in perspective, Multivector currently stores details of more than 500,000 properties, along with 4 million photographs on its systems. “Our goal was to make these available to publishers―from newspapers to bloggers―at the click of a mouse,” says Oliveira.

Although it took an enormous effort on the part of Multivector and its developers, the solution was as simple as the problem. Called AdClip, this online service can be accessed by any advertiser, from real-estate companies to individuals with only one or two items to sell. Put simply, it publishes advertisements automatically to classified advertisement pages hosted by hundreds of publishers.

This approach―also known as software-plus-services―synchronises software hosted by advertisers with powerful services managed by Multivector. Here’s how it works from an advertisers perspective. These companies use Multivector software on their computers to consolidate information about products that they want to sell. This may include data, photos, videos and virtual tours. They upload this information once to Multivector systems, which automatically populate multiple sites including the advertiser’s own Website, the online portals and AdClip itself.

Customers respond to the ads by completing a simple form, wherever they see the content. These messages are automatically sent to Multivector servers and then downloaded to the advertiser the next time they connect with Multivector. In addition, an email is sent to the relevant advertiser as soon as an enquiry reaches the Multivector system.

Oliveira says: “Advertisers that run Multivector business software can integrate this easily with AdClip, making it quick and inexpensive to broadcast classified advertising to a fast-growing audience of publishers.”

So how does it work from the publisher’s point of view? Again, it’s very straightforward. An organisation or individual logs on and registers at the AdClip site, hosted by Multivector. They can then filter available advertisements by a number of specifications, including category, age, or locality. Once this subset has been created, the AdClip service generates a piece of HTML code, which the publisher pastes into the Web site of a local newspaper or a blog, for example.

And from a customer’s perspective, the AdClip approach is equally convenient. Clicking on the classified advertising button on the newspaper takes the reader to a page of listings, but without leaping to another Web site. This is great news for visitors that want to avoid hopping from one browser tab to another.

|“We’ve seen year-on-year revenues grow by as |

|much as 50 per cent thanks to this approach.” |

|Paulo Fernandes | |

|Co-Founder and Administrator,| |

| | |

|Multivector | |

A Model That Appeals

The AdClip model has a vast appeal to many categories of advertiser and publisher. Advertisers, for example, break down into a number of categories. Paulo Fernandes, Co-Founder and Administrator, Multivector, says: “Most real-estate firms or car dealers are small businesses with about half a dozen employees. AdClip gives them the opportunity to reach a much larger audience than previously available, whether a local or global audience.”

Then there are content providers―companies that own large databases―and technology providers, which build Web sites for clients who can also generate revenues for their businesses. Finally, there are individuals―people who have only one or two items to sell, but want to reach as wide an audience as possible.

|“Instead of reacting to events in the |

|classified listings market, we’re now marching |

|step by step with advertisers, publishers, and |

|customers.” |

|Alipio Oliveira | |

|Co-Founder and Administrator,| |

| | |

|Multivector | |

Transforming Asset Management

Critically, advertisers only pay to access contact request. They pay for clicking only if they create a campaign to highlight advertisements. The advertisements will be presented on top of listings in relevant searches and on the highlight boxes if the publisher has them.

Building an International Network

AdClip is supporting the international expansion of the business with a network of country managers who have the opportunity to drive the AdClip service in a given territory. The arrangement―similar to a franchise―offers individuals a five-year contract in return for around 15 per cent of the value of each click through. The remainder is divided between publishers, which receive 25 per cent of the value of each click through, Multivector (45 per cent), and other content providers (15 per cent).

“Country managers look at all our tables of information, especially listings of cars and real estate, and use their local knowledge to ensure that this is correctly tailored to their territory,” says Oliveira. “In return, we provide them with all the marketing documents that they use to attract the participation of newspapers, city portals, and blogs, for example.”

The good news for country managers is that the AdClip model involves little or no risk for publishers that want to broadcast advertisements using the service.

“A newspaper doesn’t pay anything to carry listings from the AdClip service and it has everything to gain if readers click on those ads or complete a purchase,” says Oliveira.

Transforming the Business

In the space of just a few years, Multivector has transformed itself from being a software provider to a professional services business with thousands of customers. Fernandes says: “We’ve seen year-on-year revenues grow by as much as 50 per cent thanks to this approach.”

One of the main reasons for this expansion is that advertisers are now spending their budgets on Multivector services that connect them with large publishing audiences as well as the software that they use to manage their businesses. “It’s important for us that we can deliver value through a professional service that operates on a monthly or annual subscription rather than a one-off spend on software and perhaps a support contract,” says Fernandes.

And there’s another reason why Fernandes favours the services approach. “The time-to-market of new software or upgrade is typically much longer than a new online service. It means that we can respond to the needs of our customers and align our offerings with the challenges that they face in their advertising businesses,” says Fernandes.

This will help Multivector sustain its increase in revenues. By mid-2009, 250 publishers in Portugal were carrying classified listings sourced from AdClip. And with the launch of the country manager programme, the company is confident that it can connect thousands of advertisers and publishers in many other countries. “The secret of our success is that we’ve progressively moved our business model to an online hosted service,” says Oliveira. “Instead of reacting to events in the classified listings market, we’re now marching step by step with advertisers, publishers, and customers.”

1Business Analysis and Research, Newspaper Association of America, Advertising Expenditures

2 Pew Research

| “Advertisers that run Multivector business |

|software can integrate this easily with AdClip,|

|making it quick and inexpensive to broadcast |

|classified advertising to a fast-growing |

|audience of publishers.” |

| |

|Alipio Oliveira | |

|Co-Founder and Administrator,| |

| | |

|Multivector | |

Software + Services

Software-plus-services is an industry shift driven by the fast-growing recognition that combining Internet services with client and server software can deliver exciting new opportunities. Microsoft is dedicated to helping individuals and businesses take advantage of these opportunities. By bringing together the best of both software and services, we maximise capabilities, choice, and flexibility for our customers. The broad software-plus-services approach unites multiple industry phenomena including software as a service, service-oriented development, and the Web 2.0 user experience under a common umbrella.

For more information about software-plus-services, go to: softwareplusservices

|Learn more about Multivector at: |

|multivector.pt |

| |

|Learn more about AdClip at: |

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This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Document published October 2009

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