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In honor of the advance 08 Advertising Leadership Forum sponsored by Microsoft and held in Redmond, Microsoft not only trotted out the big guns (James Cameroon and Bill Gates), but it also issued three press releases in one day (here, here, and here). Essentially, Microsoft has unified all advertising under the “Microsoft Advertising” banner, and Brian McAndrews, Senior Vice President, Advertiser and Publisher Solutions is in charge of it all. He candidly admitted that “[w]e need to deliver better ROI to our customers by continually improving the quality of impressions, which in turn, will increase conversions. Secondly, we need to demonstrate stronger industry leadership by continuing to improve our creativity and innovativeness. And finally, we need to constantly work to enhance our industry expertise, constantly focusing on our clients’ businesses to provide tangible solutions to their problems. We are committed to addressing the most prevalent issues quickly and to continuing to foster dialogue about what our customers need, and what we can and should be focusing on to help them succeed.”

With the Rapt acquisition now closed, Microsoft plans to to fold their advertising yield management solutions into the Atlas division as a key component of the Atlas Suite of technologies and services. Microsoft also is digesting several strategic acquisitions, including the ad exchange, AdECN, which closed the same day as aQuantive, the behavioral targeting company YaData and Rapt. Microsoft’s Advertiser and Publisher Solutions (APS) Group. The Microsoft Advertising brand will encompass Microsoft’s digital advertising platform businesses, Atlas, AdECN, adCenter, DRIVEpm, Massive and ScreenTonic, as well as the company’s media offerings for advertisers.

Microsoft also announced the extension of display advertising capabilities to two key Windows Live for mobile services – Windows Live Messenger and Windows Live Hotmail – alongside the launch of Windows Live for mobile services in new international markets. Microsoft also plans to enable advertisers to manage keyword campaigns through Microsoft adCenter in Windows Live Search Mobile.

Engagement Mapping, currently being tested, allows firms to track back through all previous interactions consumers have had with advertising and marketing messages across multiple sites and channels culminating in the sale to gain more sophisticated insights into what influences buying decisions.

In addition, Microsoft recently demonstrated a new smart shopping cart, developed in concert with computerized shopping cart manufacturer MediaCart Holdings and Wakefern Food Corporation, a leading regional US grocery chain. The cart is equipped with an onboard digital screen utilizing Microsoft’s Atlas technology to serve video ads to customers as they shop. The system, which will be rolled out across Wakefern’s ShopRite stores later this year, allows shoppers to scan their loyalty cards into MediaCart shopping trolleys and receive ads and promotional offers based on their previous purchases and saved online shopping lists. Advertisers can deploy reporting and analytics capabilities to gauge the performance of the ads.

Looking ahead, new products and services under development in adLabs, the company’s digital advertising technology incubator, include “LifeStages,” a new technology that segments users of Windows Live Spaces into different life stages – for instance, recent college graduates or newlyweds – based on their public blog entries or photo captions. This enables advertisers to better target users by serving up highly-relevant non-intrusive ad content. Also in the works are contextual ads for video, deploying speech recognition technology to present relevant ads to consumers while they view video clips online without interrupting their viewing experience.

While all of the above reflects progress, Microsoft still has a very long way to go until it offers Google serious competition in the digital advertising arena.