Microsoft has invited selected advertisers to test their new ContentAds contextual advertising program. Eventually, MSN ContentAds is expected to become a fully fledged competitor to Google’s AdSense and Yahoo!’s Publisher Network.

For now, the beta test allows advertisers to place content-targeted text ads predominantly on MSN properties like MSN Real Estate or MSN Money, but MSN’s announcement seems to indicate that some non-MSN properties may also be included in the pilot program.

Advertisers will be able to set bids for search and content separately, and will be able to apply geo-targeting and behavioral targeting. While the current invite-only pilot is aiming to test basic functionality, future releases should see image ads being supported in addition to text ads.

Publishers should be welcoming MSN as a new player in the contextual advertising market, while advertisers will be able to broaden the reach of their campaigns.

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