Microsoft is holding its annual online advertising "DemoFest" today, giving researchers from its adCenter Labs group a chance to show their latest projects to others at the company. I was among several reporters who saw a small sampling of the projects -- including an automated system for picking gifts, and way to figure out if someone is searching for something about their local area.

The projects were interesting, and the researchers have clearly put in lots of work. But there wasn't anything in those public demos that would cause someone to stand up and declare that Microsoft is poised to take the online advertising world by storm. Afterward, I pointed this out to adLabs general manager Eric Brill, wondering aloud if the company was keeping all the cool stuff under wraps.

"It's not the kind of thing where you say, 'Woah, here's the big home run,' " Brill said. Instead, he said, the researchers are steadily improving the online advertising experience, addressing user "pain points" and making a series of incremental improvements that, taken together, add up to something more substantial over time.

One of the projects uses an algorithm that takes advantage of machine learning to analyze search terms to predict whether the user is seeking information about something in their local area. That is then combined with the user's location to serve up more relevant advertising. For example, a search for "dentist" by a person in Seattle would return results for local dentists. Similarly, a search by someone in Seattle for a restaurant in Las Vegas suggests that the person is planning to travel.

Another project, Gift Matching, helps people choose unique gifts by letting them input the interests, gender, age and other information about the gift recipient. The program then analyzes aggregate data about product searches by people with similar demographics to suggest gifts that the person might want.

The third project was an automated system to help smaller advertisers create their own online display ads.

And the fourth was Microsoft Gaze, the in-text advertising pop-up program that we wrote about in February. I took a video of Mario Esposito, an adCenter Labs program manager, demonstrating the project. Look for that later this afternoon.