The campaign starts in the UK from next week and will then roll out across 15 markets in Europe, Middle East and Africa over the next two months.
It will run across the MSN's homepage Messenger, Hotmail and entertainment channel, and will be localised to fit each region in a bid to reach the brand's key audience of 18 to 35 year olds.
There will also be an unbranded internet teaser campaign. Designed to test consumer's brand perceptions, it comprises a four-stage adventure game that once completed, will direct users to the Peugeot 207 mini site.
Peugeot GRC manager Eric Legendre said: "This is the first time we've created an online campaign of this scale and we're really excited about the level of creativity Peugeot has achieved with MSN.
"The advertising package MSN developed for the new Peugeot 207 was specifically tailored to our marketing objectives and the ease of a single point of contact when creating such a huge campaign made the process both time- and cost-effective."
MSN EMEA regional sales director, Marc Bresseel, added: "The automotive sector was an early adopter of online advertising and quickly recognised the effectiveness of reaching a mass audience through the variety of channels online offers.
"We now face the challenge of keeping up the momentum and constantly evolving the technology we have available to really push the creative solutions on offer."
If you have an opinion on this or any other issue raised on Brand Republic, join the debate in the Forum.