October 2, 2007

"madison avenue, you work for redmond now"

0710surfaces.jpg
[The real hit of the show: Microsoft Surface makes an appearance.]

0710ballmer.jpg
[Steve Ballmer on stage. I had a press pass so I got to sit second row central.]

My take on the Microsoft Imagination Show 07:

Microsoft has every intention of taking over your advertising budget, in the same way they once took over your IT budget. Madison Avenue, you work for Redmond now etc.

Do The Math: Microsoft has gone on record for saying they think they can get 5% of the total amount of money spent on advertising globally each year. 5% of $650 billion is $32.5 billion. Thirty two point five billion dollars annually. Nice work if you can get it.

OK, maybe that's a bit extreme Kool-Ade drinking on my part. But don't underestimate their ambition or capability, either. In his keynote, Steve Ballmer said he predicted advertising to be between 25-50% of Microsoft's core revenue within a few years.

I'll write more about this later, once I have time to really sit down and think.

[UPDATE:] The London Times confirms what I heard in Paris. Ditto with Businessweek. Ditto with New York Times.


Posted by hugh macleod at October 2, 2007 2:26 PM | TrackBack
Comments

This is some scary shit. Then again, it would be nice to see those old-line ad agencies fall by the wayside.

What are all of those account execs going to do now? Sell used cars?

Posted by: keith at October 2, 2007 2:45 PM

Hugh, thanks for the twitter updates this morning, very exciting. Looking forward to your thoughts.
Stewart

Posted by: Stewart at October 2, 2007 2:48 PM

For them to do so Hugh, they will have to buck the trend and execute significantly better than they have done over the last decade see Henry's post :
http://www.alleyinsider.com/2007/10/microsoft-inter.html

regards
Al

Posted by: Al at October 2, 2007 3:19 PM

Hugh, txs for the tweets etc
What is exactly "25-50% of Microsoft's core revenue"? Does it mean Tot MSFT minus XBox?
If it is, it's a long shot.
Do you really see MSFT as a media company? Where's their killer app there?

Posted by: Simone at October 2, 2007 3:30 PM

I agree with Keith re: spooky poop...

Let's sum up: the company that 0wnz0rs every Windows desktop and X-Box on the planet, the one that has fought tooth-and-nail to retain their God-given right to push data to every last stinking one of them in real time...*that* company...has concluded their real future lies in *advertising*?

What fun. I can hardly wait.


Posted by: Maggie Leber at October 2, 2007 3:34 PM

Surface looks amazing! Any word on when it is available for sale?

Posted by: B.L Ochman at October 2, 2007 4:46 PM

What a bleak future where everything is funded by advertising that nobody wants to see.

Posted by: Chad at October 2, 2007 6:25 PM

What's old is new again. Read "Barbarians Led by Bill Gates" and that's how they used to run the company, pretty much. Things really happen when you have great product and great marketing. The product has to be seen as great by outsiders of course - if you're eating your own dog food - who the fuck wants dog food in the 21st century?! - that's not good enough, it's not good enough for insiders to think the product is great. Jack Trout 101, success comes from without, not within, etc, blah.

Posted by: Mike Peter Reed at October 2, 2007 7:47 PM

Microsoft does not market. You have to have their product because you cannot function without it and there is no alternative. Why market when you are the only store in the world? No serious competition = don't waste your money marketing. Anybody knows what monopoly means ...

Microsoft Rules.
I write code with Microsoft tools and get paid massive amounts of money to do it.
I am rich just like Bill.
Microsoft Rules.

Best Wishes,
Dave

Posted by: Dave Armstrong at October 3, 2007 2:55 AM

I advertised with Microsoft in the late ’90’s through their old LinkExchange display advertising service, and I remember getting a pretty decent CTR for the pre-AdSense era. By comparison, Microsoft’s current online advertising efforts just don't reach into the Long Tail of online media. Until they do, it's AdSense for me.

Posted by: Mike Abundo at October 3, 2007 12:07 PM

i'm w/ Chad.
that's how they're going to change the world? that's the best that they can come up with?

boring and trite.
google's already moved from text search ads to radio, newspapers, online video and billboards. ...so microsoft's just going to follow them in to the same boring stupid business model?

ads, ads, ads, ads, ads, ads, ads, ads...seems that's all that technology can do anymore. it's dumb.

Posted by: carlos at October 3, 2007 5:13 PM