Byravee Iyer
Jun 1, 2015

Microsoft claims advertiser benefits from 'transformation' in Asia

Microsoft is touting "hyper targeting" of users across multiple screens based on factors such as the service they're using and their location, as it works to heighten its appeal to advertisers as part of Microsoft's transformation under CEO Satya Nadella.

Frank Holland
Frank Holland

Hyper targeting, according to Frank Holland, Microsoft’s VP of advertising and online, should make the company's advertising platform as easier choice for marketers to make.

“If you have a platform like Facebook, you don’t have to worry about context,” he said. “When you work with our products, it is so varied­—you could be playing an Xbox game or Skyping—and we wanted to make it easier for marketers to buy from us.” In the coming months, the company will launch several platform advancements in this space, Holland said.

However, Microsoft's platforms already offer attractive options for advertisers, Holland said, pointing to the example of a recent campaign for a global consumer-electronics company that he chose not to name. The advertiser wanted to target technology enthusiasts who are also mums. Microsoft with its "wide range of products and authentication across a number of screens" could bring out insights and data on this particular group. The client then used these data to target the intended audience across multiple screens, using Microsoft's frequency-capping and sequential-messaging features.

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The tech giant is going through considerable change under its third CEO. The company made the decision to give away its franchise product Windows for free on devices under 9 inches in size. As revenue streams like that deteriorate, Holland is figuring other ways to drive growth. “You’re going to see us do more integration of ad capabilities into our products," he said. "The whole company is shifting in the way we’re monetising. We’re not building a walled garden, but we’d like to monetise where the consumer is." This includes building excitement for Windows 10, a version of which will run on any device, any size, as well as making it easier to bring Android and iOs apps to Windows.

Core products

MSN remains the company’s franchise advertising product and represents a big percentage of revenue. Skype is compelling too and is becoming a big driver in this region, Holland said.

The firm is working to enable brands in Asia to target consumers based on the locations of the people they are communicating with. For example, Microsoft recently worked with a regional airline to show Skype callers promotions for airfares between the two cities in which the users were situated. “The ability for brands to target consumers based on geographical locations brings up new possibilities, especially for the travel and telecommunications industries,” Holland said.

Earlier this year, Microsoft’s search engine, Bing, grew market share to 20 per cent, as Yahoo and Google both reported minor declines. “Bing is getting a lot more traction, and it’s better than Google on relevance in the US," Holland asserted. "We’re seeing a pretty nice kick in revenue uplift and we’re sniffing profitability.” He added that this has allowed the company to invest in other markets like the UK, Canada and Australia. “You will see us get it right in certain markets and then we’ll move on to others.”

The big opportunity for the software giant is the change in its relationship with Yahoo, which puts Microsoft in charge of sales relationships for Bing. Holland is pushing for a significant increase in the inventory traded programmatically. While on his Asia tour, he met with top agencies and clients and urged them to move their ad dollars to programmatic.

Currently, 25 per cent of display ads are bought programmatically. “Some of our customers are doing the trade at 100 per cent with us," he said. "All four Nordic markets have moved aggressively into programmatic. In Asia, we’re seeing double-digit growth.”

While the company launched Bing and has reached a point of competitive relevance in China, the market is a tough one. “There’s a 400-pound gorilla and it’s called Baidu. Right now, we’re making sure we are known, and we are making a lot of progress there.”

Post restructure

Last October Microsoft announced a massive layoff that made part of its advertising sales team redundant. Holland, who heads up the advertising executive team, said the move resulted in better integration from holding companies and much more direct accountability. The other big benefit, he said, is better management and service for multinational clients.

The move has also changed the way the company thinks of marketing products. “We used to be confused when we did big creative deals," Holland admitted. "They weren’t necessarily hugely profitable and we’d invest a lot. Now we’re clear when we go into a deal that it has to have business pull through.”


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