Especially not Chris Dobson, global VP of ad sales for Microsoft Digital Advertising Solutions (MDAS), who wryly describes his online competitor, Google, as “a venture capitalist”.
“It has a lot of money and is investing all over the place,” he says, with no perceptible irony.
By now, Microsoft’s intense competition with the Google juggernaut is no secret. And it only looks set to intensify, given Bill Gates’ recent comments at this year’s Strategic Alliance Summit, an annual gathering of advertisers hosted by MDAS.
“His real focus is now on search,” says Dobson. “The links you get at the moment are pretty clunky, not that satisfactory, and there are so many ways you can go with search that software can drive — which sits at the heartland of what Microsoft does best.
“Our confidence is that search is not a very sticky application. Our loyalty comes from Messenger and Windows Live Hotmail. The costs of switching your messenger and mail are very high — all your buddies and emails are there — so why would you do it?
“Our best brains and an awful lot of our annual US$6 billion research and development budget is focused on the search phase now,” he tells Media—days before Microsoft announced its jaw-dropping US$6 billion acquisition for online company aQuantive.
Though Dobson could not be reached for comment following the acquisition announcement, his colleague, Erik Johnson, general manager of MDAS Greater China, points out that the sum wasn’t so princely given that aQuantive is a group of three companies — Avenue A/Razorfish, Drivepm and Atlas — with a much larger revenue and service portfolio than Doubleclick.
“We’d been shopping around for a while,” says Johnson, “We acknowledged internally that we’ve had gaps in how we target advertisers. AQuantive will significantly enhance our services on third parties and ability for our clients to extend across different platforms.
“It is a great cultural fit, too. Whenever you spend so much money on an acquisition, the most important thing is how you integrate. Geographic dispersion has been a problem for many companies, but aQuantive has the bulk of its operations in Seattle too.”
Still, Dobson, who is based in his native London, is not shy of his own company’s former sins. “In the past, we didn’t really act with ad agencies,” he says. “The first five years were about venture capital.”
These days, Microsoft is positioning itself as a friend to ad agencies. The partnership strategy is nothing new to Microsoft, but the company is clearly finding more resistance from agencies than PC vendors.
Publicis and DraftFCB CEOs both presented at last month’s Strategic Alliance Summit, but some names were glaringly absent — such as WPP, which recently bought Real Media 24/7 — a company Microsoft reportedly bid for as well.
However, Dobson still believes that partnership-building is the way to go, especially since it will differentiate the company from Google. “We’ve come a long way in the last five years to understand what it means to be a global media player, as opposed to a global software player,” he says.
“Before, we really liked the idea of standardisation, but now we realise that you’ve got to build enough flexibility to let the local nuance through where it’s appropriate.”
Chinese search engine Baidu was part of this revelation. After comparing its homepage to MSN China’s, Microsoft noticed one key difference — Baidu carried 142 online ads to MSN’s two. “The ads are all over the place, but when we looked at customer satisfaction, people preferred that page. We’d been using a Western mentality,” Dobson admits.
Now, however, he believes Microsoft is headed in the right direction: empowering local offices. “We’re building templates that can be tailored to suit local tastes,” he says, “and we’ve hired a lot of executive producers in each market.”
Furthermore, although Microsoft may trail its search competitors, it would be a mistake to accuse the company of being late to the rising mobile marketing trend. In early May, the company acquired French mobile ad company, Screentonic.
“What you can expect from Screentonic is that we’ll be taking a closer look at Asia. Mobile is just begging to happen here”, says Dobson. “It’s already happening in Japan, where 10 to 11 per cent of online advertising is on mobile.”
So, between acquisitions and internal restructuring, Microsoft is clearly trying to get its act together, if not for anything more than to “make sure Google isn’t all on its own”, as Dobson quips.
Chris Dobson’s CV
2006 VP global sales, Microsoft Online Services Group
2001 GM, Digital marketing sales and trade marketing, MSN
2000 European business development director, Zenith Media Worldwide
1997 Sales director, MTV Europe
