It’s not hard to spot Richard Dunmall’s office in Microsoft’s Hong Kong headquarters. The stack of unpacked boxes near the door points to the new arrival.
The boxes may stay that way for a few more weeks. As a newcomer to Asia, the Englishman is on a whistlestop tour of the region. Getting up to speed quickly will be crucial if he is to begin raising perceptions of Microsoft as a viable advertising option in the region.
The boxes may stay that way for a few more weeks. As a newcomer to Asia, the Englishman is on a whistlestop tour of the region. Getting up to speed quickly will be crucial if he is to begin raising perceptions of Microsoft as a viable advertising option in the region.
His role, general manager of Microsoft Advertising, Greater Asia-Pacific, is a new one and follows the reorganisation of MDAS (Microsoft Digital Advertising Solutions) into Microsoft Advertising earlier this year.
From a personal perspective, he says the decision to move to Asia is a “last hurrah” for him and his wife before they start a family. Professionally, it’s a challenge that could make his name. “From a business perspective everyone is looking at digital in China,” he says. “This is a new region for Microsoft. Like a lot of global companies in the Far East, there’s some work to do.”
Microsoft has more work to do than most. It lags key rivals Yahoo and Google in most key measures. Yet, it has pockets of excellence - for example, Ninemsn in Australia. And it benefits from a broad range of sites - in Southeast Asia, for example, industry sources indicate that Microsoft’s platforms could reach 10 per cent of users, and even more if Facebook, which MSN represents globally, is included.
One source at an ad sales house believes Microsoft has failed to realise the potential of its sites in Asia, largely because, unlike rivals such as Yahoo which built up operations very quickly, it has had a limited team in the region. Much of its ad sales is still outsourced to third-party sales houses. “It has had virtually no presence on the ground. You have to ask what has gone drastically wrong with its strategy in the region.”
It is a sign of Microsoft’s foot-dragging in Asia that Dunmall is the first Asia-based regional chief. There’s certainly room for expansion. Outside Dunmall’s sea-view office, in Hong Kong’s Cyberport, there are several banks of empty desks - a visual reminder that Microsoft’s operations have failed to meet its ambitions. “We’re aware that our business is not as scaled as it could be,” says Dunmall. “Now there’s a conduit linked to headquarters in the region. That’s a new development. I’m the beginning of a new strategy.”
The first job, he argues, is to raise awareness among the advertising community of exactly what Microsoft can offer. MDAS was criticised for confusing the market; the launch of Microsoft Advertising is intended to reassure it.
Dunmall is a good choice in that respect - having worked at Mindshare previously, he’s well attuned to the agency world, and his businesslike yet blokey demeanour will doubtless help as he tries to woo media buyers. “Our goal is to simplify things under one umbrella,” he says. “I’m responsible for monetisation of the audience on Microsoft platforms as well as publishers beyond our platforms.”
The latter point may be key. One of the most important emerging battlefields among the online giants is the advertising network offering - namely, working with third-party publishers to sell inventory. Developing this side of the business was part of Microsoft’s motive for acquiring Dunmall’s previous employer aQuantive, which operated an ad network and offered measurement and targeting services. Now it is rolling out services such as pay-per-performance and behavioural targeting to Asia-Pacific.
Microsoft already offers these technologies in Australia and will shortly roll them out in Korea and Japan, then India. “The only thing that will slow us down is the speed of hiring.”
Developing its in-game ad firm Massive and the mobile sector will form the “next generation of our strategy”, as Microsoft seeks to build a full portfolio of services in the region. “We’re building a genuine advertising ecosystem, an alternative to Google. People like alternatives.”
However, the big question remains exactly how Microsoft will boost its scale. Microsoft’s proposed merger with Yahoo earlier this year would overnight have handed it an extremely strong hand in Asia’s display market. But the collapse of that deal has left it playing catch-up.
Given Microsoft’s very public rejection by Yahoo, it’s no surprise there’s a degree of schadenfreude regarding its current troubles. “The current economic climate demonstrates those who have scaled quickly but don’t have the capital to be in it for the long term,” says Dunmall. Coming so soon after Yahoo announced a global layoff programme, it’s not hard to guess who he’s talking about.
Now, Microsoft is looking at acquisitions and partnerships with local players as ways to expand, and will make a number of “strategic bets” in sectors it thinks will grow, both for the sites it owns and operates and third-party publishers it can help.
Geographically, China and India will be the focus, along with mature digital markets such as Japan and Korea. “China is somewhere we have to be - it’s non-negotiable. Part of our key advertising strategy is to invest where the money is most concentrated. Our prioritisation geographically will be where there are the biggest ad budgets”
Dunmall, however, is under no illusions about the scale of the challenge. Before anything else, he says, Microsoft needs to make sure it is delivering on its promises. “We need to get the basics right in our advertising business - executing well, getting the right resources, doing what we say we do.”
That, he claims, will make Micrsoft the tortoise to Yahoo’s hare. “Up to now the velocity has not been as fast as some might think appropriate. But we feel our strategy is right, and we’ll get there.”
Richard Dunmall’s CV
2008 General manager, Microsoft Advertising Greater Asia-Pacific
2007 Senior vice-president and managing director, EMEA, Microsoft APS
2006 Senior vice-president and managing director, EMEA, aQuantive
2004 CEO MindShare Interaction, UK
2004 CEO mOne UK (JV between Mindshare and OgilvyOne)
2001 Sales director, AdLINK Internet Media
