News

Microsoft Starts Windows Ad Campaign, With Nod to Shareholders

Microsoft launched the first TV commercial in its new $300 million ad campaign that's designed to spur consumer interest in Microsoft operating system products.

• By Kurt Mackie
• September 08, 2008

The commercial featured Bill Gates getting fitted for shoes by comedian Jerry Seinfeld, who joked that Gates should work to make computers "moist and chewy" in the future. The ad taps the general Microsoft brand. It didn't specifically mention the company's flagship Windows Vista operating system. Seinfeld reportedly is getting paid $10 million for the series of ads.

"Think of these ads as an icebreaker to reintroduce Microsoft to viewers in a consumer context," explained Bill Veghte, senior vice president of Microsoft's Online Services and Windows Business Group, in a Sept. 4 letter to Microsoft's employees.

The ad is part of an overall campaign that will show how Windows connects software, online services and the PC in new ways, explained Brad Brooks, Microsoft's corporate vice president for Windows consumer marketing. He said the campaign has two goals.

"No. 1 is to reengage emotionally consumers around the brand Windows, and actually create that emotional connection again -- a connection that we've had, and want to have again," Brooks said in a prepared statement. "It's also to actually drive a great customer experience for our customers at all levels and all touch points around how they experience the Windows brand today."

The Gates-Seinfeld shoe ad elicited puzzlement, but also positive views from some industry participants we contacted.

"What do shoes have to do with Microsoft software?" asked Stuart R. Crawford in a Sept. 6 entry in his blog. Crawford is vice president of business development for IT Matters, a Calgary, AB, Canada-based Microsoft Gold Certified Partner specializing in small business solutions.

"This ad is a much more human/consumer approach to Microsoft Vista/PC challenges, and based upon future commercials and 'actual product delivery,' will work to resolve their PR issues," commented Ken Thoreson, founder of Acumen Management Group, a sales management consultancy.

"The human approach to technology is very powerful, something that we at Phase 2 have been focusing on heavily," said Kevin Doherty, CEO of Phase 2 International, in an e-mail reply. "It goes without saying that a good marketing campaign is just the beginning." Phase 2, a Microsoft Gold Certified Partner, is a provider of customized hosted solutions to small-to-medium business customers worldwide.

While Microsoft's partners weren't exactly the target of the ad, neither were consumers, according to a Sept. 5 media analysis by Gartner Research Vice President Andrew Frank.

"High-tech branding is not about end users or IT decision-makers, it's about the shareholders," Frank wrote. Specifically, the ad is aimed at boosting shareholder perceptions of Microsoft. The problem is that Gates has left the helm, and Microsoft's price-per-earnings ratio lags behind those of Google and Apple, Frank said.

Under this interpretation, Gate's butt-wag at the end the commercial may be a tacit assurance to shareholders that Microsoft has profitable plans in the making.

In addition to the new ad push, Microsoft has other ideas to help boost consumer interest in Windows.

For instance, Microsoft has created a "Retail Experience Center" on its Redmond campus to conduct consumer research. Also, the company plans to place product demonstrator personnel, trained by Microsoft, in computer retail stores such as Circuit City and BestBuy.

Microsoft is also working with PC original equipment manufacturers -- such as Acer, Asus, Dell and others -- to accelerate startup and shut-down times, as well as improve the reliability and security of computer systems running Vista, according to Veghte.

Veghte has assembled a team in Bellevue, Wash. -- in a building called "the bunker" -- to help brainstorm on moving the Windows brand, according to a New York Times story.

Windows has been a successful brand for Microsoft. It runs on approximately 90 percent of computers around the world. This year, Windows brought Microsoft a profit of $13 billion, according to the company's fiscal 2008 report, which covered the year through June. Also in fiscal-year 2008, Microsoft spent $149 million for overall sales and marketing of its client operating systems, including Vista.