Microsoft Advertising Strategy
Ballmer Predicts 25 Percent of Revenue Will Come from Internet Ads
Oct 4, 2007
Innovative Internet advertising strategies are opening the newest windows of opportunity at Microsoft, according to the company's senior management. They’re talking up their Internet advertising strategy at conferences, in interviews and in news releases, and backing up the talk with big bucks.
In October, Chief Executive Steve Ballmer told a group of European ad agencies that within a few years one fourth of Microsoft’s business will come from advertising.
According to the International Herald Tribune, Ballmer was trying to convince the group that Microsoft is serious about catching up with Google in the $550 billion global advertising market.
He spoke to the European group just four months after Microsoft announced that it was purchasing aQuantive, Inc., a leading Internet marketing/advertising firm, for a reported $6 billion. The sale was completed in August. aQuantive is headquartered in Seattle and Microsoft in Redmond, WA.
aQuantive joins MSN, Xbox Live, Windows Live and Office Live
In announcing the aQuantive purchase, Ballmer said it was another step "in the evolution of our ad network" which already consists of MSN, Xbox Live, Windows Live and Office Live.
"Microsoft is intensely committed to creating a thriving advertising business and to partnering closely with all key constituencies in this industry to help maximize the digital advertising opportunity for all," Ballmer said in the news release.
Meantime, Steve Berkowitz, Senior Vice President of Microsoft’s Online Services Group, was at the 54th Cannes Advertising Festival predicting that the distinction between the television and the computer will soon fade.
According to a Microsoft news release, Berkowtiz said people will soon access all online services through one content platform, creating a "one-stop shop" for Web advertisers.
Ballmar Says All Ad Money Will Flow Through Digital Platform
In his European talk, Ballmer said Microsoft’s ad business will grow as both the media and advertising turn digital.
"Over time, all ad money will go through a digital ad platform," he said.
Ballmer said advertising is "the clear winner" in the various experiments on how to finance Internet business. He told the advertising executives in Europe that people just prefer "an ad-funded experience to one that they pay for."
He added that even Microsoft software might someday be made available to consumers by advertising instead of being sold.
British Internet Advertising Increases 41 Percent
Just as Ballmer was making his remarks in Europe, the International Herald Tribune reported that Britain’s Internet marketing had grown 41 percent in the first half of 2007, giving it a 14.7 percent share of the total ad market.
Without the Internet increase, the British ad business would have declined by nearly two percent, the Tribune reported. Britian’s total ad revenue was estimated at $18.2 billion.
Sources: Victoria Shannon in International Herald Tribune, Microsoft news releases
