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Fast Company: Making Microsoft Cool

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May 26, 2008 – Comments (5) | RELATED TICKERS: AAPL , MSFT , MDCA

There's an article in June's issue of Fast Company (actually the cover story) about Microsoft's new ad agency, hired specifically to do a "hit" on Apple in retaliation for the PC vs. Mac ad campaign. I found that it just proved the point again that Microsoft is unable to compete on the merits of its products and must resort to marketing and branding to sell itself.

http://www.fastcompany.com/magazine/126/believe-it-or-not-hes-a-pc.html

A few excerpts:

It spent two years and $500 million on the media blitz around the long-delayed Windows Vista launch, only to see the January 2007 "Wow" campaign, which likened Microsoft's new operating system to Woodstock and the fall of the Berlin Wall, derided as arrogant and creatively void. Vista itself sold poorly, leading to price cuts of up to 40%. Worst of all, the flop bred a new generation of Microsoft haters.

I think it was less the avertising campaign and more the fact that Vista really did stink and still does. No advertising is going to improve on that.

Nothing is doing more to carve away at Microsoft's reputation -- and contribute to its loss of market share -- than the assault launched by Apple two years ago in the form of the "Mac vs. PC" spots featuring The Daily Show satirist John Hodgman.

I think this gives Apple's advertising more credit than it's due. Nothing is doing more to carve away at Microsoft's reputation than Microsoft's own inability to execute. The Apple ads just remind people of what they already know about Windows and PCs. Microsoft can't respond directly because what the ads say is true - all they can do is run vague advertising with people flying through the air or singing in a circle around their X-Box 360.

"You've got a lot of passionate Mac people in here, and they've got to get their head around this thing -- why Windows is genius," says Keller. He and Reilly have outfitted their shared office (inherited from Bogusky) with an Xbox 360, which they've been using as a wireless hub. But their joint desk also holds two ultrathin MacBook Airs.

So basically: "Erm, it's genius because... they paid us to say it is? We wouldn't know, we don't use Windows in our own facility because it's not adequate for what we do but we're sure there are plenty of less demanding people who will buy it if we tell them to in a cool enough way. Just throw more marketing money at the problem and it will eventually fix itself."

There's a quote on the magazine cover (but not in the actual article) where Bogusky says "We're mercenaries. You can pay us to go after anyody."

Not because we want to, not because we use the company's products, not because they have a cool factor (because none of that applies) but because they threw a crapload of cash at us and we have our own stockholders to keep happy.

When I ask if they're making their team get rid of their iPods and PowerBooks, Reilly responds, "It's not a matter of forcing people. It's getting them to want to use it. If you can't, you're not going to do great advertising."

And the best way of convincing people to use something is for it to be desirable and easy/fun to use, instead of just advertising them into thinking it is... Even a company being paid $300 million dollars to promote Microsoft isn't going to use Microsoft products in its own shop because they would be shooting themselves in the foot by doing so.

This is the ultimate contrast. Apple creates great products and highlights them with sharp advertising, Microsoft continues to release mediocre products and tries to hide/fix that by throwing more cash into commercials. If you want to know which approach is best, compare the two companies' stock prices over the last 10 years.

(I am long Apple in my real portfolio and on Caps, I have MSFT set to underperform on Caps. I don't subscribe to Fast Company because it's not that great, my girlfriend gets them free and saves them for me.)

5 Comments – Post Your Own

#1) On May 26, 2008 at 6:08 AM, DemonDoug (34.03) wrote:

If you want a lark about Vista, go read reviews for Adobe Premiere Elements 4.0 - and how poorly it runs on Vista.  I have used Premiere Elements 2.0, and for basic video editing and collating it is great, and works great on my XP sp2 system.  On vista, premiere elements 4.0 basically does not work at all.

my experience with vista personally isn't that bad when doing the basic stuff.  However, for whatever reason, a lot of programs that work flawlessly on XP just don't work or run crappily on vista.  A lot of companies aren't even supporting the vista platform - we're talking a brand new camcorder that I bought a few months ago, no USB support for vista.  Works just fine on XP though.

What I don't understand is how badly microsoft can keep screwing this up.  They finally, finally got it right with XP sp2, after finally getting a clue with NT and Win2000, and using those kernels for XP.  Why the hell did they mess everything up so much?  Was it planned obsolesence?  I have to figure that offering an inferior product at some point will lead to the downfall of their company - just look at Google and how much they have taken over from msft and yahoo.  And why?  Becuase of quality.

My favorite Quality control test on a search engine is to put in the word "Mish."  Now most people know mish as mike shedlock, a blogger/economics guy.  put mish on google and you get his blog website, first hit.  now folks, go try it out on yahoo, see what you get.

I have a feeling that potentially, google will create an open OS that may, just may, obliterate microsoft.  the problem with apple's OS is that, frankly, it sucks.  microsoft's xp OS is way better than anything apple has ever done, apple's advantage has always been simplicity and stability.  I see no reason why the Google boys wouldn't eventually be able to build a universal OS that is both simple, stable, but also powerful and customizable like Windows. 

And yes, MSFT for the loss. 

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#2) On May 26, 2008 at 2:26 PM, JDSancho (99.51) wrote:

kristm, great comments.  I totally agree with you.  Dell is already on my list of electronics never to buy.  With my latest laptop purchase, HP and Microsoft have joined that list as well. 

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#3) On May 26, 2008 at 4:10 PM, kristm (99.72) wrote:

XP SP3 is finished but may never see the light of day. Microsoft is still deciding if they'd rather support 75% of their customers or leave them hanging in hopes that they'll upgrade to Vista instead. That's the kind of regard they have for their customers - it'd be one thing if they were deciding to put the resources into doing SP3, but its not the case because that's already happened, they spent the time and money creating it, money they won't get back regardless. They could send it out to customers with almost no additional cost but may not just to boost sales of an inferior product. But that could backfire and drive more people to some other operating system.

Apple's advertising is successful because it does point out those flaws in Windows, and also introduces the concept of an alternative. People who then go and try out a Mac are impressed enough to buy one. The advertising alone doesn't do it, Apple has to deliver the goods, offer a replacement for Windows and the PC that isn't just adequate but is superior to them in almost every way.

I'm in Michigan with the girlfriend, using her HP Pavilion laptop. It came with Vista and she hates it, as do I. This week sometime I will be wiping the hard drive and upgrading her to XP. Last year I convinced her to replace a Windows desktop system with an iMac and she's been much happier with it than with the newer HP laptop she bought against my advice.

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#4) On June 06, 2008 at 6:10 PM, sandvig (99.41) wrote:

I was in Best Buy the other day and saw that they had a sign posting their charges to downgrade out of Vista if you bought one of the new computers with Vista pre-loaded.

Let the ad company try to fix that!

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#5) On June 07, 2008 at 6:47 PM, kristm (99.72) wrote:

XP SP3 will be released as an automatic download before July 1st. It's finished and complete except for causing many wireless routers to go into an endless loop of hanging up and resetting (just like the earlier release version I tried). But otherwise it's fine...

CEO Baldmer also announced that business buying a Vista PC can "downgrade" (upgrade) to XP for free through some convoluted process understood only by Microsoft's lawyers. This is only for customers running business versions of XP so the average home user is SOL with this.

Unfortunately Microsoft will STOP selling boxed copies of XP on June 30th. So you can still downgrade to it, but you can't buy it anymore for a clean install or preloaded on a PC (unless you buy a Tablet PC which isn't capable of Vista's extra overhead).

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