Thursday, August 21, 2008

What's up with that?

Tired of getting its butt kicked by Apple, Microsoft reportedly will use Jerry Seinfeld to anchor a $300 million ad campaign to rebuild its brand. My initial reaction: What’s up with that?

The campaign is intended to address the slow update of Windows Vista, as well as the increasing (but still small) market share of Apple’s Mac OS X. IMHO the article in this morning’s Wall Street Journal sugar coats the problem:

Microsoft's immediate goal is to reverse the negative public perception of Windows Vista, the latest version of the company's personal-computer operating system. Windows is Microsoft's largest generator of profit and revenue, accounting for 28% of the company's revenue of $60.4 billion in the year ended June 30.

The software has sold well, and Microsoft retains an overwhelming share of the market for operating system software over Apple. But Apple's computer sales have been rising, and Vista is dogged by the notion that it has technical shortcomings and is hard to use. Apple's latest Mac vs. PC ads take swipes at Vista. Microsoft says early problems with Vista have been largely alleviated.
So that Microsoft has a problem seems clear, and Jerry Sienfeld is an iconic cultural figure who who can reach a wide audience.

My question is: why is Seinfeld doing it? Sure, he’s not a movie star (think Brad Pitt or Geoge Clooney) who refuses to do ads in the US but will sell himself overseas to the highest bidder. Beginning in 1992 — at the height of the popularity of his series — Seinfeld signed up to pitch AMEX cards.

Still, why is Seinfeld associating himself with a troubled brand? Is it just the money? He’s already pulling in $85 million a year, so the $10 million from Steve Ballmer (while significant) is not going to change his life.

One possibility I hadn’t considered is that spending hundreds of millions on ads and $10 million with Seinfeld) would establish Microsoft’s interest in style over substance. Certainly that was the reaction of the readers of the WSJ blog this morning.

Windows Vista has a lot of problems, with even Microsoft executives having trouble using it. One-third of business PCs are upgrading from Vista to XP, even though it’s extra work.

Microsoft is convinced the problems are one of image and not of substance (despite ongoing claims to the contrary). They seem to be ruling out the possibility that the world has grown tired of being forced to upgrade (by many firms) to bloatware, which seems like a risky assumption to make.

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