Microsoft is getting serious about on-line advertising. So the titans mean to tangle. That’s Google in the blue spandex. Microsoft in the red. Stay well clear of the mat, ladies and gentlemen! This is going to get ugly.
I think Microsoft could win this one. Clearly, they want to. Joanne Bradford, corporate VP of global sales and marketing at Microsoft, says that the Internet ad biz, now worth $13 billion, will grow to $100 billion in 10 years.
It won’t be easy. At the moment, Microsoft is playing catch up. Their ad revenue grew only 7 % last quarter while Google’s grew 80%. (Yahoo grew 38%).
The problem is the MSN search engine. It gets only 13% of our search inquiries while Google gets 45%. (Yahoo gets 28%.) By sewing up our searches (and, for some of us, our email), Google effectively owns the "billboards" on which internet ads appear.
Microsoft means to address this with by creating an "adCenter" designed to give better demographic targeting and the opportunity to put ads not just on searches, but free online software services, gaming and cell phones.
But the anthropological observation is clear. Microsoft could win because they actually know something about advertising. They have commissioned good advertising. They have managed good advertising.
Google has demonstrated a naiveté about advertising. Their success came to them without advertising. So they have no real world experience of what it is and why it matters. Plus, I think they made the classic error of the quantitatively gifted. They have looked at advertising and asked "how hard can this be?"
They are about to find out. And if they lose a $100 billion contest to Microsoft, naiveté (nee arrogance) in these matters will finally have a price tag.
Here’s the swing assumption. I am betting that advertising will undergo a rapid evolution in the next few years. It will get richer, more complex, more persuasive. It will evolve to capture the opportunities made available by the net and the competition that $100 billion will bring to the market.
Right now, a Google ad is not much better than a newspaper classified. It is a line or two. No images, no music, no mystery, no power. A 30 second spot on television can move us to tears or laughter. A classified ad catchs our attention only if we happen to be searching for the 86 Chevy it has on offer. Classified ads are the penny dreadfuls of the advertising world. Advertising will begin to evolve away from this model at speed.
Classified are merely, thinly, informational. (Real advertising helps construct the product by supplying deeper information, rules of use, and meanings mined from emotion, cognition and culture. ) Google’s approach is pallid. Proof? When was the last time you clicked on a Google ad? Our eyes have learned to edit-out Google advertising. All my search activity and email contains Google ads, and I have clicked on Google advertising perhaps twice in the last 3 months. How about you?
Online advertising is going to evolve ferociously in the next ten years. We will move to the incorporation of movement, sounds, color, image, transmedia, cocreation, narrative, the whole flaming ball of wax. Eventually, the internet will sustain a species of advertising that makes the present 30 second spot on television look like child’s play. Ilya Vedrashko, my colleague at MIT’s C3 is particularly good on the 3D future of the internet, and when this is installed, Google’s undernourishing notion of advertising will be laid bare, and Microsoft will sweep this contest.
Of course, Google could take a crash course. They could throw themselves at the feet of the great agencies and supplant naivete with sophistication. They could hire Russell Davies, Ilya Vedrashko, or some other leading light. They could investigate what advertising is when it isn’t a classified. This could happen. Sure, it could.