Microsoft Moves Ad and Media Business to Dentsu Aegis and IPG

Aegis' Carat Worked with Nokia Before Tech Giant Acquired Devices Business Last Year

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Microsoft CMO Chris Capossela opens a Microsoft Store in Boston.
Microsoft CMO Chris Capossela opens a Microsoft Store in Boston. Credit: Microsoft

Microsoft is moving its multibillion-dollar ad and media business, indicating a fresh-start approach under newly appointed CMO Chris Capossela.

The tech giant has selected Interpublic Group as agency of record for advertising and global deployment while Dentsu Aegis will handle media planning, media buying and search advertising, the company said in a statement.

"We are thrilled to work with the teams at IPG and Dentsu Aegis," said Chris Capossela, Microsoft exec VP-CMO. "We believe both groups will help us communicate more strategically and efficiently in a rapidly evolving marketplace."

The selection concludes a review process that began in January. It wrapped up quickly despite Microsoft's mid-pitch marketing-leader shakeup, moving Mark Penn, a key decision-maker in the review, to a chief strategy officer role and returning Mr. Capossela, a Microsoft marketing vet, to the role of chief marketing officer.

The decision is a blow to incumbent Publicis and WPP.

Publicis had supported media through its MediaVest group and digital marketing through Razorfish, which substantially grew its Microsoft business over the last two years and has worked with the company for more than 10 years. Razorfish's work has spanned digital creative, social and some media buying across Windows, Xbox, Surface, Bing, Office and Microsoft retail.

In 2011, Microsoft moved its North America media-buying account from IPG's UM to Starcom MediaVest Group. Creative shop Saatchi & Saatchi and digital giant Razorfish, among other agencies, also were part of the team.

Within WPP, Wunderman has had deep ties with Microsoft and more than a decade under its belt. The data and direct-marketing giant has supported various marketing tasks for the company, including direct marketing; data and analytics across brands like Microsoft, Xbox, Bing and Windows; and campaign execution in local markets around the globe. WPP's Y&R also recently won creative and digital work; its Seattle-based Possible recently won web design work for Surface; and its VML also supports Microsoft. JWT has a history with the company, but lost most of that business over the years.

Within IPG, the team's shops will consist of McCann Worldgroup, Erwin Penland, The Martin Agency, MRM and Craft, among others.

The holding company has worked with Microsoft over the years, but it's gaining a large new account with the consolidation. Deutsch had been a major creative shop on the b-to-b business, but Y&R recently picked up some b-to-b assignments. UM lost its North America media account in 2011 but held onto the international work. Reprise has supported some search business. R/GA was a digital shop on Windows but lost the Surface work to Razorfish, largely due to a conflict with its new client Samsung. McCann works on Xbox in San Francisco. McCann will play a large role in the new team.

The big winner here is Aegis, which hadn't been supporting Microsoft's media business. Aegis was the only standalone media agency in the pitch, going up against large, multidiscipline holding-company teams. Still, Carat's relationship with client Nokia likely got parent Aegis a spot in the pitch -- last year, Microsoft acquired Nokia's devices and services business.

Microsoft disclosed $2.6 billion of advertising expenses for its fiscal 2013 year ending June 30. That's a huge jump from the $1.6 billion it disclosed in 2012.

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