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Meet the Exec Now Driving Microsoft's $1.1 Billion Ad Budget

New CMO Will Try to Carry Out 'One Microsoft' Idea

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Microsoft's newly appointed chief marketer is a familiar face, for better or worse.

A month into his tenure, Microsoft CEO Satya Nadella has tapped Chris Capossela for a second spin as CMO. A 22-year Microsoft veteran who spent a couple years as Bill Gates' speech assistant, Mr. Capossela held the position from April 2011 to July 2013.

Now he's back. However, in an interview he said the title may be the same but the job is a lot different.

"I was running what was known as a central marketing group, which had functional services that could be used by the eight business groups we had but we didn't have specific product marketing teams. Now it's all in one place," Mr. Capossela said.

Of course the same could have been said the last time Microsoft overhauled its marketing organization -- eight months ago. Only this time Mr. Capossela has control over budgets.

When Mr. Nadella's predecessor Steve Ballmer reorganized the company's businesses and leadership last summer, his aim was to coalesce a company known for its infighting into "One Microsoft." Interestingly that realignment shifted Mr. Capossela out of the marketing department.

But rather than look outside the company for a big-name marketer to underscore the fresh start -- say, the well-respected Wendy Clark of Coca-Cola or Beth Comstock of GE -- Microsoft replaced Mr. Capossela with an insider: Tami Reller, former CFO of an accounting software firm that Microsoft acquired in 2001. She had served as CFO and CMO of Windows before being named executive VP of marketing last July. Now Ms. Reller is out the door and Mr. Nadella handed the reins back to Mr. Capossela.

"As a marketer, we're in so many businesses we often have to see ourselves as a leader and challenger."

Described by an ex-colleague as "a product person at heart," Mr. Capossela's most recent role in the consumer channels group was considered more in his wheelhouse than marketing was. As corporate VP of Microsoft's consumer channels group, Mr. Capossela worked with retailers and telecom companies to juice sales of Microsoft's consumer-focused products like the Xbox gaming console, Surface tablet and Windows smartphones.

Prior to that, Mr. Capossela had some success as a VP in the Microsoft Office Division marketing Office, Office 365, SharePoint, Exchange, Lync offerings and even oversaw the launch of Office 2007 and 2010.

While his consumer-marketing background is thin, that stint may prove useful as Mr. Capossela looks to navigate Microsoft's product-marketing needs.

"The fact is we are a clear market leader in some businesses and when you are you drive a campaign in a certain way, but some ways we're challengers as with search, phone, and in the tablet [market]," said Mr. Capossela. "As a marketer, we're in so many businesses we often have to see ourselves as a leader and challenger."

Former Microsoft marketing executives characterized Mr. Capossela's marketing strategy as "product-driven" and label him "an operations guy." He is someone who makes sure the trains run on time but isn't interested in uprooting the tracks, they said. One former Microsoft marketing executive said that Mr. Capossela "delegated everything" and did not micromanage, though he would ask to be kept apprised of progress.

Mr. Capossela's relatively passive style contrasts with his predecessor Mich Mathews, who stepped down as CMO in 2011. Over two decades at Microsoft, Ms. Mathews burnished her reputation among employees as a singular marketing powerhouse. She guided the brand through its antitrust investigation and was willing to go toe-to-toe with Bill Gates over perceptions of the company, said former employees. Even after Mr. Capossela took over, Microsoft marketers would call Ms. Mathews on the sly for counsel, said a former Microsoft marketing employee.

Wither 'Scroogled?'
Then came Mark Penn. Mr. Ballmer hired Hillary Clinton's political strategist in July 2012. Mr. Penn wasted little time before infusing fresh blood into Microsoft's messaging and drawing some from its rivals. The mastermind behind Microsoft's Google-takedown campaign "Scroogled," his D.C.-style mudslinging has met with mixed reviews among Microsoft employees. Mr. Capossela is said to have disliked the direction Mr. Penn took Microsoft's marketing, but he declined to discuss the "Scroogled" campaign in an interview with Ad Age.

But that's history. Coinciding with Mr. Capossela's re-appointment, Mr. Penn has been named chief strategy officer and has ceded control of Microsoft's $1.1 billion ad budget to Mr. Capossela, who now reports directly to Mr. Nadella. That appears to be a welcome change. Microsoft employees are said to view Mr. Capossela as "a great people manager, good communicator and not derisive like Mark Penn," according to an ex-colleague. One former Microsoft marketing executive said Mr. Penn's contract is set to expire in June, which if true may have spurred the most recent shake-up.

Mr. Capossela will have an early chance to brand Microsoft's marketing as his own. In January Microsoft began an extensive agency review, in which Mr. Penn was said to be a top decision-maker. Will Mr. Capossela, like Mr. Nadella, commence his tenure with an incremental twist on his predecessors' strategy? Or would he do something as radical as consolidate its agencies into a single dedicated shop for this new "One Microsoft"?

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