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Microsoft Flips Famed PC vs. Mac Ads to Pitch Smartphones, Tablets

Campaign Is First Produced by Agency M:United

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Microsoft, once the tech king, is ripping a page from its old nemesis by pitting its mobile devices squarely against the reigning market leader: Apple.

The campaign is the first produced by m:united, the name given to the new agency created after Microsoft shifted its media and creative businesses to Interpublic Group and Dentsu Aegis in April.

"We are a challenger brand in the mobile category," said Kathleen Hall, general manager of global and brand marketing at Microsoft. She admits the move borrows some from Samsung, which staked a claim in the smartphone market with ads panning the iPhone. "Samsung did it more on an emotional position," she said. "We're going for more of a rational appeal."

First up was an ad for the Lumia 635 from Nokia, which Microsoft owns, that boasted the supremacy of Cortana, its personal computing assistant, over Apple's Siri. Then, Microsoft debuted another commercial, called "Power," that positions its Surface Pro 3 tablet next to Apple's MacBook Air. Two similar spots will soon follow.

Cortana is central to Microsoft's appeal. The voice-activation feature premiered in April and is named after a character in Microsoft's video-game hit Halo. Executives have been pushing it as the killer spec in Windows smartphones, praising Cortana's abilities next to Siri and Google Now, the Android system.

"Cortana is not just a feature," Ms. Hall said. "It's a holistic experience. It's a new way to involve yourself with your phone."

Consumers may not start picking phones based solely on their robotic personas. But the ad campaign can help the branding for Windows' fledgling operating system and devices, said J.P. Gownder, an analyst with Forrester Research. "Cortana is the first element of Windows Phones to even put [them] on the map," he said.

With its Surface ads, Microsoft is trying to redraw a map. The commercials end with the tagline, "the tablet that can replace your laptop." And they focus on the features of the tablet, like its standing docking station, that lend it laptop-like utility.

Ms. Hall described the campaign as developing a new category, which is the reason why Apple's MacBook laptop was chosen to play the foil rather than its tablet. (Price could be another reason: the Surface Pro runs for $799, well above iPad rates but below the MacBook Air.)

Microsoft has a brief, rocky history with tablets.

Surface RT, its first generation tablet from 2012, warranted a $900 million write-down in the third quarter of 2013. During the entire year, Microsoft recorded revenues from Surface of $853 million and netted $487 million from Windows software licensing. The company spent $898 million marketing the tablets and software. (In its most recent quarter, Apple reported $5.9 billion in iPad revenues.)

Microsoft was a much bigger player before Apple rose to mobile dominance. Six years ago, Microsoft commanded more than 12% of the global smartphone software market. It holds just 2.7% now, according to research firm IDC. But IDC predicts Microsoft will expand its share to 6.4% by 2018, as it increases its hardware partnerships globally.

Ms. Hall said the new ad campaign may extend to some of Microsoft's phone manufacturing partners but did not offer further details. Last month, Cortana expanded to the United Kingdom and China.

Microsoft is now desperately courting developers and consumers to the Windows operating system. And combative advertising can bolster its odds, said Mr. Gownder. The company's previous ad campaigns for Windows have been criticized as ineffective. "It's a tradition of Microsoft to come up slowly, creep up and find a way to succeed," he said.

Microsoft spent a little over $1 billion in measured media in 2013, according to the Ad Age DataCenter. In July, the company shed 18,000 jobs, the most in its history.

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