MICROSOFT MULLS BRAND STRATEGY BEFORE REVIEW

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Microsoft Corp., dumped by Ogilvy & Mather earlier this month for IBM Corp.'s half-billion-dollar account, won't pick an agency for its $45 million U.S. product account until deciding whether to pursue a worldwide brand campaign.

"We're using this opportunity, or perhaps I should say this disruption, to re-evaluate all our advertising needs," said Greg Perlot, Microsoft director of advertising. "O&M is managing the transition very well. With a 90- to 120-day window, we are going to assess what we need as an agency roster."

Microsoft has an internal deadline of July 1 to decide whether to pursue the branding campaign and who would execute it. The company also wants to name a U.S. product agency, which could be the same as the brand agency, by Sept. 1, Mr. Perlot said.

Leo Burnett USA, Chicago, and Wieden & Kennedy, Portland, Ore., are finalists on the proposed $40 million branding campaign.

Criteria for the $45 million product review haven't been set, but Mr. Perlot confirmed the company has discussed using a West Coast agency with a strong technology background. Microsoft hasn't decided whether to pick one agency or several.

The Redmond, Wash.-based software giant decided not to fold the brand review into its search for a product agency.

"The [branding] assignment is an intense and compressed assignment, and we didn't want to disrupt that," Mr. Perlot said. "We wanted to get the broad-reach brand question resolved in a contained way."

However, the winning brand agency may have an advantage in the product review.

"If they do, it would come from the fact that the top level of work needs to drive down through all the advertising," he said. "They are in the best position to think that through."

Mr. Perlot cautioned, however: "We haven't decided if we want a one-agency solution."

Microsoft's business has broadened significantly in the past 18 months, particularly with last fall's addition of a Microsoft Home line of CD-ROMs and software for the consumer market. The company plans to introduce 50 Microsoft Home titles this year, and Microsoft Office, its suite of business software programs, now owns about an 85% market share.

"The product line is expanding dramatically, and the audiences we have to talk to is expanding," Mr. Perlot said. "Our need to integrate our programs is significant. Put those together and put in the sheer volume of ads, and that's a lot of work. We want to see if there are natural breaks, if it can be segmented out."

Bradley Johnson contributed to this story.

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