MICROSOFT THREATENS TO FLEX BRANDING MUSCLE

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Microsoft Corp., the world's largest software company, is preparing for its first corporate branding campaign by reviewing agencies for what could be a $40 million-plus global assault, Advertising Age has learned.

Cursed by competitors and feared for its sheer dominance, Microsoft once again will dictate industry ground rules.

Now, products like Microsoft Office battle products like Lotus SmartSuite. But in the future, competitors will have to take on the awesome Microsoft brand, with the likelihood the battle will spread to TV, in the past little used by even the largest software companies.

Microsoft has invited a handful of agencies to pitch, via questionnaire.

Ogilvy & Mather, Los Angeles, holds Microsoft's estimated $50 million U.S. product account; O&M's New York office is the only shop that Greg Perlot, Microsoft director of advertising, would identify as being in the pitch.

Other candidates could include Chiat/Day, Venice, Calif.; Fallon McElligott, Minneapolis; Goodby, Berlin & Silverstein and Hal Riney & Partners, both San Francisco; and Ammirati & Puris, New York.

There is a catch: Microsoft hasn't decided whether it needs the campaign. To win the account, an agency must prove a corporate campaign will produce measured results, and then it must present compelling creative.

The need for proof comes straight from Bill Gates, Microsoft's powerful chairman-ceo, who will have final say on whether to proceed with the campaign. Just how results would be measured is unclear.

"We have to be convinced, and we are asking some agencies to help us and present their points of view," Mr. Perlot said. "... Obviously if we are going to cause the stir of contacting agencies ... and getting some ... great minds thinking, that suggests a certain level of seriousness."

Mr. Perlot said the campaign has no relation to Microsoft's expansion into new areas such as interactive TV. Products-specifically software products-will be at the heart of the proposed campaign.

A corporate campaign would be a radical shift from a long focus on promoting products, such as Windows, the personal computer operating system software, and Office, a package of work software programs.

"We want to more pro-actively manage our image," Mr. Perlot said. "The very clear marching orders [to agencies] are `Show us how to bring the Microsoft brand to life."'

Microsoft has been pondering corporate branding issues for the past year, including some preliminary discussions with agencies. But the decision to start a formal corporate review grew out of a major restructuring, unveiled in March, under which Microsoft consolidated formerly independent product lines into seven product groups. The company is well-known in the business market but has a fuzzier image in the booming consumer PC software market.

Microsoft wants to complete the review by July 1. There has been no budget commitment yet, but observers believe it will top $40 million.

In addition to handling Microsoft in the U.S., O&M is the company's U.K. agency. International divisions pick their own shops; Chiat/Day, Toronto, handles Canada.

Gerald McGee, exec VP-managing director for O&M in Los Angeles, called the review "a great worldwide challenge and one for which we have great resources."

But Mr. Perlot isn't necessarily looking for an O&M-size global agency; he also stressed the review doesn't affect relationships or budgets with existing agencies.

O&M would have good reason to feel threatened if the corporate assignment lands elsewhere. Mr. Perlot said he envisions a corporate agency's efforts to create a unified global image would have a "ripple effect" leading to more unity in product ads.

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