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Past winners (chart) MARKETER OF THE YEAR BILL GATES' VISION OF MICROSOFT IN EVERY HOME CONSTANTLY SELLING, SOFTWARE LEADER RELIES ON MULTITIERED MARKETING PLAN

By Published on .

Six months ago, Bill Gates' lieutenants presented an either/or option: Hire Wieden & Kennedy for a massive branding campaign or scuttle the whole idea.

Though Leo Burnett Co. was technically a finalist, the three executives charged with picking an agency opted to bring in only the standout creative team from Portland, Ore., for an audience with their leader.

"We didn't have a fallback," says Liz King, Microsoft Corp.'s director of corpo-rate marketing. "We knew [we] wanted to do this. It was really a question of whether this creative was going to put him over the top."

After Wieden's 90-minute presentation, Microsoft's chairman-CEO met for about 10 minutes with his executives, and then Mr. Gates gave the go-ahead. The company was on its way to starting a $100 million global ad campaign.

The decision to turn up the advertising is entirely consistent with Mr. Gates' knack for knowing when, what and how to sell in an emerging market.

The 39-year-old is known as the richest American-net worth: $9 billion-and leader of the world's largest PC software company-fiscal '94 sales: $4.7 billion-but it's for his acumen as chief executive and marketer that Advertising Age has selected him as its 1994 Marketer of the Year.

Mr. Gates has built Microsoft through a multitiered marketing strategy, in which he sells PC marketers his Windows operating system software and gets software developers to write applications based on Windows, ensuring that buyers end up with Microsoft when they buy a PC or software. To close the loop, Microsoft markets the best-selling line of Windows applications, like Microsoft Office.

"We're a company that's always been willing to take a long-term approach, whether it's technology or how we work with employees and customers," Mr. Gates told Advertising Age in an interview. His popular Windows software, unveiled in 1983, didn't take off till 1990, long after many rivals had written it off.

The Microsoft ad campaign that began in November will be the largest in the history of software, the start of a commitment to consumer advertising from a company previously reluctant to spend money on TV advertising.

This time, no one discounts Mr. Gates' resolve to turn Microsoft into a household name by making "a major investment" in consumer advertising "over a period of years."

Mr. Gates is constantly selling, spending a third of his time out talking to customers and prospective customers.

Next month, he'll deliver the keynote at the giant Consumer Electronics Show-precisely the place homeward-bound Microsoft wants to be-and start writing a twice-a-month syndicated newspaper column.

Later next year, he'll publish what's likely to be a best seller, "The Road Ahead," about the information superhighway on which Microsoft is making numerous bets. Mr. Gates is working with Tom Brokaw on an NBC documentary to accompany the book.

"What marketing is about is communicating, and Bill is a great communicator," says Gordon Eubanks, president-CEO of software marketer Symantec Corp.

Listen to one of Mr. Gates' speeches, and it's hard to avoid being swept up by his vision. He is a charismatic, enthusiastic presenter, making his major speeches with no script. His disheveled appearance and endearing exclamations-"Neat!" "Super!"-are the real thing.

With his oversized, often smudged glasses, Mr. Gates seems to have almost perfect vision, if vision means seeing his ideas take hold as the industry standard.

"Having a vision is one thing," Mr. Gates told Ad Age. "Understanding technology's another. But you don't know what to build unless you have a sense of other areas. The ideal is where you have one person who loves to go to computer stores, see how things are going on, talk to customers and [then] sit down with the engineers and say, `Can we do this? Shouldn't we be figuring out how to do that?' That's where the leverage is."

Explains Jesse Berst, editorial director of Windows Watcher: "He has the ability to go out five years, see where things are going and take steps to participate."

In describing Microsoft Network, an ambitious online service due next year, Mr. Gates talks about how families spread around the globe will communicate easily through electronic mail. Such rivals as America Online today trumpet feats like surpassing 1 million subscribers; Mr. Gates would rather talk about building a service for the masses.

Mr. Gates is an expert at making market successes of good ideas, whether they're home grown, acquired or borrowed.

"It's not that you don't innovate," Mr. Berst says. "It's that you don't reject an idea because you weren't first to think of it."

Critics, though, are quick to suggest Mr. Gates has had few original ideas, noting that he bought what would be the basis for his first hit, MS-DOS, and that Windows is still catching up to the innovations of Apple Computer's Mac-intosh.

One computer retailing pioneer, Inacom Corp. Chairman Rick Inatome, says Mr. Gates isn't a techno-visionary in the sense of Apple co-founder Steven Jobs, but he readily agrees Mr. Jobs is not a successful marketer in the same sense as Mr. Gates.

PC marketers grumble about his hardball business tactics, including price increases in the new Windows 95 operating system. But they accept the terms or risk missing a market turn when Microsoft introduces the product next year. Applications rivals Lotus Development Corp. and Novell are fast working on versions of their products for Windows 95, helping ensure it becomes the new standard even as they acknowledge that Microsoft will beat them to market with new spreadsheets and word processors.

Mr. Gates' hard-charging ways could backfire. Regulators are looking closely at Microsoft's plans to buy rival Intuit, and could raise questions about the packaging of the Microsoft Network with Windows 95.

At Microsoft-and in public-Mr. Gates can erupt in ferocious verbal assaults if provoked; he often comes across as sarcastic, impatient or arrogant. Yet his management and marketing strengths overshadow any weaknesses.

Mr. Gates is so smart, capable and focused that it's easy to follow the leader.

"Business, marketing, technology are all things that fascinate me," he says. "So definitely being interested and excited about these different areas has been key in how I do my job. I say business is pretty easy, and good marketing isn't super-complex. Technology is the deepest of the three."

He isn't exactly in the mainstream. For years, he refused to own a TV set, fearing it would take time away from his voracious reading. He's plowing millions into a tech-laden estate near Seattle, splurging on Da Vinci works and meeting with Hollywood moguls.

Mr. Gates is married now, to Melinda French, a marketing manager in Microsoft's consumer division, but that hasn't altered his singular focus on driving the company. Still, he insists he's "not completely out of touch with TV, but I'm no expert either. Don't ask me what [happened on] the latest episode of `Melrose Place,' who slept with whom."

Do ask him what's new in The Economist, his favorite magazine.

One on one, Mr. Gates is a careful listener, cordial if spoken to cordially, willing to talk to all comers. The much-feared, much-revered Gates walks around with no apparent bodyguards and often with no aides. He's the democratic CEO, flying coach, eating Big Macs and taking home a comparatively paltry $457,545 in salary, bonus and long-term compensation last year.

"If Bill Gates weren't Bill Gates, [anyone] could like this guy," says Gary Beach, president of Computerworld. "There's a personal quality that doesn't get talked about a lot because he's either in your face doing a deal, or he's buying a competitor, or he's dropping prices."

Observers laud Mr. Gates' ability to recruit smart people and let them do their jobs. Mr. Gates' most important management skill is "just utter obsession with hiring the very best people," says Mr. Berst.

"It is a remarkable organization," agrees David Coursey, editor of P.C. Letter. "And it's mostly because of the emphasis on smarts throughout the organization."

Mr. Gates leaves oversight of sales, marketing and advertising to Exec VP Steve Ballmer, a 14-year Microsoft veteran and one-time Procter & Gamble Co. assistant product manager. While closely involved in some marketing communications issues, especially PR, Mr. Gates largely delegates advertising.

"Marketing is a lot broader than advertising," he notes, though admitting to occasional meddling in advertising creative concepts-the result of "this e-mail system we have and an active mind."

Mr. Gates has crafted a non-traditional style as CEO in which he largely delegates major corporate issues, like picking an ad agency, while personally weighing in on seemingly small matters, like the look of a screen icon. Key products go through a "Bill review" before they go out the door.

Since starting Microsoft 20 years ago, Mr. Gates has been forever expanding his target audience in step with growth in the computer market.

He's taken Microsoft from computer languages to operating systems, and then from business applications like the Word word processor to consumer products like the Encarta CD-ROM encyclopedia.

Over the years, Mr. Gates has advertised heavily in computer publications, to reach the key purchase influencers, and then in business publications, to reach the broadening market of computer users.

"Word-of-mouth is the primary thing in our business," Mr. Gates says. "And advertising is there to spur word-of-mouth, to get people really talking about `the latest thing.'*"

With the home PC market exploding, Mr. Gates is making another calculated move to build the Microsoft brand among consumers. In his vision, computers will be ubiquitous-as will Microsoft.

The reason for the broader branding campaign, he says, is that outside the computer industry, consumers still don't know the difference between hardware and software.

"What we wanted people to think is how exciting software is, how it's advancing, and how there's one company leading the way with a lot of great products," he says of the advertising.

He and Microsoft are taking on a full plate in 1995 with Windows 95, Microsoft Network, Intuit, numerous new business and consumer software products, and no doubt more initiatives in interactive technology.

But Mr. Gates disputes any suggestion this might be too much at once.

"I think we're more on top of the stuff we're doing next year than we ever have been on anything," he says.

"There's all sorts of risks and challenges, and there will be surprises that come with it. But we're pretty organized, pretty focused.

"We're just a software company, and every year we learn more and more about how to build great software."

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