Speaking to the 1,200 attendees in a packed ballroom at the Association of National Advertisers conference at the Arizona Biltmore Resort & Spa in Phoenix, Microsoft CEO Steve Ballmer's opening keynote pushed a long-range vision of the future at a time when most chief marketing officers' tenures last only two years. (See video excerpt.)
All media will be digital
"Within 10 years, no consumption of anything we think of media today -- print, TV -- will in fact be delivered over IP, internet technology, and will all be digital," said Mr. Ballmer, who noted he spent two years as assistant brand manager at Procter & Gamble before spending his last 27 years at Microsoft.
"Everything you read, you will read on a screen," he predicted. He must have sensed some skepticism in the audience, perhaps from folks from the Magazine Publishers of America. "What if in 10 years we can give you a screen that's this light, this manipulable," he said, pulling a sheet of crumpled paper from his pocket. "That's what hardware will permit over the next 10 years."
Microsoft's bet on the future of advertising has been heard before, specifically five months ago at Microsoft's Strategic Account Summit. This, however, was a much larger audience and one not necessarily as digitally versed as the one the company speaks to at SAS.
He used his keynote platform to present Microsoft's big play into advertising: Microsoft as a platform. He talked about the effect of targeting and delivering ads, and said that in a digital world those things can be improved by software, which is of course something Microsoft knows a little about.
Buying audience by context
The platform has publishers, website owners and content creators on one side. On the other, advertisers. In Microsoft's vision of the future, marketers will be able to use rich online software to buy audiences based on context, demographics and behavior, determine the best placements of ads and what kind of pricing models work best, and then optimize campaigns based on real-time feedback. He suggested there will be two or three of these kinds of platforms on the web and that $550 billion in advertiser dollars will eventually flow through them.
"I'm a big believer in advertising as a business model for everything that happens online," Mr. Ballmer said. "The opportunities to create interesting dialogue with consumers will grow."
Mr. Ballmer addressed agencies' roles in a purely digital media environment. (Microsoft does own an agency now, Avenue A/ Razorfish.) Agencies will be a "source of counsel on marketing mix and source of creative thinking," he said. Their role "maybe even expands ... as the range of options and choices will continue to expand."
Improve corporate sites
As to what advertisers should think about tomorrow vs. the long term, Mr. Ballmer suggested they were under-investing in own destination websites.
"We happen to have the most popular corporate website in the world, not only for marketing but as a place for customer service," he said of Microsoft.com. "Every interaction becomes a marketing opportunity. Think about corporate or brand-building websites as a place to tell and interesting story in the here and now."