Microsoft Poaches From Publicis for New U.S. Sales Chief

Bob Bejan Returns to Company to Fill Role Vacant Since Keith Lorizio's Departure

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Bob Bejan
Bob Bejan

Microsoft finally has a U.S. sales boss, eight months after it ousted Keith Lorizio.

The tech giant has tapped former Publicis exec Bob Bejan to permanently fill the role, which has expanded its jurisdiction to all of North America.

As Microsoft's VP-North American sales and marketing, Mr. Bejan will oversee sales for the continent, manage relationships with media buyers and develop new opportunities for advertisers in hopes of improving Microsoft's market share. He said the role's expansion to include all of North America will allow him to do things like experiment with new ad products in Canada, which he described as "a great test market with applicable parallels" to the U.S.

Microsoft's advertising division sells ads across its Bing search engine, Outlook e-mail client, Skype messaging service, Xbox gaming console, Windows operating system and the recently revamped MSN portal.

A former Microsoft executive who joined the company in 1996, Mr. Bejan led ad sales and programming for the company's online properties including MSN among other roles he held during his six-year tenure. He left in 2002 to co-found a digital marketing firm that Publicis acquired in 2008 and situated within its public relations network MSLGroup. Mr. Bejan was eventually named MSLGroup's chief development officer, his most recent position before leaving to rejoin Microsoft now.

Once Mr. Bejan starts at Microsoft's New York office on Oct. 27, his first task on the job will be reaffirming Microsoft's commitment to advertising with media buyers.

"I think the need is making sure people understand how serious Microsoft is about the ad business," he said.

Listening tour
Mr. Bejan plans to spend the first 45 to 60 days on a listening tour during which he'll meet with advertisers and Microsoft employees to understand their perception of Microsoft's advertising business and address any concerns.

"That's kind of job one: making sure on that tour that as I listen I'm making sure people understand that we're here and we're for real and we're committed to developing not only great solutions that work today but also out-of-the-box solutions that work for tomorrow," Mr. Bejan said.

While still among the industry's top digital ad sellers, the profile of Microsoft's advertising business has shrunk and its market share has stagnated in recent years as the tech giant has faced questions over advertising's role at the company and as Google and Facebook have taken control of the market.

Some of those questions came when the company announced a search alliance with Yahoo in 2010. As part of that deal, Microsoft's search-ad sales efforts were limited to self-serve tools while Yahoo handled direct sales for both companies' search engines. That may have protected profitability -- instead of staffing a large, dedicated team of search sellers, Microsoft's ad sellers would only be tasked with pitching its search-buying technology. But it likely hampered the company's ability to upsell bigger-spending advertisers on Microsoft's other ad-supported services.

Microsoft's online advertising revenue rose 14% year-over-year to $497 million in its most recent fiscal year that ended June 30, thanks to a 39% search-ad revenue jump. However the company's revenue from display advertising fell by 25%.

Holding steady
Microsoft's share of worldwide digital net ad revenue has held steady between 2% and 3% for the past few years, according to eMarketer projections. That's better than fellow longtime online ad giants Yahoo's or AOL's dwindling shares, but arch-rival Google continues to dominate at a consistent 31% share. Relative upstart Facebook will climb to capture 8% of the market this year.

Microsoft's display-ad business has grown increasingly insular over the past few years, which may be to blame for its declines.

In 2011 Microsoft announced a pact with Yahoo and AOL to pool together whatever display ad inventory from their respective portals wasn't sold directly. As a result, brands looking to programmatically buy ads on MSN didn't necessarily have to use Microsoft's ad-tech tools to do so.

Microsoft still runs an ad network and exchange -- powered by ad-tech firm AppNexus, in which Microsoft has an investment stake -- to sell ads on others' sites, but the company's ad-tech business isn't as big as it once was.

Two years ago the company took a $6.2 billion write-down related to its 2007 acquisition of ad-tech company aQuantive. Last year Microsoft sold its ad serving business Atlas to Facebook, which is now at the heart of the social network's bid to wrest Google's firm grip on the ad-tech landscape.

And this year Microsoft shuttered Xbox Entertainment Studios, which was developing original shows for the company's gaming console. While Microsoft never publicly committed to supporting those shows with ads, its executives presented the programming slate at the Digital Content NewFronts in the spring and planned to further pitch the content to advertisers. The sudden about-face led to trust issues with advertisers, as The Wall Street Journal reported at the time.

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