Microsoft readies internal overhaul

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Microsoft Corp. this week is expected to finalize plans for a reorganization of its corporate advertising group in an attempt to streamline an "unwieldy" decisionmaking process.

The revamp comes as Microsoft approaches the one-year mark after consolidating its estimated $350 million U.S. ad account at McCann-Erickson/A&L Worldwide, New York and San Francisco. The agency handles advertising for the software giant's corporate brand, MSN Internet service, Windows 2000, PC games, and last week acquired the $100 million assignment for its forthcoming X-Box videogame console.


The changes will centralize Microsoft's advertising and marketing functions in an attempt to streamline its relationship with McCann. The move is expected to give Mike Delman, general manager of advertising, and members of his team more authority, according to one person familiar with the situation.

Creation of new posts, promotions and changes in the reporting structure also are possible. Company executives didn't return phone calls seeking comment by press time.

Microsoft and its agency of record have fired off two significant campaigns in recent months, one for Windows 2000, the other for MSN. New corporate brand creative began airing during NCAA basketball tournament broadcasts. With more new ad campaigns and marketing initiatives in the pipeline, Microsoft wants to shorten the time needed to get a campaign out the door. For example, one recently deployed effort included participants at nearly every level of responsibility -- from product managers all the way up to general managers. "There were lots of little fingers in the mix," one person close to the process said.


The changes also come amid growing dissatisfaction among some Microsoft division heads with Zentropy Partners, Cambridge, Mass., an amalgamation of various interactive shops under the Interpublic Group of Cos.

On the interactive front, Microsoft also works with Avenue A, Seattle, and White Horse Studios, Portland, Ore.

Microsoft is poised to award additional projects on a case-by-case basis to still more interactive shops, one of which is said to be DDB Digital, New York, said an executive close to the situation. DDB Digital already works on Windows 2000 assignments; last week, sibling DDB Worldwide, Hong Kong, picked up Microsoft's Asian Windows 2000 business.

Microsoft's fiscal year ends June 30, and it's well into the planning process for 2001. But before year's end, Microsoft will continue a $30 million corporate brand effort showing the human side of its technologies. One upcoming spot shows Microsoft products and services enabling families to create a better learning environment for their kids.

Ads for the company's Windows CE-based Pocket PC device debut in a couple of months, in conjunction with hardware brands such as Compaq Computer Co. and Hewlett-Packard Co. Meanwhile, a marketing push for Windows ME, successor to Windows 98 second edition, is due in August, emphasizing multimedia capabilities.

Contributing: Bradley Johnson.

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