How Perks Now Impact the Online Advertising Business

Thoughts on the Addictive Nature of the View From the Box Seats

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Yeah, I been in The Show. ... You get white balls for batting practice. The ballparks are like cathedrals. Nobody handles their own luggage in The Show. Somebody else carries your bags. It was great. The hotels all have room service. And the women all have long legs and brains!"
-- Crash Davis, "Bull Durham"
~ ~ ~

If there's ever an unlikely juxtaposition, it would be a pairing of the company Microsoft with the concept of minor leagues. But it's what came to mind as I sat in a convention center on the tech giant's Redmond, Wash., campus. Not that Bill Gates was a minor-league player, but rather that the online-advertising business of which Microsoft is a part had successfully made the transition to the major leagues of media sales, complete with the swagger that attends life in the bigs.
Microsoft CEO Steve Ballmer speaking to ad executives at the Strategic Account Summit. ALSO: Comment on this column in the 'Your Opinion' box below.
Microsoft CEO Steve Ballmer speaking to ad executives at the Strategic Account Summit. ALSO: Comment on this column in the 'Your Opinion' box below. Credit: AP

700 ad execs
Microsoft and its MSN had shipped in some 700 advertising and agency executives to its awkwardly named Strategic Account Summit, a three-day event on the future of media. The company pulled off a careful balancing act with an agenda that alternated between inspirational speeches and soft sales pitches, celebrity sparkle and product demonstrations.

Sir Ken Robinson on unleashing inner creativity was followed by corporate VP Blake Irving on the wonders of AdCenter. Donny Deutsch asked for a peek into Bill Gates' wallet (turns out he doesn't carry one), then Steve Ballmer tried to slide his hand into advertisers' billfolds. At night, we ate rich foods and drank nice wines. (Full disclosure: I attended the event as a speaker and Microsoft picked up much of my costs.)

It was interesting content. And it was good business.

Three-martini lunch
We've accepted conventional wisdom that the age of the three-martini lunch is long past, and thank goodness for it. We live in a time of cold-eyed adherence to the bottom line. Results trump relationships. But it's not really the truth.

If it's all about ROI, why do open bars and goodie bags stuffed with swag so excite media planners' senses? If who you know doesn't matter, why can't anyone get on your calendar for breakfast or lunch through the end of June? The answer is simple: Relationships do matter, and media sellers, for better or worse, have perfected the art of the schmooze. They take clients to spas not for friendship, but because they want a greater share of their ad dollar. (There, I've said it.)

Microsoft and its online competitors now spend millions of dollars entertaining advertisers-and getting a message across in the process. It's a trick of the trade they've learned from the TV networks and publishing houses, one they needed to compete.

The perks
I still remember my naive surprise when a top Web publisher told me off-the-record tales of heavyweight ad execs who refused to take the Internet seriously until they realized they could do business with the online guys without sacrificing the perks -- the Super Bowl tickets, steaks-and-cigars dinners and golf outings -- they had grown so accustomed to.

In their minds, the free tickets apparently represented a peculiar sort of validation that the online sellers belonged in the same ballparks as the broadcast nets -- who will spend millions this very week on extravagant upfront presentations and celebrity-studded parties that amount to their own wallet grabs.

While it's easy to criticize the seeming shallowness of corporate entertaining, there's another school of thought, where the true value isn't in the box seats, but in the relationships forged and trust that develops in informal settings and the opportunities to swap glimpses into each other's minds, strategies and business needs. I buy it.

But -- bottom line -- the view from the box seats is addictive, and it's a cost of doing business no one wants to question too closely.
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