Microsoft’s broad portfolio of products means it has interests in search, gaming, smartphones and entertainment – as well as its dominant brand of office software.
As VP of Microsoft advertising for EMEA Laurent Delaporte is tasked with trying to coordinate a coherent ad sales strategy across all these diverse and evolving platforms, which is no mean feat.
Three of his portfolios – Xbox Live, MSN and Bing – have been revamped in recent months to make them more attractive to advertisers.
MSN has been redesigned with a new focus on channels and original content, Xbox has evolved from a games machine into an all-in-one entertainment hub and Bing is now part of the Search Alliance with Yahoo.
So what do these changes mean for Microsoft’s advertising platform?
We spoke to Delaporte to find out how the changes will affect users and ad customers alike.
How will the Search Alliance affect the way Bing and Yahoo deliver results?
“The deal means that Microsoft is taking over the hardware side of the operation, so we are delivering search results for both platforms.
But both Bing and Yahoo can innovate in the graphical interface, in terms of how the results are displayed.
And what you will see is that Bing will evolve more and more to focus on trying to provide a relevant answer the questions you have formulated.”
“We are trying to get to the point where we provide a specific answer to the question – so if you just type Microsoft then based on the history of your search queries we should know whether you mean Microsoft products or maybe Microsoft’s stock.
Then we should present that in the first few lines so you have the answer to your question rather than having to search through all the links.
Now that is a big task as something like Microsoft is perhaps too big a search term, but we believe we have a number of techniques to make it work.”
How will the ability to track a user’s search history be affected by the new EU cookie law?
“I think the EU is trying to create a level of transparency on exactly what data websites are collecting, and provide users with the ability to control what data is collected.
We obviously are very careful about privacy and we have actually said that we want to be the most conservative company with regards to privacy.
But that doesn’t mean we don’t want to collect some data, because with search for example we know that users want us to remember their search history, and with advertising we know that people look at advertising more positively when it is relevant to them.
But everyone wants to know what kind of data you collect, and that’s why we participate in AdChoice – which allows a user to know what data is collected.
We all know that it is a pain having to type in the same data into forms each time, so it is about finding that right mix.”
How will the Search Alliance affect how marketers bid for keywords?
“All companies will access the same tools for bidding on keywords, so the pricing is the same whether you come through the Microsoft interface or the Yahoo interface.
Today it’s a good bargain as our ads reach a lot of people but we have fewer bidders, so the average price for a keyword is a bit cheaper and that means a better ROI for our customers.”
From your point of view, what is the motivation behind the Alliance? Is it to consolidate your place in the market or to try and take market share from Google?
“We are investing in search because we are convinced that we can gain market share against Google, and you can see that in the US we are making some progress, although it is slow.
In the US Microsoft and Yahoo combined have around 30% of the market and an opportunity to gain share.”
“In Europe the cumulative share for Microsoft and Yahoo is much smaller so it will take a little bit more time to displace Google.
We estimate that in Europe Google has over 90% share of search traffic which in the European Commission’s view is a bit high.
And if you look at the press reports it’s clear that the Commission is building up a case to really understand what is going on there.”
What is your tactic for building market share in Europe?
“The tactic is first to have a good product, which we currently have in the UK and France – and are looking to build that up in the
Now to ensure we deliver the most relevant search results we need to drive a huge volume of queries, and to build that up we will leverage our MSN asset and make sure people get exposed to Bing’s capabilities.
We will also leverage our Windows Phone asset which has an integrated search button that links directly to Bing.
Central to our approach is building up the local relevancy of search results, so if you search for a restaurant you are given relevant local results presented directly on a map.”
The MSN homepage was redesigned to focus on channels recently, how has that affected the way you sell the product to advertisers?
“It’s something we have introduced to the US and the major markets in Europe, and in those markets we have millions of people who come to the homepage everyday.
No matter what advertisers say I think they are mostly still buying on reach – they want to reach as many people as possible with their ads.
So if you launch a new car or film, advertisers always want to splash it out to the world.
Then the next stage is to target it to the right people, and that’s where channels are relevant, as if I have something like an insurance product it doesn’t make sense to put it everywhere.
For us the channels have another critical function as we really want people to come to MSN to as a central location for all the content and information they are interested in.
So we can present that latest news, fashion or lifestyle content that people want to hear about.”
How important is the new original content on MSN as an ad sales tool?
“I think that after reach, advertisers value context and quality of content.”
“If you want to acquire or interest the key brands, it’s normally premium brands that want to engage with a premium audience.
So for us it is important to have a quality product that interests the right sort of people.”
You also revamped your MSN iPad app. How important are video ads to the iPad app and your strategy in general?
“In terms of advertising, what brands really want to do is create engagement and interaction between themselves and the user.
I think the challenge is to create an emotional connection within that.
Although video advertising can create very immersive it doesn’t yet allow you to interact with the audience, so that is the next step.
Soon we will have the ability with Xbox Kinect to allow users to interact with an ad and interrupt the video ads to ask for more information or buy the product – this is something we are looking to bring to our other platforms as well.”
“Obviously Xbox is now our biggest investment in terms of entertainment as it is no longer just about gaming – it also has video on demand and other video solutions.
So video ads actually fit more naturally on that platform.”
How big an opportunity is Xbox going forward for you in terms of advertising?
“Advertising in-game can make a game even more realistic. If you’re playing football or F1 games you expect to see ads in the stadiums or on the cars.
We still have the technology to get real-time updated ads in the games but we have put that on standby because the ROI was fine for the advertisers but not for us – meaning that it wasn’t a big money making activity.
It’ll come back, we’re just looking at fine tuning the model and increasing the volume.
It generally only works for sports games, as brands probably don’t want to be associated with ‘shoot ‘em ups’.
But brands are very keen to be associated with sports as it is often a relevant audience.”
Does Xbox allow you to compete with the likes of Samsung in the connected TV market?
“We have more than 40m people who connect their TV to the web with an Xbox, which I think is by far the biggest connected TV network.
We would never position it that way as we do not distribute content – although we do now have distribution partnerships with Sky, Canal+ and others, but it’s still not our content, we are just making our distribution channel available to them.
We are very keen to continue to do that and now have more than 50 partnerships in Europe.”