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Microsoft holds talks with London agencies to discuss future of advertising and “continuous monetisation” strategy

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By Jessica Davies, News Editor

September 24, 2013 | 5 min read

Microsoft has been in talks with London-based agencies over the past week to gauge a deeper understanding of marketers’ requirements, which it will then feed back into its next ad platform iterations.

Speaking to The Drum, Greg Nelson, general manager of display advertising at Microsoft, said the internet giant had "closed the door” on the era of online banners and buttons, and was instead inviting agencies to work more closely with it to create rich, cross-device experiences that aid, rather than protrude on, consumers’ digital journeys.

“We are moving into era where we can connect consumers and marketers in the right way at the right time, as a result of our data insight, rather than bombarding them with ads. It will be a long time yet before that kind of untargeted, unhelpful advertising is fully over, but we won’t be the ones driving it, we will be trying to drive beyond it,” he said.

Nelson said Microsoft was now aiming to “reinvent advertising”, and it was this new way of connecting marketers and consumers more seamlessly and less intrusively, which has been the subject of its talks with agencies in the capital this past week, according to Nelson.

“What is the future of advertising and monetisation? This is what we are here to discuss with some of our key agencies and clients to get their vision of the future and share our ideas, keeping the dialogue going as we are at that stage in our planning cycle for the next ad platform releases, where we will want to go pretty deep with large agencies and advertisers to understand what brings value to the market.

“We are seeing increasing convergence of search and display, and the various, more siloed experiences we have had from different services are now coming together.

"You see in Windows 8 and even more in Windows 8.1– this rich canvas on which marketers can paint. We’re trying to connect the dots along the consumers' decisions and journeys – to understand the needs different people have and where they are in trying to accomplish the tasks they need to in their lives – then find the appropriate way to connect them to brands and marketer experiences at the right moment,” he said.

Microsoft has been developing a “semantic” search experience for the past year, creating an alternative search experience to a list of blue links. This is being manifested particularly well on its tablet devices using Windows 8.1, with Bing serving images and information beyond the blue links that have traditionally formed the bedrock of search marketing.

“The search experience is not just about blue links anymore. We can now create a rich canvas using thumbnails and curating key terms to serve different kinds of information beyond just the links, giving people the same experience across all devices.

“If I type a commercial search term that then becomes an interesting marketer opportunity. We believe we can reinvent not just search but the way things are done around it,” he added.

Also speaking to The Drum, Owen Sagness, Microsoft’s new general manager for advertising and online for the UK, said the business had reached an “inflection point”, which has interesting implications for its advertising strategy.

“We are moving from being a software company to one that sells an integrated stack of devices and services. You can see that in what we have done with the Surface and the proposed purchase of Nokia. And we think it’s therefore particularly important for consumers to have that integrated offering,” he said.

Market trends are leading towards a “continuous monetisation” approach in which Microsoft is itself becoming more “joined up” to help deliver, according to Sagness.

“We are seeing more consumers use multiple devices and we can create rich experiences for the marketers that want to reach those consumers across all those devices. We can connect that up to what they may be able to do in a retail store for example.

“Once you get consumer in-store we can use our back-end tech to create immersive experiences. So for example if you want to remodel your kitchen, we can create an experience where someone can take a picture of it, put on the Xbox, perhaps use the smartglass technology to manipulate the image, so you maybe end up with a half-finished design.

"You then take it into a retailer, load it up on their system and work with an agent there, complete the transaction in-store, and then store the buyer’s preferences and store that in the back end so you can close the loop in terms of how you continue the relationship with that consumer. So Microsoft is becoming much more joined up – up and down the stack and across the devices.

Sagness replaced former general manager for the UK Andy Hart, who was promoted to VP of Europe this summer. Previously Hart told The Drum the marketing industry needed to “take responsibility” and avoid bombarding people with advertising across all devices, or risk “consumer revolt”.

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