Microsoft blurs line between performance and brand KPIs to spur ad sales

Microsoft is shifting the way it sells campaigns to advertisers to encourage insights over product in a model aimed at balancing performance with brand-building targets.

Partnership is an overused term in the marketer’s lexicon, according to Stuart Flint, UK sales director at Microsoft Advertising, but it’s the only word that will do when describing an approach that is no longer about “flogging ad space”. Ambitious advertising targets are still the priority though it is the way Microsoft achieves them that is being flipped on its head, in order to bolster how it tracks people across devices and products.

Whereas the bulk of Microsoft’s advertisers want to drive performance off the back of MPUs and billboards, there are those increasingly willing to plan around audience insights. Speaking to The Drum, Flint said its conversations with advertisers are now the “reverse” of what went on before last June when the business was still positioned around devices and services.

Seven months into its transformation to the “productivity and platform” company for the "mobile-first world", advertisers are starting to take note of the depth and breadth of targeting across products such as Xbox One, Skype, Outlook, MSN and Bing.

Blurring the line between performance marketing and brand marketing

“It’s less about the product now and more about our audience and how we leverage to clients,” said Flint. “We’re on this very interesting evolution within our advertising department but it’s not just the sales department. It’s the delivery team. It’s the analytics team. Everyone has input into this.”

The broader offering sits on a four-legged stool that allows an expert in one of six verticals to pull on specific data, while also calling on creatives who understand how to talk to that specific audience.

“Consequently, the agency is much better equipped with information to pitch these bigger ideas in a clearer way to advertisers,” claimed Flint. “We can create brand campaigns all day long but actually what’s the influence in that for the consumer to interact with the creative format. Performance becomes really important here. It’s about balancing both the campaign and performance side of things.”

These shifting campaign metrics are evident in Microsoft Advertising’s most recent campaigns for the likes of Honda, Fiat and Marriott Hotels. Most notably, the company’s festive tie-up with John Lewis (see above) is the clearest example of its vision for future campaigns, one that Flint claimed “wasn’t really commercially based” and more about “seeing Christmas through the eyes of a child”.

“That idea and the use of technology that we’re creating greased the wheels of commercialisation for us,” he added. "There are so many projects that we’re working on right now where that has become the semi-blueprint for the way that we work with customers.”

To fully exploit the blurring lines between performance, innovation and technology, Microsoft knows it needs to educate advertisers on how to get positive information for data exchange.

Positive information for data exchange

“The breadth of Microsoft’s devices and services means that we have a unique understanding of consumer behaviour and this insight is central to how we deliver campaigns for clients,” said Flint.

It also means that the company has a job on its hands convincing brands to understand how they communicate the value of exchanging data to customers. If the company’s Cortana personal assistant knows that its user likes James Bond movies for example, then should they pass a cinema it would know to send a notification if there are premium tickets on offer.

“Cortana’s telling me that because there’s a data exchange there,” said Flint. “I understand that by sharing my information with [the film’s distributor] Sony then I can get a very true value exchange.”

This hyper-personalised world may be getting closer to execute at scale for advertisers but the majority of people aren’t quite ready to let go of their intimate data.

More than half (58 per cent) of UK consumers want to be able to choose how long information they share stays online, according Microsoft’s Global Digital Trends study of more than13,000 consumers in 13 different markets. Since the first report two years ago, the number of people who have never used tracking apps or devices has dropped globally from 38 per cent in 2013 to 28 per cent in 2014. However, less than a fifth (15 per cent) of UK consumers are currently using it to optimise performance.

This apathy toward data sharing is compounded globally. While 74 per cent of global consumers are already aware of services that manage online information, just 18 per cent are currently using them. Some 75 per cent of global consumers said it’s important to them that brands give them the option to delete their data or choose how long it stays online. It is a similar trend across all consumer segments, pointing to the universal need to “own” one’s digital information, the report found.

Purposeful serendipity

Consumers want to take control and shape their digital experiences, according to the report. Nearly a third (31 per cent) of global consumers said they would like to be able to learn more about customisable services. Some 46 per cent of UK shoppers revealed they are much more likely to buy from companies which allow them to shape their products or services.

It reflects the scale of the challenge Microsoft and its advertisers face in encouraging people to part with their data. The company has drawn up a four-leveled pyramid it needs to push users up to the top where the customer fully understands there’s a clear trade between sharing their data and getting a service in return.

“We’re at the start of this journey,” said Flint. “The research we’ve done will help our thinking in terms of how we help marketers get further up that pyramid to make them truly understand the behaviour they should be having with consumers and what the value exchange is to them.”

For Microsoft, the chance to create sprawling, personalised campaigns across its products is an opportunity to put a premium on mobile advertising, which generates significantly lower ad revenues compared to desktop.

“People understand that those devices are connected now and that can influence the way we share our data,” said Flint. “[Advertisers] can’t keep taking from people [when it comes to data] they need to be clear on what the exchange means for them.

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