Q&A: MSN Extends Leadership in Europe

Judy Gibbons, Vice President, MSN EMEA

LONDON, March 28, 2002 — Marketing in Europe is no easy task. Consumer tastes, language and cultural preferences can change within a few hours’ train ride. Marketers of Internet services and resources have the additional challenge of the non-stop barrage of information carried by the Web.

Despite the challenges, MSN, Microsoft’s global network of consumer Internet services, has done very well in the complex European community. Not too long after its initial launch in late 1995, MSN UK overtook Yahoo! as the top-rated Internet destination site in the United Kingdom. In early 2001, MSN became the No. 1 consumer Internet destination in Europe.

It has since built on its lead. MSN is now the No. 1 consumer site in eight European countries, according to February 2002 reports by Jupiter MMXI and Nielsen//NetRatings. MSN attracts more than 34 million users per month in Europe, and has grown more than 53 percent between February 2001 and February 2002. While competitors such as America Online and Yahoo! report revenue declines in a down online-advertising market, MSN has shown consistent revenue growth.

The Wall Street Journal Europe suggests one of the reasons for this success. Judy Gibbons, vice president of MSN in Europe, Middle East and Africa (EMEA), was hired by Microsoft from Apple Computer in 1994 to launch MSN in the United Kingdom. In January 2001, Gibbons was promoted to her current position. The service’s growth, both in reach and in ad revenue, led the Journal to list Gibbons in a February article, “Europe’s 25 Most Successful Businesswomen” (access to the site requires paid registration). Gibbons was the only honoree from the Internet-technology industry.

In a conversation with PressPass, Gibbons said MSN is poised to take an even larger role in the lives of the EMEA region’s consumers. One of MSN’s greatest strengths, she said, is in providing locally relevant content and services to suit the complex cultural jigsaw puzzle that makes up the region. MSN will look to broaden the array of Microsoft software-enabled services available, including offering subscription services such as the recently introduced MSN Extra Storage, as well as ways to take advantage of the European fondness for mobile phones.

PressPass: Describe your role with MSN EMEA.

Gibbons: I’m primarily responsible for making sure MSN delivers world-class services and local content to European, Middle Eastern and African consumers, making it useful and appealing to the tastes of consumers in each of the 19 regional markets. I oversee and lead a team across EMEA that includes product development, programming, operations, marketing, business development and a sales team focused on online advertising and promotion.

In addition, Im responsible for the business leadership side of delivering a compelling service that enables advertisers to build close, intimate relationships with their customers and their brands via the Internet. I make sure MSN initiatives, such as MSN Advantage Marketing, are delivered in a way that is appropriate and appealing for European media buyers and online marketers. Our clients include large companies like Volvo, Daimler Benz, Nestle, Heineken, and many others of that size and scope.

From a strategic standpoint, I’m also responsible for maintaining our strong position in Europe and keeping ahead of competitors such as America Online, Yahoo! and some very strong local and regional European competitors.

PressPass: What is MSN’s strategy in EMEA and how does it compare to MSN’s overall strategy?

Gibbons: Our EMEA strategy is complementary to the global MSN strategy: to make the Internet useful and relevant to consumers in their everyday lives. That entails delivering a first-rate online product that combines strong local content with services such as MSN Hotmail, MSN Messenger and MSN Search.

The fundamental difference between the global MSN sites is content offering, which differs by region. In the United States, MSN partners with U.S. content providers, while in France, for example, we use French content providers. The key to success is providing local content. Another difference is that in the U.S., MSN offers internet access directly to consumers, whereas we do not in most regions outside the U.S. In Europe, for example, MSN does not actively operate its own ISP business, but we are keen to work in partnership with local telcos such as ISPs, and with local content partners and verticals.

A key point for us is to demonstrate the advantages of Microsoft’s software heritage, which means Microsoft can develop and deploy some of the best services on the Web, such as MSN Hotmail or MSN Search. Part of our heritage, which is a really important factor for Europe and internationally, is localization ability — a great example of this is MSN Messenger, which is available in 26 languages. When MSN Messenger is upgraded, it’s upgraded in all languages, so no consumers are forced to wait for access to the upgrades they need.

PressPass: How has MSN differentiated itself from the competition in EMEA?

Gibbons: None of them can provide the services that MSN can, with services such as MSN Hotmail, MSN Search and MSN Messenger. Most internet players who enter the online industry in Europe come from a background of telco-access or vertical or content .This means that while many of the other incumbents compete against each other, we are in a unique position of being able and open to partnering with best-in-class local players in each country in the content, verticals and telco space with universally appealing services.

MSN is not trying to be a media company. We’re focusing on useful software and services rather than content and media. Our services are attracting a more valuable audience, which is attractive to our advertisers.

Advertisers are also attracted to the idea that MSN is a “reach” business internationally. By that, I mean MSN is primarily a portal, not an ISP in many international markets, and therefore is accessible by virtually anyone who has access to the Internet. And because we have the greatest reach — over 270 million consumers worldwide each month — we’re attractive to pan-European advertisers.

PressPass: What kind of opportunities do you see for MSN in Europe, the Middle East, and Africa?

Gibbons: One area in which EMEA has shown a lot of progress is in the mobile space. We’re taking advantage of the high use and popularity of mobile phones and SMS (short messaging service).

Microsoft’s mission is to empower people through great software any time, any place and on any device. That’s what MSN is doing, and that’s where MSN EMEA has been shining recently. A great example is MSN Hotmail SMS service over the mobile phone. Users can receive alerts from their MSN Hotmail accounts when new e-mail arrive, and they can read, respond or delete their MSN Hotmail messages. We are under discussions with a number of European mobile operators to offer this service to their subscribers, and it is already live in Switzerland and Denmark.

PressPass: How do you think you have influenced MSN’s strategy/success in EMEA?

Gibbons: I’ve been able to hire some key talent, including Chris Dobson, recently a top executive from a leading media house in Europe, to lead digital marketing and sales efforts in Europe.

I think it’s important to invest in MSN Advantage Marketing, the largest-ever digital marketing program, to help advertisers and brands build closer relationships with their customers. In EMEA we’ve invested US$30 million toward developing these partnerships, with a combination of innovative digital marketing products, research, partner and agency alliance programs, and awareness-building among traditional advertisers about value and the return possible through online marketing. We’ve also expanded our sales force by over 400 percent.

Industry-wide, the advertising downturn of the last year or two has been difficult, but MSN is investing when others are cutting back, and we are continuing to extend our lead in Europe. We’ve maintained a strong focus on MSN’s core strengths, which are software and building strong partnerships.

PressPass: How would you measure MSN’s success at meeting goals?

Gibbons: We’ve managed to attain and keep the No. 1 position in Europe due to the work of very strong regional and market managers — we’re in the top three in 15 individual markets and in eight countries we’re No. 1, surpassing some very strong players. Our leadership team in each region is very strong and that has been a major factor.

In several EMEA markets, MSN has been able to deliver some key services such as MSN Autos (called CarPoint in the U.S.), MSN Money and MSN eShop, which show Microsoft’s strength in delivering quality software to consumers. Those products rely on local content providers, so they’re highly localized — the content goes far beyond simply converting dollar amounts to deutschmarks or lira.

PressPass: What are some of = MSN’s recent milestones that you’re most pleased about?

Gibbons: MSN Arabia, just launched in October 2001, is very significant in that it was the first pan-regional portal by a global player to serve the Arabic Middle East region. Also, MSN EMEA has been a pioneer in delivering media-rich Internet experiences such as Webcasts and has taken the lead in driving many global Webcasting events. In December 2000, for example, we Webcast a Madonna concert that was viewed by about 9 million people.

PressPass: What are some important milestones you have yet to achieve?

Gibbons: One would be to deliver premium services, such as MSN Extra Storage. That’s a service that has been launched in four European markets, which is a first step toward delivering compelling, value-add services to consumers. So far, that’s been well received and we’re looking at other opportunities, including MSN Messenger over SMS.

We’re also focused on ensuring pieces are in place to take advantage of the future upturn in the advertising industry. That would mean going beyond banners and buttons — it would mean programs that integrate online and offline campaigns. Heineken, for example, used an integrated campaign in which MSN helped them market an offline game.

PressPass: What can we expect from MSN EMEA going forward?

Gibbons: There will be more new value-added services and capabilities built into our existing products. We launched the new version of MSN last fall with a MyMSN page that helps bring users a more compelling, personalized experience. Our ability to deliver the “personal Internet” is key to our future plans. We want our services to excite people and become part of their everyday lives.

We also look forward to MSN using Microsoft .NET capabilities to extend users’ traditional home applications and software to a service model. That means that instead of buying a software package on a CD, they would “rent” services like productivity or finance packages, or entertainment packages such as console gaming, music or pictures. We talk about MSN as the consumer endpoint to .NET — if those consumers use the Web and get an increasingly personalized and useful experience, they might be more likely to want to take advantage of things like MyAlerts or the early capabilities of .NET.

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