Remarks by Mich Mathews, Senior Vice President, Central Marketing Group
June 23, 2010
MICH MATHEWS: Well, hello. Good afternoon. As you heard, the theme of my speech is about “overdogs”, underdogs, and the games marketers play.
I’ve divided this into a few sections, because you’re a tough crowd, because we’ve got people who make creative, people who make a lot of money out of creative, people like me who give you guys money for creative. So, hopefully I’ve got something in here for everyone.
So, underdogs and overdogs. I thought it would be fun to contrast one of the great parts about my job is the number of consumer brands and challenges that we all have under one roof. On the one hand, we’ve got something like Bing, which is clearly a challenger brand, and then we have another brand like Windows, which arguably is an overdog, which also has its challenges. So, I thought I’d contrast our marketing approach there and some lessons that we’ve learned along the way.
And then we’re going to show you some fun stuff, and I’ve got some special guests. Technology is playing just a critical role in how we engage with consumers, how we can deepen the affinity that they have around our brands, and I’ve got a couple of cool things to show you that is going to impact marketing of the future.
OK, where should we start? Let’s start with Windows. The first lesson here, the notion that reality is more interesting than fiction. A few facts about Windows. It’s used by a billion people on our planet. So, you’ve got a billion customers with very diverse opinions, very diverse senses of where they are in the purchase process cycle, but nonetheless you’ve got a very broad audience there.
And it’s a brand that frankly that we had underinvested in terms of marketing, and as probably many of you know, Apple was spending an awful lot of money trying to deposition both Windows and the personal computer.
So, our challenge here was to, if you like, relaunch the brand, remind people of the great things about what their personal computer could do, and therefore Windows.
What’s interesting about this in kind of the underdog/overdog approach is that we frankly ended up acting like an underdog here, because what we did was Apple had — they didn’t attack us per se, they attacked our customers, making a parody of “I’m a PC.” So, we did a little bit of a judo move here, and actually made their tagline our strategy.
So, instead of like swinging back the fences and defending ourselves, what we ended up doing was defending our customers. Hence our campaign around “I’m a PC,” which I’ll show you some more relevant stuff.
And when your customer base is that many people, a billion people, you do not have to go very far for interesting stories. You know, there was no point in a creative sense of us making up things about what our customers could do; you just lean in heavily to that global footprint, and you’re going to find inherently more interesting ways of telling stories about what people are doing with personal computing around the world.
So, let’s take a look at that first spot.
MICH MATHEWS: OK, the next example I’m going to give you on our journey of learning here is the power of taking earned media and magnifying that with paid media. So, here we are, we’re about to launch Windows 7, which we launched last October. So, we had our campaign ready to go on a global basis, and the product is absolutely killing it in terms of reviews, incredible commentary in the social graph and reviews.
We did a beta test of this product a full year before, so we had 8 million, 9 million people around the globe, arguably the biggest crowd sourced piece of software ever. So, we knew with some precision that, hey, people really like this, we’re onto something here.
And at the same time, we were also — you know, it’s instructive to look at what our competitor had done before, and we thought, well, it’s very likely that they will go negative around Windows and the PC to deposition that at launch. So, what can we do about that?
So, what we ended up doing is taking just this spectacular commentary that we were getting in the media and the social graph from around the globe and said, OK, we’re going to put that on TV. In essence we called it a pre-buggle. But, you know, then there’s like handwringing, we really want to do this, it’s killing it in paid media, but how can we do it with a brand such as us that people say, wow, you know, big brand, how does it not become some chest pounding, arrogant thing.
The answer was a little girl called Kylie, who’s five years old, who’s an avid PC user, and, you know, interestingly, this is one of our best performing spots ever.
MICH MATHEWS: OK, that’s sweet little Kylie.
And then the third point I want to make on Windows and in this theme of overdogs is the message that you really can never give your customers enough credit. Again, as I just mentioned, we were in an unusual situation I think for a category in that we had a product out a good year before it was going to be launched into the marketplace. So, on a global basis we had quite an understanding about what our customers thought to it, what features they liked in particular.
And those customers, when you do a beta that big, I mean, they’re shaping your product. They’re telling you what they want in it, they’re telling you what they don’t like, what needs to be augmented and fixed. So, they really had a hand in creating what we had built. And what we saw over that course of that year is both our customers really like the product, but they also wanted to get some credit that they had participated in that sense.
And that’s how we came about with the strategy of, hey, just lean into that very heavily and say, thank you for all those people who were involved in shaping what we have today. And Windows 7, we, as I said, launched it in October, and it’s doing very well. We’re selling seven copies of the product every second.
MICH MATHEWS: OK, a few little overdog examples there.
Now I’m going to shift gears and contrast that to Bing, a brand that we launched last May. And, as I said, you know, clearly a challenger brand. When you’re a challenger with a competitor like Google, you know, there’s a couple of approaches. When you’re a challenger brand, you can either go head-to-head, you know, be super scrappy and have at it, and what we did in this approach, however, was to sort of attack the incumbent, actually attack the incumbent.
And, you know, I say this here, the lesson here is disrupting an 800-pound bunny rabbit. It’s because Ty Montague, who was at JWT, who drove this campaign for us, you know, when we’re in that formulaic process at the start, I said, you know, this is such a hard problem, because it’s not like there’s an 800-pound gorilla. This is an 800-pound bunny rabbit. I mean, people like this, they love it. People aren’t wondering around going, “Oh, search is so bad.” It’s not the case. So, how do you de-seat something that is really, really thought incredibly highly of?
And our approach was based on a distinct insight, which we — as you might know, we have had several runs at search before with some genius branding, but we won’t go there. And the No. 1 thing that we saw there is that the back button is the No. 1 feature that’s used in search. Well, that’s because people aren’t getting the answers they want every time in those links; they go back and try another and try another and try another.
So, what we did here was not go head-to-head and say, hey, we have a new search engine, it was to say, hey, we have a decision engine, that if you are going to use Google every single day, you’re not necessarily going to get the job done. We’re not saying give up Google for Bing, that there’s two products that are both helpful to use side by side.
So, what we had to do, our challenge here was both to call some dissatisfaction in the category, as well as announce that there’s a decision engine called Bing from Microsoft.
MICH MATHEWS: And this isn’t really so much of a lesson, but, boy, it’s fun to contrast other stuff that we get to do. It’s one thing of when you’re the underdog you get to be goofy, get to take risks, you get to be irreverent and really go to town and have some fun. So, I’m going to show you one of my favorite spots here.
So, where we are with Bing, we launched it, as I said, last May. We have a long way to go. We think there’s so many still-unmet needs, that we’re just scratching the surface in this category. But we’re pleased with the momentum. Since then, we’ve got 4 points of share — still 4 points of share. So, a long way to go, but we’re just going to keep chipping away.
MICH MATHEWS: OK, a few little underdog/overdog lessons there.
I’m going to shift gears a little bit now, and start talking about technology.
One of the things that we’re incredibly excited about is this notion called natural user interface. You probably know us, that we’re about search and Windows Live and Xbox LIVE and so on, but the breakthrough that is happening around NUI that we call it is this notion of software that’s far more intelligent, that’s going to allow us new advertising platforms on devices. For example, it’s software that has context, it understands what I’m doing or trying to do, it understands my voice, it responds to touch. It has contextual relevance.
So, there are actually two examples of that that I’d like to show you. And if you put on your hat as a marketer, you’ll be able to see how embracing these things, what the possibility is going to be for us to engage with our customers more deeply, and build loyalty and move people to trial.
So, I’m going to ask rock star Kostas, who works with our chief software architect, to come on. (Applause.)
KOSTAS: Thank you very much.
MICH MATHEWS: And Kostas has brought with him Windows Phone 7, which we launch this October.
Now, I’ve seen this. So, I’m just going to hand center stage to Kostas, and he’s going to show you some damn cool things on the phone.
KOSTAS: Thank you.
So, Windows Phone 7 is something that I’ve been playing with only for a few weeks, and it’s been very, very exciting to see what the team has actually done.
I work in the labs, and we get to play with a lot of the technologies that we ship, and I think this one we actually got pretty much nailed. It’s an extra move on our NUI experiences. We’re trying to get technology out of the way of people. We’re trying to make sure that the devices actually work with the way people want to work.
So, for consumers what this means is basically seamless experiences, seamless social connectivity, not just about applications, obviously about the phone, obviously about media.
And for marketers, for this particular audience, which I thought is really amazing, is this is actually turning out, in my view, to be an ad-serving machine, and I’m going to show you what I mean. It basically enables advertisers to connect with consumers over time, which is very exciting. So, today, I’m going to show you three things why I think that this is an ad-serving machine, and let you make up your own mind.
So, we have an actual device here. This is what we call a mule. It’s not what it’s actually going to look like in terms of the physical form factor, but this is a Samsung device that works quite well.
So, what you’re looking at is the start screen, and the start screen is basically made out of a series of tiles. And you might think that these are actually icons, but they’re actually not. Tiles are very, very different.
What I’m going to walk you through is an example with Xbox Kinect, and basically it’s a product marketing example. So, don’t think about it as Microsoft, it’s just one product that you could use, to use the phone to market for.
So, we’re going to start this, and you can see immediately there’s an X and a Y axis on this. We’re basically going to start with a Bing search; why not? I’m a gamer. I love games. And when Xbox Kinect came out, I wanted to find out more about it.
So, let’s go to the Bing search engine. And again in the theme of NUI we’re going to basically do a voice-activated search: “Xbox Kinect.”
OK, great. Let’s go to the Web, right to the website. And what you notice is this is a pretty good experience. We’re actually now over the network and so forth.
What you’re going to see is a website that is a fast experience, it’s a full dynamic experience in terms of media. You’re seeing an HD video file that’s embedded in that. This is the actual website for Xbox Kinect. Anyone can hit that. You have a Silverlight download, you have the list of games and so forth, and it’s quite smooth in high fidelity.
And this is really the beginning, if you will, of how a customer is aware of a product, how they enter the phase of learning about it, getting excited about it, and so forth.
So, what I’m going to now take you to is the demo mockup downloading an app.
So, let’s pretend that this is the actual site. Our marketplace is not up yet. So, we’re going to go and now pretend that we’ve actually downloaded an app.
So, we hit the app, and this is an application — and all of you have obviously been used to applications. The iPhone has them, Droid has them, and so forth.
But this is different. The applications in our case are there to keep people informed, and there to build the connection.
The purpose of this application is to attract, which is what we’re doing with the search, to connect with customers, and to excite them as well.
MICH MATHEWS: And the key thing here is that it’s dynamic. So, unlike an app, say you were really into a brand, a brand can be sending news, information, offers and so on, like once you have this tile on the phone.
KOSTAS: Another great differentiator actually, about this, is traditionally when you go to a website and you download an app, I download an app from a marketer or from a products company, it actually takes you to an app store of some sort, and there you have to sort of find your way through and so on.
What we actually do is we preserve the brand experience by going directly from the website, right to the application through a secure, certified connection, that allows the brand experience to go straight through to the customer.
So, are you’re looking at this application, for example, you have what you’d normally expect. You cruise through it, and you have the countdown for how many days are left until Xbox Kinect is available. You can have the normal information around reviews, news, where to buy, and so forth.
But what you actually notice is that we’ve missed something. We’ve actually missed the actual product.
So, what Xbox Kinect allows you to do is actually use the phone as a looking glass into the media, which is really important for marketers, because what we’re trying to do is preserve the creativity and the design that went into a campaign and so forth, and not allow the form factor to shrink or to deprecate that experience. We’re using the phone as a looking glass, as a panoramic canvas to the creative, and that allows you to reuse your assets and reuse the creative that you spent a lot of money for.
So, we’re going to basically go back and we’re going to go through the demo again. Just after you’ve downloaded the app, you say, well, this is great, I want to stay informed with this application, I want to stay informed about Kinect, I want to connect with this company, and what you’re able to do is go back and use a new metaphor that we have called pinning.
And you say, well, what’s new about pinning an icon —
MICH MATHEWS: Studly photo, by the way.
KOSTAS: Thank you very much. That’s me sailing.
So, you have an icon here, which looks like an icon, but it’s actually not. And because I really care about Kinect, I’m going to move it all the way up the stack, stop it there for a second.
And what you’ll see immediately is — I don’t know if I can zoom in on this.
MICH MATHEWS: There you go. That’s better.
KOSTAS: What you’ll see is that there’s actually a message on that tile. That tile goes in line with what I was talking about before, that connection between the advertiser and the customer.
So, that tile is actually a dynamic tile that you’re now able to push information to as an advertiser and stay in touch with your customer. It’s a dynamic relationship that is created. It provides for an ongoing dialogue with the consumer, and this is another differentiator for this product.
So, let’s assume that you now have the tile on here, you’re doing your normal thing, but let’s assume that it doesn’t quite work that way. You actually downloaded the app. The app is not running. So, you think in a way you’ve severed the relationship.
Well, we have a third concept called Toast. So, now we have applications that are actually dynamic, that you can download, that you can pin, and again a new concept called tiles. Those tiles are another communication stream between you and your audience. And if neither of those are running, if the app is not loaded, if the pinning doesn’t happen, we have another way to reach your customers called Toast.
What you’ll see is another notification that comes down on the right, again enabled by the advertiser, it enables the advertiser to push the content down to the device.
Now, a customer can opt out of all of this, right, or they can opt in. It depends on how creative we are in gathering their attention and wanting to keep them engaged.
So, basically a recap. So, what we have is we have apps, tiles and Toast, and those three concepts I think make this an ad-serving machine for marketers.
One of my favorite features of this one is something I haven’t talked about, which is the photo function, which I’m going to now lift this and show. And because nobody believes I’m actually in Cannes working, they think I’m actually on vacation, I’m going to take a picture of Mich and I.
MICH MATHEWS: Nice.
KOSTAS: Nice. Here we go.
And what I love about this, zero step sharing, because this has already now gone onto my SkyDrive and is being shared with my friends.
So, this is the phone. We think you’re going to enjoy it. It’s going to be a great tool for marketers, and it’s going to be released in the fall of this year.
Thank you very much.
MICH MATHEWS: Thank you. Thanks, Kostas. (Applause.)
OK, now I want to talk about Xbox Kinect, which is over here. So, I don’t make a complete fool of myself showing this, I’m going to ask someone to join me, who I hope to God is here. Otherwise I’m just picking on some random person in the audience. It’s Rob Reilly from Crispin Porter here? I would like Rob to come join me. He’s going to show his athletic prowess. (Applause.)
So, we’re going to do something fun, and I’m going to take my shoes off for it. So, excuse me. We’re going to play a game.
So, this is Xbox Kinect that’s just here.
He’s limbering up. (Laughter.)
Now, this is an example of actual client-agency partnership. We’re going to see how well we communicate together. So, we have to like have directions while we’re playing this.
So, what you see here is this is just this little sensor here, that this is going to be available around fall. It will work with any Xbox 360.
Let me put my clicker down.
OK, we’re going to play this game called River Rafting. As you can see here, it’s giving a tutorial of things we need to do.
Are you going to jump in or are you —
ROB REILLY: I’m going to try.
MICH MATHEWS: Are you driving? Are you driving?
ROB REILLY: Listen to me for my mic sounds. I may curse.
MICH MATHEWS: OK, so what you’re going to see here, this is like can you see how I move? This is actually a camera that understands both voice and motion. This is actually my skeleton that is picking up, so you can see. And obviously if I set this up with my own avatar, this would be — it would be recognizing me and something about me and what I wear and so on.
So, as you can see, you can either play on your own or play with someone. And as Rob moved in there, it recognized him. So, we’re going to — he’s going to jump in mid-game.
So, here we go.
And if you crouch down, you go faster.
ROB REILLY: Left, left, left, left! Crouch down, crouch down, left, left.
PARTICIPANT: We’ve got a jump coming up.
ROB REILLY: Right, right, jump! Go to the right, go to the right! Damn it, Mich! Right, right, down, down, down to the left, all right.
MICH MATHEWS: We’ve got a jump.
ROB REILLY: All right, go straight, go straight, go straight, go straight.
MICH MATHEWS: We’ve got a jump.
ROB REILLY: Oh, that was horrible. Go to the right, go to the right, go to the right, go to the right.
MICH MATHEWS: Stay straight, stay straight.
ROB REILLY: Jump!
MICH MATHEWS: OK, here we go, right, right.
ROB REILLY: Go to the left, go to the left, go to the left. Go to the left! More to the left!
MICH MATHEWS: You’re off-camera now. Get back in. Go right.
ROB REILLY: Here we go, here we go, here we go. Jump! Jump! Go to the right, go to the right. Go to the left, to the left. Go to the right.
MICH MATHEWS: We get to jump. Jump, jump, jump!
ROB REILLY: Go to the right. Go! Great. I’m winning. All right, to the left, to the left, to the left.
MICH MATHEWS: You’re out-camera.
ROB REILLY: Oh, over here.
MICH MATHEWS: You’re going off-camera. Good craft.
ROB REILLY: You’re so good. All right, to the right, to the right, to the right.
MICH MATHEWS: OK, on the right here.
ROB REILLY: On the left. Jump! Last one. Go!
MICH MATHEWS: OK.
MICH MATHEWS: So, you see it also takes photos while you’re doing it, and you can send these on Facebook and so on.
Let’s see, 94, we wanted to break 100. (Applause.) Thank you.
So, a round of applause for Mr. Reilly and his athletic prowess. (Applause.) Thank you for doing that.
Excuse me while I put my shoes back on. Oh, I’m winded.
So, you can see that it’s like kind of fun. We’re going to have a ton of games like that. The fact that you don’t need a controller, you can imagine the barriers to entry, whereas, you know, you might not have played Xbox with an older parent, but this is something that is just barriers to entry very easy for everyone.
Sorry, I really am out of breath here. (Laughter.) It really is a workout.
So, OK, we see how that’s fun for gaming and entertainment and how you might engage with content, that whole Minority Report thing, and there’s something like very tangible that we’re doing with Burger King come holiday.
So, Burger King in their kids meals are going to have an array of these like plush toys, like this giraffe, a little lion, and so on. There’s an elephant, a tiger, and so on.
So, the notion is you get a meal and you collect them. But what’s really cool about it is that they call come with this tag. And what this is, what you’re seeing here is the Xbox game that’s also out for holiday called Kinectimals, which I keep getting wrong.
But what you’re able to do is take that tag, you scan the tag into Kinect, and it will release a toy for me to play with like an actual giraffe. So, let me show you. Let’s see how well I do on this one.
You can see I just started it then, and what I’m going to do with this — my sweet little lion, isn’t he cute? So, I take what’s on the — scanning. I’m not having much joy here. Is this user error? Is it my dress? There we go, the lighting. Thank you. See, there’s a technique to it.
So, as you can see, what it’s immediately done is recognized I had a giraffe. So, then I can interact with my sweet little lion here. And you get tigers and lions and so on, and you’ll see how cute they are.
So, what it will show is you’ll open up your toolkit and within it your toy box. So, there will be a Burger King toy box, and each time you scan a new one of these, you’ll have a new thing to be able to play with. So, like I can — he does this actually, if he wants attention, he recognizes, they get to know you. So, I can — come back here! So, you can see I just threw him the giraffe, and he brings back the giraffe to me. (Applause.)
OK, we’re going now. See, I just threw it, and there we go. We could do this all day and drive you crazy. (Laughter.)
OK, very cool, right? (Applause.)
So, you know, in closing a couple of things. I hope — he’s just standing there waiting for me. Are they taking it off? (Laughter.)
A couple of things. One, I hope as consumers we’re very excited about this fall. Not only are we shipping this, we’re shipping a new phone, we’re going to have Windows 7 laptops in every color, size, price point possible. We have a new version of Office, and we also have a new version of Bing coming out. So, it’s going to be a very busy scene for us, both as an advertiser and a marketer.
But I hope as marketers you’ve seen a little glimpse here about what’s possible when you get a really great idea, and you merge that with technology, just like what’s possible, what is going to be possible for all of us as marketers in getting new customers, keeping customers and engaging customers.
So, with that, I say thank you. Don’t take my word for it. Microsoft advertising, down the road you can go out and check this stuff yourself. I encourage you to do so. Thank you. (Applause.)