Interesting news today that Microsoft is apparently in negotiations to buy a mobile marketing company in Boston, making this second major new channel marketing acquisition by Microsoft in a little under a month.
One has to think about the strategic and commercial thinking behind these acquisitions (which is pretty obviously about moving up and down the value chain for digital services) but even more importantly, one has to think about why now….. and why are Microsoft buying new-world companies and not bothering with the traditional advertising agencies?
The “why now” question is a fairly significant one since Microsoft has been in the internet space for about 75% of the time that the internet has been mainstream (who out there is old enough to remember the exciting and visionary times of On Australia and the Microsoft Network!!) and certainly has the cash to have acted at any time. My view (DELETED) is that (DELETED) we have arrived at one of those pivotal points in the evolution of the online market; the point at which the various factors which will create a sustainable new market for digital content and services have converged. These factors are:
- The network works – and to make it even better, there are a couple of variations of networks which work. The internet is fast, reliable, easy and very widely spread and mobile networks are catching up
- The technology works – the things that used to be complex about using the internet have mostly gone away – the experience has gone from being one for technologists and enthusiasts to being one for the mainstream consumer and that has brought a lot more users!
- More devices and more digital channels – the internet is no longer restricted to a computer. You can access the internet through more and more devices such as media centre PCs, mobile phones, PDAs, games consoles and devices (like Xbox, PSP and Nintentdo Wii), and new ultraportable computing devices like those produced through the Origami Project. The internet is going to be EVERYWHERE.
- And the people (and the ad budgets) are coming ….. there are now supposed to be more than a billion internet users worldwide!!
These changes are affecting the way we source, consume and now distribute entertainment (and therefore advertising) and Microsoft has identified that the time is right, very right, to gain a strategic foothold in this space.
So …. Why aren’t they buying the advertising agencies? Well, this isn’t an advertising problem – it is more of a channels / content / services / engagement problem. The challenge now is about finding ways to entice consumers to engage with your brand / company / service and then giving them the channels and tools to be able to use it. It is a new way of thinking about the whole marketing / communications / engagement process and in the main, the mainstream ad agencies aren’t positioned to take advantage of this (but thankfully dedicated Digital Services Companies are#).
Time for some new thinking folks …. The ground is shifting under the feet of the large agencies and from our experience, many of them just aren’t adapting, changing and evolving fast enough.
And back to the MMTV – why do I want it? Because it makes sense. The future of advertising is individual, customised, targeted, available and digital and that’s an exciting world for all marketers, brand owners and for those of us who support them.
As I keep saying …. I really love what we do because we get to change the world.
* Microsoft Mobile TV
# Another blatant Hyro plug but hey, I work there and I am really excited about what we are doing!
