What Is Microsoft Solving For With Attack Ads?

A dear friend remarked this the other day:

Microsoft is so stupid, they keep running these awful slanted TV commercials that, over the last few years they have failed with all products in these ads. Why do they still keep running them?

I love my friend, but this is an imprecise statement. But the question at the end is a good one. I shared the following thoughts with him.

It is a mistake to think that with the attack ads (against iPads, Chrome, Gmail, Google Search, Samsung…) Microsoft is trying to increase market share. It is not.

There is a five plus years track record now of Microsoft consistently failing to gain market share, or actively losing share, in tablets, browsers, web mail, search and mobile phones. Marketing folks at Microsoft are not ignorant. They have access to five plus years of data, in fact they likely have even better data than we all do.

The success metrics for Microsoft’s attack ads are: Employee Satisfaction & Employee Retention.

These ads make hardworking Microsoft employees feel good about their company. They make the engineers working on Surface etc. happy that their tablet has so many more features than the industry leading iPad. These ads increase satisfaction and perhaps increase retention because some employees see these ads and then don’t want to quit.

Microsoft spent $2.5 billion on advertising in 2013 (compared to Apple’s $1 billion). That might seem like a lot to spend on employee satisfaction and retention ads. It is not. Microsoft currently has $68 billion in cash, and its revenue last quarter of $19 billion. They are very smartly using this money to retain employees and improve employee morale (both so important).

It would a mistake for to think it is to increase the company’s market share or revenue for Surface, IE, Outlook.com, Windows Phone/Nokia.

Next time you look at a Microsoft attack ad, look at it through the ES and ER lens, and imagine you were in standing in Redwest A in Redmond. I bet you’ll smile and agree with their strategy.

PS: There are other examples where Microsoft is not solving for Employee Satisfaction and Retention. Xbox is a good example. No attack ads. Good feature/value ads. Xbox has great share, and it is also stealing increasing.

Source: http://www.linkedin.com/today/post/article/20131213180400-2434720-what-is-microsoft-solving-for-with-attack-ads?trk=mp-details-rc