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Microsoft Hires New Ad Agency, Revamps Zune Marketing

Microsoft Hires New Ad Agency, Revamps Zune Marketing

by , 3:55 PM EST, November 6th, 2007

Microsoft has turned the primary responsibility for Zune advertising over to McCann-Erickson, at least doubled their advertising budget, and dumped the social networking theme of the Zune in an effort to challenge the Apple iPod, according to Advertising Age on Monday.

"Good luck," wrote Alice Cuneo for Advertising Age.

Microsoft spent US$9M advertising the Zune in 2006. As a result, the Zune achieved 10.8 percent of the over $250 hard drive based music players compared to Apple's 86.1 percent. Overall, Zune has 2.2 percent market share for all MP3 players.

Even more worrisome is the fact that SanDisk and Samsung players are gaining ground in the $100 to $200 market. "In the past year, the market has taken a dramatic shift to Flash-based devices, which are less expensive and smaller," said Ross Rubin, with NPD.

In reaction to all of this, Microsoft has already doubled their 2006 budget, and spent US$17M in the first six months of 2007, according to TNS Media Intelligence.

The new marketing campaign sets aside the idea that the Zune is a more social device because of the way it can beam music between Zunes. The new ad campaign, focused mostly on TV in shows like Comedy Central, Grey's Anatomy, and Desperate Housewives, has the theme "You Make It You."

"We are very much aware of the strength of our competition, but once our company gets into something, it will not give up," said Chris Stephenson, general manager of Microsoft's Entertainment Global Marketing. "It's good being in the Number two place -- we can fight the good fight."

The modest market share was described by Mr. Stephenson as a huge opportunity for the Zune.

Observer Comments

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Close Name:Guest
Subject: Heh

"It's good being in the number two place"....

That can be taken SO many different ways.

Close Name:gslusher Posts: 2088 Joined: 13 Nov 2002
Subject:

Quote
"We are very much aware of the strength of our competition, but once our company gets into something, it will not give up," said Chris Stephenson, general manager of Microsoft's Entertainment Global Marketing. "It's good being in the Number two place -- we can fight the good fight."


Or not. Ask the Microsoft folks about how much money they've lost on the xBox. True, they don't give up, even when they really should.

Close Name:xmattingly Posts: 266 Joined: 31 Jul 2007
Subject:

Quote
gslusher wrote:
Or not. Ask the Microsoft folks about how much money they've lost on the xBox. True, they don't give up, even when they really should.
That looks especially grim for them when you tack on the extra BILLION dollars it's going to cost them to repair faulty XBox's. Number two indeed... in keeping with that theme, they should release all of their Zunes in varying shades of brown.

Close Name:Guest
Subject: we can't make a better product

so, can you help us market it better instead?

Close Name:Guest
Subject: Stick to crappy OS building

The zune is so held back by it's marketplace I'm not sure advert-lies is going to help here. I'm sure there are those gullible types who'll buy the steaming load of zune, Microsoft is trying to hawk, but for the most part, the vast majority of mp3 player buyers have made their choice.

I'd say the big disadvantage is the backside (zune marketplace) and it's points scheme. iTMS feels like a store, where you can spend real money, not "zune points". Further, there is just more going on there. To crack this market, MS will need a whole lot more than pitch-men telling the masses how great it is to be zuned. They'll need a better product, backside and offerings. I'm reasonably sure, Apple will not make the mistake that gave MS the upper hand all those years ago. Add to this the fact that Mp3 users are much more informed than PC users were two decades ago. You know this new agency has more than a market share battle to win. To see a zune and the marketplace, is to dislike them. What a job they have cut out for them.

Close Name:Guest
Subject: The number two place

It would be good being in the number two place. However, I believe that place is held by Samsung. MSFT has a long way to go to get to #2.

Close Name:Intruder -   TMO Mac Specialist Posts: 3149 Joined: 07 Jul 2004
Subject: Re: The number two place

Quote
Anonymous wrote:
It would be good being in the number two place. However, I believe that place is held by Samsung. MSFT has a long way to go to get to #2.


They are probably #2 in the brown, 30GB hard-drive-based for $249 category.

Close Name:Guest
Subject: It's not that bad....

If you actually look at the specs for the new Zune's there really not bad.

In fact they seem good with a totally revamped marketplace and new design. They look good and I think they might even sell well

Close Name:Guest
Subject: Yeah right-in assbackwards land

Quote
Guest wrote:
If you actually look at the specs for the new Zune's there really not bad.

In fact they seem good with a totally revamped marketplace and new design. They look good and I think they might even sell well

Close Name:Guest
Subject:

Microsoft does not just release crap as many of you think or feel. The xbox IS a success, whether it has cost them money or not. People play games, they play Xbox. A company doesn't have to constantly show green in order to win over a market.

Close Name:Guest
Subject: Get this...

"Much of music and entertainment is driven by software, and "no company's is better positioned to deliver on that software than ourselves."

So Stephenson is saying that the Zune software and Monopsoft's software is better than Apple's and the iPod!

To quote Bill Murray... I have to laugh!!!

What an idiot.

Close Name:Guest
Subject:

Quote
Guest wrote:
Microsoft does not just release crap as many of you think or feel. The xbox IS a success, whether it has cost them money or not. People play games, they play Xbox. A company doesn't have to constantly show green in order to win over a market.


The only problem is, they haven't won over the market. Nintendo is kicking their assess, and Sony's too.

Combine the fact that the Wii outsells both the X-box and the PS3 combined, and that Monoposoft is bleeding a billion bucks a year on warranty replacements (the failure rate of the X-box is 35%, yes, that's one in three), they're not dominating anything.

Close Name:Intruder -   TMO Mac Specialist Posts: 3149 Joined: 07 Jul 2004
Subject: Re: It's not that bad....

Quote
Anonymous wrote:
If you actually look at the specs for the new Zune's there really not bad.

In fact they seem good with a totally revamped marketplace and new design. They look good and I think they might even sell well


Even the original Zune hardware was/is pretty good. Just not good enough to compete well against the iPod. It essentially failed twice in the market. Once as the Gigabeat, and once as the Zune. Unfortunate, but true.

Close Name:concerned Posts: 7 Joined: 03 Mar 2007
Subject:

Quote
Guest wrote:
Microsoft does not just release crap as many of you think or feel. The xbox IS a success, whether it has cost them money or not. People play games, they play Xbox. A company doesn't have to constantly show green in order to win over a market.

What's the point in "wining over a market" if you lose money doing it? Don't you care if you make money? Do you only care that you "win over the market"?

Close Name:Guest
Subject: Typical Microsoft...

... instead of making a better product they just look to make a better pitch. You can have the biggest advertising budget in the world, and the best ad company too, but a stinky turd is still a stinky turd.

Close Name:xmattingly Posts: 266 Joined: 31 Jul 2007
Subject: Like Clinton said: "Define 'IS'"

Quote
Guest wrote:
The xbox IS a success, whether it has cost them money or not. People play games, they play Xbox. A company doesn't have to constantly show green in order to win over a market.
So are you suggesting that Microsoft is on some altruistic mission to build better products? WRONG. M$ has always been about two things: dominating markets and driving profit. And they've failed on both counts with the XBox.

Close Name:mhikl Posts: 15 Joined: 20 Aug 2003
Subject: Microsoft's Misadventures

It is no fun watching someone, who should know better, continue to shame himself in public. In a long line of continuities and misadventures, Microsoft persists in digging desperate holes and is fervently squatting over two of them; one its XBox and the another the Zune. We can only turn our heads aside and hope that its hankering to soiling itself ends soon.

Cheers,
mhikl

Close Name:Guest
Subject:

The Brown Zune is #1 electronics bestseller at Amaozn. check it out...

Close Name:larsje Posts: 5 Joined: 16 Feb 2005
Subject: Yeah, but

look at the price. It's selling well right now because of the 60% discount!

Close Name:Terrin Posts: 414 Joined: 29 Jan 2006
Subject:

I do not think it is very good. It essentially had one poorly implemented feature the iPod lacked: namely the whole squirting thing. I say poorly implemented because half the songs it squirted couldn't be played because of copyright restrictions. Moreover, the iPod had truly useful features the Zune lacked. Namely, the ability to use the device as a hard drive, an alarm clock, a stop watch, to watch photos and videos on TV, and to play games. You can also store your contacts, which I do not believe you can do on the Zune. Finally, there is a huge benefit of owning an iPod in that there are a billion accessories.

Microsoft also promised its Zune users that it would be updating the Zune. Most users took that to mean updating the current Zune they bought. If you read the Zune Microsoft blog, there are many many unhappy users on that. So many, that I am surprized that Microsoft hosts the blog.

In addition, other more established media player companies make better all around players then Microsoft so it is just Microsoft's name that is pulling in sales. For instance, Creative actually has quite a few players that are nice. They lack the tight integration of the iPod with iTunes, but if that is not a big issue for you, Creative has a new player that according to a review in Mac Format magazine by far kicks the Shuffle's butt.


Quote
Intruder wrote:
Quote
Anonymous wrote:
If you actually look at the specs for the new Zune's there really not bad.

In fact they seem good with a totally revamped marketplace and new design. They look good and I think they might even sell well


Even the original Zune hardware was/is pretty good. Just not good enough to compete well against the iPod. It essentially failed twice in the market. Once as the Gigabeat, and once as the Zune. Unfortunate, but true.

Close Name:Steve Ballmer Guest
Subject: Open Letter to Haters: Stop Attacking Your Honored Guest!

blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,blah, blah, blah,

Damn, I'm annoying.

Close Name:Sir Harry Flashman Posts: 792 Joined: 08 Feb 2007
Subject: Winning over

Quote
concerned wrote:
What's the point in "wining over a market" if you lose money doing it? Don't you care if you make money? Do you only care that you "win over the market"?


They may lose money on the short, or even mid, term, but if you get people hooked on a cheap product then eventually you can make money other ways. King Camp Gillette pretty much gave away safety razors, but made a lot of money selling the blades for the razor in (the process he pretty much killed off the straight razor industry). Same with Kodak and their cheap cameras for which you bought Kodak film. Apple gives away iTunes which works on Mac or PC, but sells the iPod that gives us the ability to take music off of the desktop.

Now I don't think that the current leadership at MicroSoft is up to the task of unseating the iPod. They have dug themselves into a rut and the rest of the world is starting to pass them by.

Close Name:Guest
Subject: experience or advertsing?

how about taking all the advertising money( +9Mil), and spending it on a product redesign?

no amount of flashy advertising is going to sell the zune. if people wanted it, they would have bought it regardless of what a crappy ad says.

its plain to see that it isn't selling because of its ugly cumbersome looks.
the interface works well... it's just that nobody wants to be seen with one.

Close Name:Guest
Subject: No Blades for this Razor...

I don't think Microsoft is ever going to get into making money selling "blades" for its Zune "razor." There's no cash to be made distributing music; Apple makes money selling its iPod/Razor, and Microsoft's profitable "blades" are software programs. Maybe it should utterly reconsider what Zune is, and why people should buy it? The world certainly doesn't need another mp3 player, and Microsoft certainly doesn't need to be in the hardware/razor business without a hope of every making money at it. As such, the new ads are doomed. I've written about it at bit at DIM BULB, http://dimbulb.typepad.com/my_weblog/2007/11/zuned-out.html.

Close Name:Guest
Subject: wow

A mac site full of people who like ipods and don't like zunes. What is this madness! Are you all forgetting that macs have hardly any marketshare etc, more market share doesn't mean a better product. Ipods still sound like rubbish, don't have the simplest features like a radio and most people have to install the terribly bloated itunes. Bring on the flames

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