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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
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.
QuoteThat 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.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.
Tue Nov 06, 2007 8:39 pm Subject: Re: The number two place
Tue Nov 06, 2007 10:40 pm Subject: Re: It's not that bad....
QuoteAnonymous 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.
QuoteGuest 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"?
Wed Nov 07, 2007 1:12 am Subject: Like Clinton said: "Define 'IS'"
QuoteSo 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.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.
Wed Nov 07, 2007 1:58 am 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
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.
QuoteIntruder wrote:QuoteAnonymous 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.
Wed Nov 07, 2007 9:49 am Subject: Open Letter to Haters: Stop Attacking Your Honored Guest!
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Damn, I'm annoying.
Wed Nov 07, 2007 11:10 am Subject: Winning over
Quoteconcerned 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.
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