Monday, April 6, 2009

Another Microsoft Ad

Microsoft has another ad in their new series. The message is the same as the previous one: Windows machines are cheaper and therefore a better value. (well, they don't actually reference the operating system in the ad, weirdly enough), In a down economy, this seems like a smart attack. I still don't think these ads are a good approach and after quite a bit of consideration, I really don't think it's just because I prefer Macs. I'm hesitant to revisit this topic, since I don't feel like I did a very good job communicating what I intended to with my previous blog posts about the "Lauren" ads but, what the heck, I'll try again.

Let me clarify something first, though: I don't hate Windows. Prior to coming to full-time Mac and iPhone development work about a year ago, I spent about a decade doing consulting work for very large organizations, primarily big corporations and agencies of the Federal Government. I spent a lot of time using Windows, and am quite comfortable with it. Yes, I prefer Macs. Apple's priorities in terms of design and engineering are much closer to mine than Microsoft's are and in my past life, I spent a lot of time using the unix command line, so the combination means that Mac OS X is by far my favorite operating system. I'm simply not as productive on Windows or using any of the Linux/Unix window managers like Gnome or KDE.

But I don't hate any of them and I'm fully aware that choice of computer and operating system is a very personal decision. I own and have owned many Windows machines over the years and have bought and used machines from most, if not all, of the major PC vendors.

I honestly think these ads are a poor strategy for Microsoft. If you look at what we've been told in the new series of ads, it boils down to this:
  1. Macs are "sexy"
  2. People who use Macs are either cool or elitist depending on how you interpret Lauren's snide remark
  3. You can get a non-Mac computer for less than the cheapest Mac laptop
Now, though this appears to be an ad for HP, it's not. The ad was paid for by Microsoft and is specifically intended to try and counteract the fabulously successful "I'm a Mac" ads. Microsoft has actually come out and said so.

Let me clarify another misconception: I'm not a big fan of "I'm a Mac" ads either. But they're not targeted at me. Neither of these series of ads are targeted at me, but the Apple ads have obviously been very successful. Whether the Microsoft ads will be is yet to be determined, though my bet is that they won't be. Microsoft has certainly created publicity using the famous Dvorak™ method of pissing off the Mac fan-base, but Microsoft really isn't starved for publicity. That's not their problem. That's not why they're losing market share.

Simply put: this is not a strategy befitting or appropriate for a market dominator. And make no mistake, Microsoft is still exactly that in the operating system space. They still hold at least 85% of the desktop computer share. I don't know the exact number, and different sources give different numbers, but I don't believe Mac OS has broken the 10% threshold yet, and I highly doubt Linux has more than 5% of the desktop space. Whatever the actual numbers, there's not even a close second to Microsoft in this market. Apple is a very distant second, Linux (if you lump all the distros together) is an even more distant third. There are few industries where a company enjoys this kind of lead.

But, Microsoft is suffering an identity crisis because the world of computers has fractured into many components, of which the general purpose computer (laptop/desktop) is just one piece, and Microsoft has had a very hard time repeating their dominance in other sectors. While the Xbox is a good gaming console, it has at least two very viable competitors in the PS3 and the Wii. In the MP3 player market, Microsoft has not gained any traction at all with the Zune and it seems like it can only be a matter of time before they give up on it. In the Smart Phone OS market, Microsoft is one of many, and not in first place by any metric.

On top of that, in just a few years, Microsoft had watched Apple climb back from just 2 or 3% market share all the way up to their present location which, by the estimates I've seen, is somewhere between 8 and 10%, which is phenomenal growth. The Goliath that is Microsoft is really, really scared of the David that is Apple. They've watched Apple conquer several emerging markets while Microsoft has, themselves, failed to conquer any new markets over the last several years.

Of course, everybody knows that Vista (after an extraordinarily long development cycle) has not been particularly well received. In fact, it's the butt of many jokes and several of the "I'm a Mac" commercials. Now, I'm no fan of Vista. As a total package, I personally find it to be an inferior experience to even older versions of the Mac OS. The Aero interface feels like a bad knockoff to me - there's lots of gloss caustics and color, but it doesn't feel like much thought went into why they're being used.

But, under the hood, Vista does have some distinct advantages over Leopard. Vista's protected memory, for example, is something security experts laud. It adds a whole level of difficulty in terms of exploiting security flaws like buffer overruns in computer programs. The problem is, the theoretical advantage this provides hasn't turned into a real competitive advantage because Windows viruses, worms, and other malware are still fairly common and Mac viruses, worms and malware aren't. There's occasionally a news report that talks about some trojan or theoretical exploit, but trojans are not viruses and no platform is immune from them. Whatever the reasons, it still remains true that there are very few active exploits in the wild for Mac OS X, so public perception is that the Mac OS X is more secure. And as a practical matter, it still is, regardless of Vista's theoretical advantages.

Plus, good protected memory is not exactly something you can tout to the average non-power-user. So, Microsoft has decided to dumb things down quite a bit and focus on one factor: price. Price is a perfectly valid issue, but I don't think it's a good sign that they've essentially given up trying to tout any other advantages of their flagship product. When Microsoft talks about an OS right now, they talk about the yet-to-be-released Windows 7.

Price is the competitive advantage of generic brands and sweatshop-backed superstores.

It's pretty well-established that television ads serve more than one purpose. One is, of course, to get a certain demographic to buy your product. Another one that is arguably more important for high-ticket item product like cars and computers is to make people feel comfortable with their purchase after the fact. People subconsciously turn to television ads to justify their purchase decisions. In at least some markets like cars and trucks, ads have proven to actually be more effective at this secondary purpose then at getting people to buy in the first place, which is why many car and truck ads tell you nothing substantive about their vehicle, but just show a good looking person doing cool things with the truck. These types of ad help make people feel comfortable with their purchase and foster brand loyalty.

So, first, who is the demographic for this new series of ads? Obviously, it's people who are "not wealthy". It's the middle class, working class, students, and others who are impacted by the downturn in the economy. That's a pretty broad demographic, but Microsoft has actually defined the target audience in the ad: people who want to spend less than $1,000 or $1,500 on a computer. Of course, those are artificial and contrived limits specifically chosen to make a point. But, that's okay - you expect ads to do things like that, and people who refuse to spend more than $1,000 on a computer aren't likely to buy a Mac anyway.

Those people are likely to see these ads after purchasing their new $1,000 computer for validation about their purchase, however. And what's the message that these ads are giving them? That they bought a machine that's neither sexy nor cool. The message of these ads is "hey, at least you got something, right?" These ads tell people they were too cheap to buy a great. well-engineered machine (the new ad even lauds the unibody construction of the MacBooks!), but at least they got an okay machine. Hey, bud, don't you feel great about buying an okay machine?

Now, this will resonate with some people. There are always people who take a certain pride in buying things cheaply under the assumption that anytime you pay less you get a better value and it's a waste of time comparing the actual products. I doubt that people who think like that are a particularly large percentage of the population. Maybe they are, and maybe this is a brilliant ad, and I'm simply overestimating people. Only time will tell, but I suspect that these ads will help Apple as much as they help Microsoft and, if they have any effect at all, it will simply be to polarize the consumer market even further, giving Apple more of the higher-end, higher-profit sales, and cementing Windows as the operating system of the "cheap" computer. Most people will interpret "just as good" as meaning "not as good".

Once you get away from the sensationalism caused by specifically targeting Apple and riling up the fanbase, it seems to me that in the long run, these commercials are horribly misguided. Microsoft is the dominant market leader. They should be focusing on ads that reaffirm that their product is good - and better - and that their product is cool. They should be showing people doing cool things with their products and behaving like other products aren't even worth noticing. They should be touting price as just one of many advantages. They should be acting like, well… a market leader.


Michael said...

Very nice summary. I couldn't agree more.

Would be interesting to find out how this works out in the UK. Again most people have PCs except everyone I know owns a Mac...maybe I just know cool and sexy people! (see the ad is working in that it reinforcing my belief that as a mac owner I am cooler and sexier than 90% of the UK population!!)

alanQuatermain said...

I'm from the UK originally, and my father tells me that the Mac is making HUGE inroads there.

He's always been fairly active in the computing world (he's been teaching computer science & microelectronics for nearly four decades), and in the last couple of years he's seen first-hand a lot of people moving to the Mac.

Even in the current poor economic climate (the GBP is doing *very* badly right now) the Mac is surging. It seems to me that, in the UK at least, Apple is doing very well as positioning the Mac as having the most long-term value; when people splash out on a new computer, they're going the extra mile to get a Mac.

Stephan said...

The funny thing about people buying on the lowest price is that there are about as many people who buy the most expensive for the same reason. For some reason some people think the most or least expensive options are the best. They rarely do enough research to figure out that the midrange is usually the best deal.

Once I worked in an IT shop that was a little crazy they bought the cheapest SCSI card they could find and while it did have a SCSI chip on it it didn't seem to be connected to anything. And the RAID5 box we got was the the total other end and once we got a card worthy of it it worked well.

ScottYelich said...

Hi. I'm a programmer. I use the tools that are best for the job, and if a good enough tool doesn't exist, I'll make one. My name is Scott, and I am a programmer.