Microsoft Digital Day – Part 2

This post covers the second half of the Microsoft Digital Day event held on 20th October 2006. The morning sessions were covered in Part 1.

In game advertising; what the trends are in gaming, why games are such a powerful media, how marketers utilise dynamic ad platforms and how effective these can be

Presenter: Mitchell Davis – Massive

(Massive produces in-game advertising and was recently acquired by Microsoft)

I’ve always wondered when in-game advertising and product placement would begin to take-off… it seems it has. It is a logical step as people spend more and more time inside virtual worlds.

Mitchell produced a slide showing game software growth. Online and wireless games are currently way below console games but have already overtaken PC games and are growing in popularity

Graphics are reaching a standard where the virtual world is becoming realistic. The upcoming Xbox game Splinter Cell has taken over 100 developers over 2 years to build, costing $25m. But console games are increasingly looking like replacements for movies. The game Grand Theft Auto achieved $359m in sales, the equivalent of Spiderman the Movie, released in the same year. And people spend far longer playing the game than watching the movie…

…and game players do not multi-task, a big difference to how we often watch TV. When playing a game, you have to be 100% focused on the task or you lose/die (depending on the game). Hence ads are far more likely to be picked up by eyeballs inside a game than on the TV.

Online games are beginning to clock up more hours than traditional console games. In the online game World of Warcraft, some people are now spending over 100 hours per week on it. (At this point, I had a thought – this is like The Matrix in reverse. We are actively plugging ourselves into the grid to the point we could rent out our physical shell because we are barely using it.)

Massive has approached in-game advertising in a similar way to traditional methods. Instead of creating an ad that is permanently embedded in the game (e.g. as you reach the final stage of the level where you have to kill a zombie coming out of a tunnel, the tunnel always has a poster above it advertising a coffee brand), ads are run as campaigns. The ads can be placed in different slots throughout the game, for defined periods of time. They can be geographically targeted (including language-specific ads) and even do time-dependent advertising (i.e. only show the advert at certain times of day within the time zone where the game is being played).

Mitchell described a test campaign that was recently completed. The campaign saw a 14% increase in brand favourability from those exposed to the ad versus the control group, a 11% increase in purchase intent and a 12% increase in ad likeability. The audience was redominantly 13 – 34 year old men (95%)…

…and that, I think, is a challenge for the advertising industry. Tom Peters and others have been talking for an eternity about the need to target women, because over 80% of purchasing decisions are made by women. Not many computer games are currently targeted at women.

But to finish, Mitchell dropped a great quote:

“Whether the game is pirated or not, they still see the advertising!”

It sums up why advertising is becoming increasingly attractive to software companies who sell proprietary software. If you can earn revenue from advertising instead of software licences, the piracy problem just disappears. It could also be a potential business model for community-built open source software.

Traditional Media embracing digital

Presenter: Simon Waldman – Director of Digital Strategy and Development, Guardian Media Group

I am quite a fan of The Guardian because I think they have done a great job of embracing the Internet and emerging trends influencing how we consume news. And this session summed up how they have succeeded.

The Guardian’s mission is “To be the world’s leading liberal voice”. In other words, to go beyond being a physical newspaper you pick up.

One of the experiments they ran last year was to create podcasts with Ricky Gervais (he who created The Office). It led to over 4 million downloads and brought links to the news site from unexpected places – lots came from iTunes, podcast networks, sites like Technorati… all these people had never before visited The Guardian web site.

The attitude at The Guardian is that content must be high quality, distinctive and easy to find. The majority of challenges are around that last point. If you aren’t easy to find, then you are going to disappear – and being easy to find means being out there on the web.

Simon described the 3 characteristics that have emerged from the Internet (you could try and argue Web 2.0 but let’s not):

• people want to create and communicate, ideally both at the same time
• people want to control their media – what they want, when (and where) they want it
• people want to challenge the established order – enough is enough

…and people will do it whether we let them or not. (Whilst the ‘we’ referred to mainstream media, it could equally be applied to governments too – I think (hope) politics is going to be disrupted beyond recognition over the next 10 years)

Simon gave a simple and incredibly clear example to demonstrate the change. People are wrong to compare Wikipedia with Britannica – Wikipedia isn’t aiming to be the same as Britannica, it is 180 degrees to the left of it. Encyclopedias are top-down authoritarian. Wikipedia takes a different approach and serves a different purpose.

Simon talked through some of the different ideas that have been tried by The Guardian:

Obituaries page: The Guardian opened up a section called ‘Other Lives‘ – anyone can write an entry for someone they know who has died, regardless of the so-called importance that would normally determine who gets an entry.

Commentary blog: On the Commentary section, anyone can participate and leave comments – journalists are contributing alongside everybody else rather than being positioned as some kind of authority on the site

Working across channels: The Guardian has a travel site – Been There – people contribute with their experiences, and The Guardian then rolls up weekly to highlight a specific location within the newspaper.

And they have been looking into the world of video-reporting, kitting out journalists with camcorders to capture moments that you would either miss or would struggle to report well in writing. A sample was given – camcorder footage of Cherie Blair in the audience at the recent Labour Party conference. You had to see it to believe it (which I think demonstrates his point). 🙂

The session closed with an audience question – how do we currently consume news: Online only = 14%, Print only = 8%, Mix of both = 78%. Not surprised at the numbers. The web brings about new ways of consuming content, but in some scenarios, the best format has already been invented – paper.

WPF Reader offering a highly-differentiated visual experiences

Presenter: Michael Cooper – Director Strategic Relationships, Advanced Reading Technologies, Microsoft

This session focused on the New York Times Reader that has been recently announced.

In a nutshell, the reader does a better job than a browser at managing news layout to fit different screen sizes, and to navigate content. There are no scrollbars – all navigation is based on cursors (e.g. left – right moves between stories, up – down scrolls through the story. Columns are added or removed (and news stories repositioned) depending on screen size.

The New York Times web site currently averages 4 page views per session. The aim of the reader is to increase the time the reader spends on the site, to create more advertising opportunities. Ad placement within the reader is dynamically driven – the ad message can be optimised based on the story it is displayed within (click through goes to different locations depending on the message – e.g. an insurance company can advertise different types of insurance in different sections. Where you click on the ad affects the type of insurance promoted and forms to be completed). The layout is also dynamic in that it can change as you go back/forward – the same page can display different ads in different places.

In trials with the reader, page views per session jumped to 80.

I have mixed feelings about this reader. The navigation elements are similar to the offline experience provided by AvantGo, where you can synchronise content from multiple different sources and read it offline. It certainly demonstrated well, but I’m not sure that I would use it. It would be useful to be able to download a digital edition of a newspaper, but I just want a simple link off the web site – ‘download offline’ – where I can quickly sync the content to a device when I want to… and I don’t want the whole news, I want to choose sections I am going to want to read. And I don’t always just want one paper, I want a mash-up of the different sources I like to read. You get halfway there with news feeds, except most news sites insist on only doing partial feeds which are rendered useless when you are offline. And to finish, the ability to view in newspaper format is only suited to a laptop or tabletPC (i.e. you need a reasonable amout of screen space) – useful when I am at home or in the office, but not when out and about travelling. Mobile devices need a different layout to newspaper style.

Subscriptions are also broken when it comes to newspapers. When I’m travelling on public transport to meetings, I will often buy a newspaper at the station to read on the journey. But I don’t buy the same news paper every day. That’s easy to do when you pay for the item on the spot. But the web sites want you to pay monthly subscriptions – those subscriptions add up to a lot of money if you aggregate all the news sources that you read… and the cheeky publishers still push adverts at you, littering the page and slowing down page load times, even when you’ve paid to access the content…

Still some work to be done in this area…

Microsoft’s vision, strategy and commitment to the online advertising industry

Presenter: Steve Ballmer – CEO, Microsoft Corporation

Some of the comments made in this presentation align with a lot of what was said in the Gartner podcast recently published.

Microsoft is very much repositioning away from the enterprise perspective (much of the last 10 years has been spent persuading businesses that Microsoft is an enterprise-level supplier) to ‘from the end user to the enterprise’. This covers the two traditional areas – desktop and server – plus the two new focus areas – entertainment/devices and online services.

Whilst the ‘G’ word wasn’t directly mentioned, Steve compared Microsoft’s current search position to that of their spreadsheet position 15 years ago, when Excel was challenging the established leader – Lotus 1-2-3. (Oh how the memories flooded back, there wasn’t much you couldn’t do with the ‘/’ key in Lotus 1-2-3). The focus back in the early 1990s was on building a suite of applications (Microsoft was simultaneously targeting the word processor market, then dominated by Word Perfect). Fast forward to today, and search is broadening out into a set of investments, spanning software and devices, digital advertising and a ‘Live’ platform on which to build it all.

Steve talked through the dawn ’til dusk scenario referenced in other sessions – mapping the various Microsoft products and services to the different activities in the home and at work.

If you think the above slide looks like Microsoft overload, you would not be alone. One of the audience questions started with a reference to “the slightly scary 16-hours a day with Microsoft slide…” 🙂

Steve closed his speech with an overview of the plans for AdCenter and a review of statistics from the various services. Some snippets: 243m Messenger users, 465m unique MSN visitors, 60m Spaces, 261m LiveMail users.

Some interesting comments cropped up during the Q and A. Steve’s favourite future scenario – being able to tune in and watch his old high school’s TV channel covering a live basketball game. This is the potential when the Internet enables TV to move to millions of channels. (It’s nice to hear a positive view on having more channels to choose from instead of the usual negative assumptions.)

This post is filed in the Library under Research > Talks

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