Microsoft's fight against Apple ads seen as waste of money

[AppleInsider]

With Apple's Mac home market share tripling in the past five years, Microsoft has fought back with its own advertising campaigns attacking Apple for the first time, a move one analyst sees as a mistake.

In Sunday's New York Times, Devin Leonard took a look at the advertising battle between Apple's "Get a Mac" campaign and Microsoft's "Laptop Hunters" and "I'm a PC" TV spots. He said that the ad war between the two companies is "destined to go down in history," with the likes of the Pepsi-Coca Cola rivalry of the '80s and '90s. But in a new note to investors, Charlie Wolf of Needham & Company said the Mac's recent market share gains are a result of much more than advertising. In addition, he said the Windows maker would be better suited using its money to combat overseas piracy in emerging countries.

"One has to admit that Apple’s 'Get a Mac' campaign was humorous if nothing else," Wolf said. "But why Microsoft responded with an ad campaign of its own is a mystery. The company erroneously attributed the Mac’s share gains to the 'Get a Mac' campaign... However, the damage done to Windows' worldwide market share was miniscule. While it’s true that the Mac’s market share has more than doubled in the past five years, Windows’ market share loss was just 2-plus percentage points."

He said that Windows' share of the worldwide PC market is only 70 percent, and that's mostly due to piracy of Microsoft's operating system. Chasing those pirates, Wolf said, would be a better value for shareholders of Apple's rival to the north.

Apple's own market gains with the Mac platform are attributed by Wolf to the iPod "halo effect," in which users become more familiar with Apple products and migrate to the Mac. In addition, he said constant updates to OS X as well as the company's consumer-friendly Apple retail stores have all given the Mac more market and mind share.

"Those share gains began long before Apple introduced its 'Get a Mac' campaign," Wolf said. Apple's share of the U.S. home market, which is the focus of its ad campaign, has already increased from a low 2.9 percent in the second quarter of 200r to 7.8 percent by the time the 'Get a Mac' campaign began, and it eventually rose as high as 12.1 percent in the second quarter of 2008."



In a separate report last week, Wolf went in-depth into the breakdown of recent PC and Mac sales, as Apple saw a 5.5 percent year-over-year increase in sales. He believes those gains were achieved through price cuts in the MacBook Pro lineup enacted on June 8, and that the Cupertino, Calif., company was able to make those cuts without affecting its bottom line due to high profit margins on the iPhone.

In the second quarter of 2009, Apple commanded 8.7 percent of the U.S. PC market, growing from 7.4 percent in the first frame of the year. That as the rest of the PC market slid 1.2 percent year over year.

Contrasting the styles of Apple and its rival, Wolf calls Microsoft's ads "a variation of cash for clunkers," focusing on price and emphasizing that more things are important than just brand.

"What's implied, at least from Microsoft's perspective, is that the only reason the Mac gained share was its ad campaign that derided the Windows PC," he said.

[ View this article at AppleInsider.com ]

[digitalclips]

Which all goes to show Gates had more brains than Ballmer by never doing this. I suspect Ballmer just got mad. Perhaps is was the use of a fat guy as 'I'm a PC' was taken personally?

Seriously though, Apple are smart and know advertising is often used to reassure people after they purchase not just to persuade them to purchase. A new car buyer often takes home a brochure of the car he / she bought to read for example. Apple ads are feel good and funny and perhaps are aimed at switchers, post sale, as much as anything.

[Rot'nApple]

"Pirates of the Overseaing"

Yeah I know overseeing is spelled incorrectly but it is a play on the articles use of "piracy overseas" and the Johnny Depp movie, "Pirates of the Caribbean"!

Anyway, leave the pirates alone, maybe their OS is better?!

[Mazda 3s]

Apple's own market gains with the Mac platform are attributed by Wolf to the iPod "halo effect," in which users become more familiar with Apple products and migrate to the Mac.

That's what happened to me. I went through two HDD-based iPods, an iPod touch 1G, an iPod touch 2G, an iPhone 3GS, and I just recently bought a MacBook Pro and ditched my PC.

[desarc]

Microsoft's fight against Apple ads seen as waste of money... ...by apple fanatics like us.

[paxman]

Originally Posted by Rot'nApple

"Pirates of the Overseaing"

Yeah I know overseeing is spelled incorrectly but it is a play on the articles use of "piracy overseas" and the Johnny Depp movie, "Pirates of the Caribbean"!

Thanks for explaining - but if your joke needs that much explaining perhaps it ain't worth telling. Still, I guess you laughed out loud.

[Quadra 610]

If this wasn't obvious with the first Seinfeld ads, it certainly was with the first Laptop Losers ad.

Further, those in the market for Macs aren't necessarily looking to save. When Apple operates mostly in the Premium end of the market with its Macs, showing middle-America compromising in some outlet store because it can't afford a Mac isn't going to work. Duh!

All Apple needed to do for record Mac sales in a recession was offer modest savings on their fresh Mac models (something they've done historically anyway), which still amounted to $1000+ price tags.

[Maestro64]

Just more validation that M$ does not get it, and Apple beats to its own drum and if you try to out do them or out think them you will loose.

I agree Apple is not a threat to M$ right now, but the tide may turn, and maybe that is what M$ is trying to avoid.


Many years ago when Mac was growing market share one of the ways this happen was student coming out of college and people who bough a mac for home use began bringing their macs to work and over time companies saw the benefit and began support and buying mac for people at work. M$ at that time saw a drop in their corporate accounts, which did not last long because John Scalley screw that up.

Not sure this will happen again, but I am seeing a little of this, especially with the Iphone, people are bucking the system just to have an iphone.

[vinney57]

The recent Microsoft campaigns have been the most ill-conceived and misdirected campaigns from a major company I've ever seen. There is something seriously wrong at the heart of MS; and I suspect it is Ballmer.

[Roc Ingersol]

At least the Seinfeld commercials attempted to build a unique message and personality.
The laptop hunter and 'i'm a PC' ads come across as Microsoft yelling 'nuh-uh!' like a child.

People don't shop for Windows. Period. They either buy what they must, to be compatible with work, for gaming, or they buy something based entirely on hardware/price. Advertising Windows is silly. No-one's really considering it as a positive or negative on its own. It just *is*.


Also, if you want to talk about a waste of money, trying to chase piracy is it. MS likely spends more on copyright protection and activation/authorization schemes than they lose already; and particularly in countries where a Windows license only goes for $10 anyway.

Making Windows impossible to be pirated, even if that were plausible, isn't clearly desirable either. If you did it, those developing nations would switch to Linux. They'd have to. As long as they can pirate it, Microsoft's momentum keeps them as the default choice.

[codachrome]

Suggesting that MS spend their advertising budget on...well...anything else will fall largely on deaf ears. Every major company has set aside marketing dollars and MS is no different. How they spend those dollars is the real question here. So far, I stand with the unimpressed majority.

[billin]

It's basic business strategy that, if you're the market leader, you don't put out ads that mention your competitors. All it does it gain your competitors publicity, making more people aware of alternative products. This is especially so if you have an overwhelmingly commanding share of the market, as Microsoft does.

[teckstud]

This guy must be a major Apple fanboy. The unbiased NY Times article states that the latest Microsoft ads have been very effective when you consider what they've spent vs Apple. Apple even lowered the Mac prices in responce to MS ads and had their lawyer contact MS to stop the ads. That's not effective?
This guy Wolf is speaking out of his A$&!

Here is the article ( I posted it for you all previously on Monday):

http://www.nytimes.com/2009/08/30/bu...edia/30ad.html

[doyourownthing]

Originally Posted by digitalclips

Which all goes to show Gates had more brains than Ballmer by never doing this. I suspect Ballmer just got mad. Perhaps is was the use of a fat guy as 'I'm a PC' was taken personally?

Seriously though, Apple are smart and know advertising is often used to reassure people after they purchase not just to persuade them to purchase. A new car buyer often takes home a brochure of the car he / she bought to read for example. Apple ads are feel good and funny and perhaps are aimed at switchers, post sale, as much as anything.

if the "i'm a pc" guy ever did coke in the ad, ballmer would be taking it personally, otherwise, i don't think so...

[christopher126]

Originally Posted by Maestro64

I agree Apple is not a threat to M$ right now, but the tide may turn, and maybe that is what M$ is trying to avoid.

Poignant observation. In business, 'if you ain't growing, you're dying!' As clumsy as MS is and as deft as Apple is, they both know this truism to be....er, 'true.'

[desarc]

to say that ads pointing out the cost savings of a PC aren't working in this economy is ridiculous.

sadly, the main reason "the tide is turning" is the incredibly poor Vista.
if MS had a decent OS they wouldn't be losing so many customers.

Microsoft is going to push windows 7 and push huge with advertising.
this is going to stop the bleeding, no doubt. i don't think anyone who's switched to mac will go back, and luckily, apple sill has the caché of being high end.

[MacTripper]

People have been burned by low priced/low quality PC's with a inferior security operating system called Windows that requires the help of a local geek and expensive, processor hogging anti-malware which doesn't completely do the job (because it can't detect new malware) for many years now.

People realize that for their own personal use, they don't want the headaches associated with Windows, they don't want to use the same dam thing they use at the office where the local IT guy fixes everything.

Consumers have chosen Mac's because if they need to they can run Windows via Bootcamp and keep from using it online except for updates.

[anantksundaram]

Originally Posted by teckstud

The unbiased NY Times article states that the latest Microsoft ads have been very effective when you consider what they've spent vs Apple. Apple even lowered the Mac prices in responce to MS ads and had their lawyer contact MS to stop the ads.

1) It is 'unbiased' because it is pro-Microsoft?

2) The article's measure of 'effectiveness' is primarily regarding employee morale in the company. Frankly, it made me cringe thinking about what a sad internal state of affairs must prevail at Microsoft, if a Lauren-type ad and their senior managers getting some media attention is the source of corporate morale upliftment.

3) Apple lowered the price for a number of reasons (incl. the recession, the fact that market prices for computers were falling, and the drop in component prices that enables them to maintain margins). There is simply no way you can make the claim that it was in response to Microsoft's ads.

4) Apple's lawyers got in touch with Microsoft to point out information distortion in the ads regarding Apple's pricing, nothing else. And, Microsoft had to redo (at least one of) their ads as a result.

Please stick to facts.

[MH01]

I believe his conclusions are way off. Trying to fight piracy is a waste of time, best way to combat piracy is to reduce prices of your software, not spend money to try to make your systems hack proof. Something the music industry should also get through thier thick heads. Also the same aplies to apple software, given its the easiest to pirate.

I also fail to see how someone who pirates the OS but still uses a PC is not a PC user...that hardware was not free.

Apple has done the right thing with SL, its darn cheap, most people will pay for it cause of the cheap price....though those that pirate, will not even pay the current rrp, they would not care if it was $5, they would still torrent it.

[anonymouse]

Originally Posted by teckstud

This guy must be a major Apple fanboy. The unbiased NY Times article states that the latest Microsoft ads have been very effective when you consider what they've spent vs Apple. Apple even lowered the Mac prices in responce to MS ads and had their lawyer contact MS to stop the ads. That's not effective?

Actually, as I recall from reading that article, it said that while it at first appeared that MS's adds were effective, that the rebound of Apple's sales indicates that all that was going on was that economic conditions had made it temporarily look as though the ads were effective. In other words, the belief that they were effective was simply a confusion of cause and effect.

[HammerofTruth]

They made an OS that ran like crap on your old computer, so you would need to buy a new one. Then they moved everything around so you can't find anything and had to learn a new system all over again. Then they made the graphics look like a Mac. So people started saying "Why don't I just buy a Mac?" and they did.

The laptop hunters ad just reaffirms the warm happy feeling PC geeks get when they point out that they don't have to spend a $1000 to get a computer like Apple's and have a "comparible" experience. Which misses the boat entirely.

[Quadra 610]

Originally Posted by teckstud

This guy must be a major Apple fanboy. The unbiased NY Times article states that the latest Microsoft ads have been very effective when you consider what they've spent vs Apple. Apple even lowered the Mac prices in responce to MS ads and had their lawyer contact MS to stop the ads. That's not effective?
This guy Wolf is speaking out of his A$&!

Here is the article ( I posted it for you all previously on Monday):

http://www.nytimes.com/2009/08/30/bu...edia/30ad.html

MS was misrepresenting Apple's prices. That's a legal issue.

And I'm sure MS went to all that trouble, spending hundreds of millions of dollars, in order to help Apple sell more Macs and turn out a record quarter in a recession, while turning out a history-making lousy quarter themselves.

The MS ads were very effective. For Apple. May MS continue with these ads.

[brucep]

Originally Posted by vinney57

The recent Microsoft campaigns have been the most ill-conceived and misdirected campaigns from a major company I've ever seen. There is something seriously wrong at the heart of MS; and I suspect it is Ballmer.

yes yes
but noooooooo

!!!!!

Balmer is a geniuus at mis direction /he gets us to look away from his bloatware window7/vista crap monopoly
by inventing fake issues .

THE msft ADS INCREASED SALES FOR ALL LAPTOPS
INCLUDING APPLE
because MSFT sells A TON OF SW TO APPLE PEOPLE .
MSFT sells to both sides of the aisle .

So why would balmer boy seem to attack apple ?? or did he ??
andf why has msft never responded to those 60 od apple ads till now ???

MSFT needs a strong apple to hide its only money making cash cow > that 91 % of p/c users are forced to buy/live with . because its an UNFAIR MONOPOLY IF NOT FOR TINY APPLE .
Balmer is a billionaire many times over he is not stupid .
But making us think he is a jerk idiot turns our attention away from the truth /
MSFT MaKES MONEY ON ALMOST on all OS'S .


duh

[teckstud]

Originally Posted by Quadra 610

MS was misrepresenting Apple's prices. That's a legal issue.

And I'm sure MS went to all that trouble, spending hundreds of millions of dollars, in order to help Apple sell more Macs and turn out a record quarter in a recession, while turning out a history-making lousy quarter themselves.

The MS ads were very effective. For Apple. May MS continue with these ads.

Wrong - they were only misrepresenting Apple's price$ after Apple responded by lopping $100 off Macs.
Please stick to facts no matter how much it hurts you to.
May MS continue with these ads- I personally wouldn't mind another $100 markdown as I'm in the market to buy this fall .

[brucep]

Originally Posted by vinney57

The recent Microsoft campaigns have been the most ill-conceived and misdirected campaigns from a major company I've ever seen. There is something seriously wrong at the heart of MS; and I suspect it is Ballmer.

yes yes
but noooooooo

!!!!!

Balmer is a genius at mis direction /he gets us to look away from his bloatware window7/vista crap monopoly
by inventing fake issues .

THE msft ADS INCREASED SALES FOR ALL LAPTOPS
INCLUDING APPLE
because MSFT sells A TON OF SW TO APPLE PEOPLE .
MSFT sells to both sides of the aisle .

So why would balmer boy seem to attack apple ?? or did he ??
andf why has msft never responded to those 60 od apple ads till now ???

MSFT needs a strong apple to hide its only money making cash cow > that 91 % of p/c users are forced to buy/live with . because its an UNFAIR MONOPOLY IF NOT FOR TINY APPLE .
Balmer is a billionaire many times over he is not stupid .
But making us think he is a jerk idiot turns our attention away from the truth /
MSFT MaKES MONEY ON ALMOST on all OS'S .


duh

[anonymouse]

Originally Posted by brucep

Balmer is a billionaire many times over he is not stupid .

Well, he may not technically be "stupid", but I don't think he's "super smart" either. Most of his success, and fortune, is due to the fact that he was BG's college buddy, and little else. But for that lucky circumstance, he probably wouldn't be flipping burgers, but he wouldn't be running a mega-corporation, either.

But, I definitely think MS should keep him at the helm for as long as he wants to stay.

[Leonard]

Originally Posted by anonymouse

Actually, as I recall from reading that article, it said that while it at first appeared that MS's adds were effective, that the rebound of Apple's sales indicates that all that was going on was that economic conditions had made it temporarily look as though the ads were effective. In other words, the belief that they were effective was simply a confusion of cause and effect.

Yes, I just read the whole article and that seems to be the conclusion. That it first appeared that the Microsoft ads were having an effect, BUT, that it really was the economy and not the ads.

So poor teckstud is incorrect that they had an effect, if he's using that article as his proof.

[teckstud]

Originally Posted by Leonard

Yes, I just read the whole article and that seems to be the conclusion. That it first appeared that the Microsoft ads were having an effect, BUT, that it really was the economy and not the ads.

So poor teckstud is incorrect that they had an effect, if he's using that article as his proof.

When you consider the fact that Apple has spent nearly double what MS has spent yet gained so little market share, which is more due to Vista's failure, then the deduction to be made is that Apple's ads have been highly ineffective. That is the fact. Prove me otherwise, poor Leonard.

[piot]

Originally Posted by teckstud

Apple even lowered the Mac prices in responce to MS ads and had their lawyer contact MS to stop the ads.

You really believe that if a competitor lowers their prices... and therefore sells more units.... thats a good thing?

That's not effective?

Yes. It's not effective!

Spending 300+ million dollars and roughing up internet fanboys .... is not effective.
Causing your opponent to complain because you have made a mistake in an ad... is not effective.
Telling ordinary folk that they can buy a PC for $700 instead of $1000.... might be effective but for HP and Dell etc....its not effective.
Apple still being able to still increase their sales, during a massive recession... doesn't seem to be.... effective.

DISCLAIMER: I am quite certain that Microsoft's four ad campaigns have managed to persuade some people not to switch to a Mac. But the point is ... how many?

For every Mac switcher apple gains an average of $1400 in revenue.
For every switcher that Microsoft manages to stop they get a revenue of around $45. (est OEM Windows licence)

$300 million dollars would need about 7 million NON-switchers to pay for the campaigns.

It's really simple. Microsoft's BEST strategy would be to make a better product. Windows 7 appears to be better than Vista, and the Zune HD appears to be better than every other Zune that came before it. I am certain that the next $300 million Microsoft spends on advertising will likely be more... effective.

[teckstud]

Originally Posted by Leonard

Yes, I just read the whole article and that seems to be the conclusion. That it first appeared that the Microsoft ads were having an effect, BUT, that it really was the economy and not the ads.

So poor teckstud is incorrect that they had an effect, if he's using that article as his proof.

The fact remains that the gist of the article favore MS for now in the ad war.
And not for nothing -are the prices going to go back up once the econmy improves? Doubt it. The perception that Apple is overpriced was effecrtive in those ads- whether you agree with them or not.

[Chris_CA]

The difference between MS/Apple and Pepsi/Coke is that Pepsi/Coke have roughly the same market & market penetration and are ~ the same size companies.

MS with their market size vs. Apple, simply makes them look like they are really scared of the "little" guy.

If Balmer would simply keep his pie hole shut about Apple, it would make him look like much less of an idiot.
Besides, MS should be pushing to sell Windows to Mac users. I imagine they get far more $$ from the sale of a retail version of Windows than they do for an OEM install.

[teckstud]

Originally Posted by piot

You really believe that if a competitor lowers their prices... and therefore sells more units.... thats a good thing?




Yes. It's not effective!

Spending 300+ million dollars and roughing up internet fanboys .... is not effective.
Causing your opponent to complain because you have made a mistake in an ad... is not effective.
Telling ordinary folk that they can buy a PC for $700 instead of $1000.... might be effective but for HP and Dell etc....its not effective.
Apple still being able to still increase their sales, during a massive recession... doesn't seem to be.... effective.

DISCLAIMER: I am quite certain that Microsoft's four ad campaigns have managed to persuade some people not to switch to a Mac. But the point is ... how many?

For every Mac switcher apple gains an average of $1400 in revenue.
For every switcher that Microsoft manages to stop they get a revenue of around $45. (est OEM Windows licence)

$300 million dollars would need about 7 million NON-switchers to pay for the campaigns.

It's really simple. Microsoft's BEST strategy would be to make a better product. Windows 7 appears to be better than Vista, and the Zune HD appears to be better than every other Zune that came before it. I am certain that the next $300 million Microsoft spends on advertising will likely be more... effective.

Read the article -Apple spends $300 million. MS only $160 at most.

[piot]

Originally Posted by teckstud

Wrong - they were only misrepresenting Apple's price$ after Apple responded by lopping $100 off Macs.

That's irrelevant. It doesn't matter when the commercial was shot... or first broadcast. You said it yourself. "misrepresenting Apple's price$".

Apple complained.
Microsoft re-edited the ad.

Please stick to facts no matter how much it hurts you to.

Ditto!

[Chris_CA]

Originally Posted by teckstud

This guy must be a major Apple fanboy. The unbiased NY Times article states that the latest Microsoft ads have been very effective when you consider what they've spent vs Apple. Apple even lowered the Mac prices in responce to MS ads and had their lawyer contact MS to stop the ads. That's not effective?

You think Apple lowered their prices $300 simply in response to these ads?
It may have played a very small part, but more likely market prices of building a computer have gone down. Also, market demand/prices for computers (everything really) in general have gone down, due to the economy.

[teckstud]

Originally Posted by piot

You really believe that if a competitor lowers their prices... and therefore sells more units.... thats a good thing?

From a consumer's point- HELL YES!

[anonymouse]

Originally Posted by teckstud

The fact remains that the gist of the article favore MS for now in the ad war.
And not for nothing -are the prices going to go back up once the econmy improves? Doubt it. The perception that Apple is overpriced was effecrtive in those ads- whether you agree with them or not.

Well, I guess you can read into it whatever you like...

[teckstud]

Originally Posted by Chris_CA

You think Apple lowered their prices $300 simply in response to these ads?
It may have played a very small part, but more likely market prices of building a computer have gone down. Also, market demand/prices for computers (everything really) in general have gone down, due to the economy.

Do I find it somewhat too coincidental that Apple lowered the prices after MS broadcast the ads , then contacted them to cease broadcasting them cause they were no longer valid? - Yes I do.
Why only then? Why not Jan during Macworld?

BTW - it was $100.

[Hattig]

When Coca Cola advertise, it is for brand awareness / reminders. That's why the ads are so surreal, so you remember them. Other Coke adverts are heart warming, etc, so you associate good times with Coke (no, not that coke!). Same with car adverts, since when did a car advert, or a perfume advert, actually say what was good with their product? It's all aspirational stuff. You can be a better more attractive person with this car/perfume.

When Apple advertise, it's tongue in cheek education. You can do this, that and the other easily! People remember that you can do those things on the Mac when they next look at computers, and for some, it helps them get over the sticker price difference, when they remember the problems they had with their previous PC (which would have been XP at the time). We're just about coming up to the Vista switchers, those that got Vista, and hated it. Apple should probably advertise something to remind people that they've been burned with Windows in the past, and they shouldn't go and get burned again. Mainly because Windows 7 probably won't burn them if they get that far...

[cmf2]

Originally Posted by teckstud

From a consumer's point- HELL YES!

But what makes it a success from Microsofts point of view? Microsofts record dip in profit, or Apple's record profit for a non-holiday quarter?

[teckstud]

Originally Posted by cmf2

But what makes it a success from Microsofts point of view? Microsofts record dip in profit, or Apple's record profit for a non-holiday quarter?

I said it was an effective ad- that's all. And that can mean many things. It appears that MS is driving the price point home- that's all. Keeps more people from switching in a bad economy.