Why Is Microsoft Ceding Ad Sales to AOL?

In my recent TomorrowToday reports, I unfavorably compared ad execs’ perceptions of Microsoft’s ad sales efforts to those of Google. The logical question, in light of the Microsoft/AOL announcement, is how ad execs perceive AOL’s ad sales team compared to perceptions of Microsoft’s team. Following are insights from the recent MyersBizNet Survey of Advertiser and Agency Executives on the 36 Digital Media Sales Organizations. Rankings are based on the percentage of respondents who have a relationship with each company rating each company 4/5 (top two box) on a five-point scale. Detailed results on 14 respondent groups are available to MyersBizNet corporate members.

AOL has become a market leader in the ad community, joining Google and Facebook as a dominant force. Microsoft CEO Satya Nadella appears to be a follower of former GE chairman Jack Welch, who advocates investing only in lines of business in which you can be either the market leader or a close follower. Basically, Welch advocates, get serious or get out. Advertising represents a fraction of Microsoft’s revenues with limited upside growth. Advertising is a challenging, demanding and constantly changing business that requires leadership, vision and investments. Based on the results of the MyersBizNet survey, ad execs sent a clear message to Microsoft execs: you’re not a market leader nor are you a contender. Nadella heard the message, and the deal with AOL and AppNexus gave him an ideal opportunity to get out while expanding the presence of Bing, which will now be AOL’s default search engine.