Why Is Microsoft Ceding Ad Sales to AOL?

By The Myers Report Archives
Cover image for  article: Why Is Microsoft Ceding Ad Sales to AOL?

Microsoft has ceded its display, mobile and video advertising sales to AOL and AppNexus, with AOL agreeing to absorb up to 1,200 Microsoft ad sales employees. This is one heck of a homecoming for Microsoft’s North American VP Ad Sales and Marketing Bob Bejan, who returned to the company last October after a 12 year hiatus.

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.

MyersBizNet TomorrowToday  
Survey of 360 Advertiser/Agency Perceptions of 36 Digital Sales Organizations
  
CategoryRank Based on % Top Two Box Rating 
 Total Respondents
 Rank*
QUALITY SALES TEAM & CUSTOMER SUPPORT 
AOL4
MICROSOFT23 tie
  
QUALITY OF CONTENT JUSTIFIES PREMIUM PRICING 
AOL11
MICROSOFT23
  
PROVIDES INOVATIVE AND CREATIVE OPPORTUNITIES 
AOL2
MICROSOFT12
  
ASSURES ADVERTISERS SAFE AND LOW FRAUD ENVIRONMENT 
AOL12
MICROSOFT14 tie
  
PROVIDES ADVANCED RESEARCH AND MARKET INSIGHTS 
AOL3
MICROSOFT11
  
SUPPORTS PROGRAMMATIC AND AUTOMATED INVESTMENTS 
AOL4
MICROSOFT14
Source: MyersBizNet 2015 Survey of Advertising Executives 
*Rank among 36 organizations based on respondents who have a relationship with the organization
  
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