Q&A with Richard Dunmall, VP Microsoft Advertising Global Accounts and Agencies

On Monday Richard Dunmall, the Vice President of Global Accounts and Agencies for Microsoft Advertising was in Toronto talking to marketers and agencies. 2012 is a big year for Microsoft as it prepares for the launch of Windows 8 which represents the biggest change to the company’s operating system in more than a decade.

Along with growing their presence in mobile through Windows Mobile and the launch of the Microsoft Story Awards they continue to grow. Richard took a few minutes to talk to Marketing Magazine about what lay ahead for Microsoft, the industry, and their partners.

Microsoft Advertising is running a contest called the Windows Story Awards, why do this content now?

What we are seeing in the industry is a new form of storytelling or a new opportunity around those experiences. This allows brands to come to life, for agencies to delight the clients they work for, and for creatives to build new experiences. So we feel like we have a great opportunity to celebrate that through competition.

The people we work with are ferociously competitive with each other and we want to celebrate that creativity. Particularly with younger talent that has grown up in the digital age and so it is strategic for our partners to get involved because they are trying to grow digital and it is strategic for us because it means more opportunities.

How is Microsoft competing against the likes of Google, Facebook and AOL for ad dollars?

We see the opportunity for us is to create and introduce new advertising experiences across new devices and new forms of content. Xbox is still a relatively small advertising business for us but clearly, very exciting. Increasingly Xbox is less just about gaming and more about media. We have more subscribers on Xbox than on Comcast in the States, the introduction of Kinect democratizes the living room and the TV experience even more that will help us to grow.

I think our acquisition of Skype allows us to continue to play in the social video space and brands are really excited about how they can build experiences around that which is a very emotional connection between people.

What are advertisers and agencies looking for from partners like Microsoft and your competition today?

Generally speaking and I’ve met with plenty of agencies in Canada and its similar in most mature markets. We want to grow the total digital share of wallet, so I think Canada today is at 14% of total media investment goes into digital. There is clearly a shift from a consumer perspective on to more devices, more different forms of content and yet media expenditure lags behind that. So the audience opportunity is behind the media investment.

Where do you see innovation coming from, niche digital agencies or traditional, full-service ones?

It’s an ongoing debate and I think it varies by market and by company. Clearly digital of some description will always be the tip of the spear and be driving the initial agenda. But what I think we are seeing more and more globally is that the bigger players are continuing to consolidate and their digital capabilities are increasing rapidly.

That is also the case on the brand side as well if you look at Proctor, Unilever, Nike, and Coca Cola. They are really doubling down from an innovation perspective because that’s where their next billion consumers are going to come from.

What role does mobile play for Microsoft?

There are two parts to mobility, what is happening from a consumer experience and what is happening from an advertising perspective. So we come from very humble beginnings in the mobile space, we have a very low market share globally. That said most projections would have us the number 2 smartphone operating system by 2015, after Android interesting enough.

What we realize coming from a lower market share position we had to do something a bit different. A lot of that innovation is around the metro interface. The tiles really pops the things that are really the most useful in your life whether it is your social connections or the tasks you want to complete its all just there. It’s quite a fluid experience and what we’ve learned is that has a direct impact on the advertising experiences that you’re going to see on the platform.

Why has mobile advertising never really taken off?

The reason mobile advertising has never taken off is that it is fundamentally a different experience. What we’ve seen with what we would call the appification of the web is people are looking for ways to complete everyday tasks.

I think increasingly you are going to see two things within the mobile space. You are going to see more personalized experiences based on the apps most relevant to your life and that’s a really interesting opportunity for brands. Secondly I think a lot of what we will see is going to be geospatial so local, promotions, information, activities, and search.

Last year Microsoft introduced polymorphic ads, which makes it easy for ads to scale based on the device. How have brands and agencies responded to them?

There is a lot of excitement for it and we are still in the process of working with key partners to scale it out. But I think it has a number of benefits, there is a level of efficiency in creative production because of good cost efficiencies around building creative experiences. It allows them to use a partner of Microsoft’s size to get that scale rather than having to do it exclusively themselves. I think number three is it gets away from what I would describe as matching luggage.

So a lot of creative in the digital age is still essentially TV creative that is sort of jammed into a mobile experience or into a PC experience and I’m not sure that’s a strategy for long-term growth because they are fundamentally difference experiences. So I think this is the first stake sort of stake in the ground from us to make it an intuitive process.

How do brands and agencies use display ads, social media and content in their advertising today?

One of the big things on marketers and agencies minds is what’s the balance between paid, owned, and earned media? Facebook has done a tremendous job of being the largest word of mouth platform in the world today.

I think those things are interesting but the big debate for marketers though, is what is the value of that fan base? Coca Cola have more fans than anyone on Facebook but I’m not sure they know what to do with them. I think what’s interesting as well is does that mean I need to pay for advertising on Facebook because I’ve already got terrific connections with consumers.

What the industry is questioning is OK so I have all these people talking about my brand, why would I need to advertise in a tiny little box on the side and I don’t think it matters at the moment because Facebook is such a phenomenon but over time the lifetime value of those consumers is that environment will be questioned.

***UPDATE*** I did this interview for Marketing Magazine in late February with Richard Dunmall, who was the VP Microsoft Advertising Global Accounts and Agencies but they never ended up publishing it as far as I know. My gut is telling me that since Richard left Microsoft soon after he came to Toronto, that may have killed its chances of it ever getting published but I may never know.