Integration:Holy Grail

• by Joe Mandese  @mp_joemandese, April 1, 2009

Scott Howe and the Quest for the Perfect Martini

When people on Madison Avenue discuss the creation of an ideal advertising system that will one day enable marketers to figure out the perfect way of delivering their ad messages to the right people, at the right time, and with the right effects, they typically refer to it as a "Holy Grail." They use the ancient mythological reference because, like King Arthur's quest to find the miraculous Christian artifact, the ad industry's mission is generally considered noble but unattainable. That hasn't stopped countless organizations from trying, but the latest quest isn't being mounted on Madison Avenue, or even Camelot. It's taking place in Bellevue, Wash., where a new generation of advertising executives, software writers and systems integrators are racing to create a utopian advertising system. The company, of course, is Microsoft, and leading the quest is its Sir Galahad, Scott Howe, the executive who last year succeeded Brian McAndrews as head of the company's Advertiser and Publisher Solutions Group.

But unlike Arthur's grail, Howe's is not symbolized by a golden chalice. Instead, the knights of Microsoft's roundtable are using the contemporary image of a cocktail glass - specifically, a martini glass. But why a martini? A member of Microsoft's communications team has dubbed the project the "Martini Strategy," and the name has come to serve as a metaphor for the creation of a single-source system that will soon enable advertisers and agencies, with the push of a button, to plan, buy, place and measure the effects of advertising across every conceivable media platform that Microsoft controls or touches - everything from online search and display advertising, to interactive TV spots, to in-game messages, to mobile marketing, and even in-store media.

Why a martini? Well, that may say more about the lifestyle of Microsoft's communications team than the company's ability to strike Camelot-like metaphors. "It's code-named the Martini Strategy, because it's good anytime, any place and anywhere," explains a Microsoft spokesperson. Whatever the derivation, the name stuck, and Howe recently met with the editors of OMMA to discuss the strategy in detail, what it encompasses, how long it will take to fulfill, and what implications it will have for advertisers, publishers and the rest of the digital-media food chain.

Howe says he doesn't drink martinis, but he likes the metaphor because it helps articulate what Microsoft is trying to accomplish with its burgeoning, but still largely disparate, mix of digital-advertising assets. The problem, Howe says, is that an advertiser or an agency trying to build an integrated campaign across Microsoft's currently disintegrated assets would need to make upward of 11 separate deals, each of which would need to be trafficked, invoiced and evaluated in 11 separate pieces, creating redundancies and excess labor that might deter media buyers from making the most of what Microsoft has to offer.

"What we're trying to do," says Howe. "Is take the friction out of the process."

The Legend

Howe likens the initiative to the one undertaken by Microsoft years ago to integrate its so-called Office Suite into a single, integrated platform that seamlessly enables PC users to move back-and-forth from one application to another without the need to reload, or rethink, what they are doing.

"At first it was Word. Then it was PowerPoint, Access and Excel," Howe says of the powerful but nonintegrated applications developed by Microsoft's software team. "Now I can do a graph in Excel and copy and paste it in a couple of keystrokes into PowerPoint. Media planners ought to be able to plan an advertising campaign the same way across platforms with a drop-down menu and a few easy keystrokes. All the friction needs to be taken out of the process."

In some ways, the task is even more formidable than Microsoft's original integration of the Office Suite. For one thing, that integration took place with applications created to work on a single operating system - Microsoft's. The new digital advertising operating system, by contrast, has to aggregate and integrate systems operating on vastly different platforms, some originally created by Microsoft, but most of which have been acquired from other companies over the years.

The portfolio is impressive, and includes Microsoft's array of online advertising assets, including search, MSN, Windows Live, Office Live, and its homegrown online advertising network, comprising some of the biggest and most influential publishing partners online.

Microsoft has already taken some initial steps toward pulling these disparate online assets together via new initiatives outlined by Howe during a keynote at the Interactive Advertising Bureau's annual conference in Orlando last month. The initiatives included the creation of a small, influential group of online publishers who will literally design the next phase of Microsoft's online publishing platform. Dubbed the Publisher Leadership Council, the group includes top digital executives from Dow Jones Online, IAC, The New York Times Co., Time Inc. and Viacom, who are forming a steering committee that will design the features and applications powering Microsoft's new PubCenter.

"We're white-boarding the next generation of our technology, and we're giving those folks the pen," Howe said the day of the announcement. Like the overall Martini initiative, the council's goal is to understand the way Microsoft's online publishing partners and their advertising clients work, Howe says, and to make sure the next generation of applications avoid the kind of friction that Martini is seeking to remove from the overall system.

On the advertiser side, Howe unveiled a new version of Microsoft Media Network, an advertising network that will make it easier to integrate direct response and CPA (cost per action) advertising deals.

"We were issuing several invoices for a client, and they had to plan several siloed campaigns, with several sales reps calling on them," he says. "As of March 1, all of that has been collapsed into the Microsoft Media Network. It is a step closer to the be-all, end-all of a network planning system where someone can come in and buy exactly what they want, pay exactly want they want, and sequence their messages exactly the way they want."

A Round Table

If integrating Microsoft's online publishing assets were all it needed to do, Martini would be a simple process. But the reality is that the Microsoft team will need a stiff drink after pulling off an even broader integration with a far more disparate array of platforms and systems than are now in its portfolio.

The rest of Microsoft's Martini mix includes:

Digital television: Through the acquisition of Navic Networks, Microsoft has the technology to place targeted, interactive TV ads reaching more than 35 million digital set-top boxes in North America.

Handheld shopping devices: Microsoft's Modiv Shopper and MediaCart system - a handheld "scan and bag" device, and version 2.0 of the MediaCart, the next-generation computerized shopping cart that delivers relevant ads to consumers at the point-of-purchase - are being rolled out.

Video games: With the Xbox and in-game ad opportunities in mind, Microsoft has worked with dozens of leading companies to create noninterruptive, entertainment-oriented, highly interactive brand advertising in video games through its Massive division. Xbox live, which is seen by 12 million Xbox subscribers in the United States, was the first major service to offer around-game and custom game advertising opportunities. Massive just completed the industry's first gaming upfront in conjunction with its announcement of ad deals with Activision and Blizzard. As it approaches its four-year anniversary in February, Massive is positioned to dominate the in-game advertising business, well ahead of the competition.

Mobile phones: Advertising on Windows Live for Mobile offers advertisers the opportunity to place marketing messages directly where mobile users interact with media. Microsoft provides mobile advertising on its own network, specifically MSN Mobile ads, as well as on premium partner networks. Microsoft Advertising has just signed a five-year agreement with Verizon, the No. 1 mobile carrier in the United States, to manage search and display advertising on Verizon's Mobile Web service, creating a one-stop integrated way for advertisers and ad agencies to reach mobile consumers.

"We have all this stuff, and a lot of it can be integrated today, but it's still very hard," Howe concedes. "They're all the pieces that advertisers are looking for. Because at the end of the day, what do the people in our business really want? They are really all storytellers. And you need to tell those stories across different platforms." The trick, he says, is being able to build a system that can carry that advertising narrative across platforms and devices.

Enter Galahad

If anyone can lead the initiative, Howe can, mainly because he's worked on all sides of the business, and understands the "friction" in a very subjective way. Before succeeding McAndrews as Microsoft's advertising and publishing operations chief, Howe was with aQuantive, which Microsoft acquired in 2007 and has assimilated - with the exception of its digital agency, Razorfish, which continues to operate autonomously from the rest of Microsoft's operations and some observers expect will eventually be spun off.

Prior to Microsoft's acquisition of aQuantive, Howe oversaw both the company's advertising network, DRIVEpm, as well as its ad-server division, Atlas. Before that, he was a senior executive on the agency side at Avenue A | Razorfish and worked on a number of its national accounts. Prior to that, he was a consultant at Boston Consulting Group, and an investment banker at Kidder, Peabody & Co.

Actually, the one skill Howe doesn't have is the one the Microsoft team may most need to pull off the Martini project: writing computer code and software. Luckily, he has the vast army of Microsoft's development team at his disposal to do just that.

"It's essentially a software-engineering problem, but we're good at combining things and making them work better," he assures, adding that the problem isn't simply building an operating system that integrates Microsoft's current portfolio of assets, but one that is open-ended enough to pull in other vital industry partners that would make for truly integrated digital marketing campaigns.

"We need to have a suite of offerings such that advertisers and publishers can come together and bring their own data, plug and play with other vendors, and use us to find whatever they might be looking for," Howe explains, adding that the process has already begun through some key publishing partnerships, especially Microsoft's stake in Facebook, its strategic partnership with VIACOM, and its alliance with an array of top online publishers participating in the Microsoft Media Network.

That breadth and depth of assets and connections makes Microsoft one of only two companies that could possibly pull off a Martini-like play, Howe says. And you need not guess who the other organization is, because Google has made it quite clear its designs for integrating the world of all media. That was evident last year in a keynote delivered by Google ad chief, and Howe's nemesis, Tim Armstrong, at the American Association of Advertising Agencies media conference in Orlando. The presentation featured a working prototype of a dashboard-like system that advertisers and agencies could use to manage all their advertising assets, not just Google's search and display advertising products. And Google, of course, has tried to migrate offline by bringing its resources to the TV, radio and print media industries. Google has subsequently pulled out of both print and radio, but it remains committed to its goal of doing for television what it did to the search marketplace: utilizing superior technology to drive better targeting, relevance and efficiency.

"The big difference is that we have been more open about what we are doing," Howe says, in contrast to the mystique surrounding many of Google's other media initiatives. "From a communication perspective, we've had more appetite to share what has been built and what the success stories are about it."

Hence Microsoft's recent formation of its publishing council, and its outreach to Madison Ave.

Even so, Howe concedes it won't be an easy task, and it will take at least 12 to 18 months before the full architecture of the Martini project is in place and the marketplace begins to see results. Even then, he says, it will be a work in progress as the digital-media marketplace, and Microsoft's role in it, continues to expand, adapt and adopt new forms and platforms that require an ongoing process of integration.