Mark Penn was once a political strategist who worked closely with the Clinton's during their campaigns. Now, he's Vice President of Advertising and Strategy at Microsoft (NASDAQ:MSFT). Shortly after coming on board, Penn started crafting Microsoft's campaign against Google (NASDAQ:GOOGL). It shouldn't surprise you, then, that some of these ads seem more like political attack ads than consumer technology ads.
In the past, Microsoft has only had one competitor to attack -- Apple (NASDAQ:AAPL) -- and it often criticized its products for being expensive. Google, on the other hand, is a threat to the low-end with its Chromebook and Nexus lines. Microsoft seems much more afraid of Google, than it ever did of Apple.
This laptop costs too much
Microsoft isn't a stranger to the attack ad. In response to Apple's popular "Get a Mac" campaign, the company ran several advertising campaigns. First, it ran "I'm a PC," which showed short clips of people, famous and non-famous, proclaiming they are "a PC." Then it ran "Laptop Hunter," which followed someone around looking to buy a new laptop -- inevitably settling on a Windows PC.
The reason the "Get a Mac" ads were so popular and effective was that Mac actually pitied PC. It made consumers aspire to get a Mac. Microsoft's campaigns, particularly the "Laptop Hunter," made it seem like shoppers were settling for a PC.
Microsoft is getting better at attacking Apple, though. It recently ran an ad comparing the Surface RT and the iPad. It succinctly points out several advantages of the Surface, and then provides a side-by-side price comparison. It's simple and effective. Microsoft is so far behind in the tablet and smartphone market, however, that it may need a more compelling reason for users to switch -- not from Apple, but from Android.
This laptop is too cheap
Microsoft started its "Scroogled" campaign last year, which focuses on Google's advertising business. Of course, Microsoft neglects the fact that it has a similar business.
But why is Microsoft so afraid of Google?
Google is able to sell its hardware near cost, which provides more value to customers. Comparatively, Microsoft hardware partners are out to make a profit and have to pay for the right to put Windows on their machines.
Microsoft's most recent Scroogle ad attacked Google's Chromebooks for being inferior products. Chromebooks serve a niche market of people that don't necessarily need intense graphics, gaming, or local programs.
Although Chromebooks are unable to run local programs, they are able to run anything remotely through the cloud. As more and more companies, Microsoft included, make their software available through the cloud, Chromebooks are becoming a viable option for computing needs -- particularly in schools.
Microsoft is afraid of Google's potential to undercut its devices on price. A Google user is worth more to Google than a Windows user is to Microsoft, so Google can sell its products for less. Microsoft makes $50 to $100 off of each Windows 8 license depending on the version. Google, on the other hand, doesn't make any money off of Android or Chrome OS, but makes nearly $30 per year in advertising for every user it gains.
Microsoft's advertising business isn't even close to competitive, and now its licensing business is under attack by Google's business model. That's why Microsoft is throwing jabs at Google. Microsoft can't afford to give away its best software like Google, but it can emulate Apple's success.
Microsoft needs to be more like Apple
I'm convinced that every consumer tech company would rather be Apple than not-Apple. Microsoft is no different -- it's copied Apple for a long time. Most recently, Microsoft's purchase of Nokia's device division has added to this thesis, as Microsoft may find more value in controlling the whole product than just some of the software.
Interestingly, this trend started to take off at about the same time as the Scroogled campaign. Microsoft is reportedly working on improving the ecosystem surrounding its products so that the Xbox, Windows Phone, and Windows 8 can all support sales of one another like Apple's products.
The goal for Microsoft seems to be to make its users more loyal -- maybe as loyal as Apple users. Considering its current position in the PC and game console markets, that should be all Microsoft needs. In the meantime, it may want to work on its advertising.
Adam Levy owns shares of Apple. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.