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April 10, 2009 5:52 PM

Microsoft Ads Don't Attack Mac Pricing



News Commentary. Mac defenders and even some Microsoft supporters are wrong to think so.

[Editor's Note: In recognition of the Easter and Passover holidays, and presumably fewer readers, please expect fewer posts and shorter lengths for today. You can read and run .]

In my 2009 advice for Microsoft, I encouraged the company to fire ad agency Crispin Porter + Bogusk. Early "I'm a PC" commercials were marketing misses. But the newer series—"The Rookies" and "Laptop Hunters—are Grade A advertising. The first in The Rookies series, featuring Kylie, was the TV commercial most recalled by consumers from Feb. 2 to March 1, according to Nielsen IAG Research rankings. The first in the "Laptop Hunters" series, featuring Lauren, was a huge viral marketing success, setting off fierce debate about the price of Macs versus PCs.

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It's good Microsoft didn't take my advice. The Laptop Hunters commercials, now three of them, are amazingly good marketing. They're so good that Crispin Porter + Bogusk has Microsoft executives, employees and supporters confused about them. While the debate has been about price—that Windows PCs cost less than Macs—the commercials are about value. This distinction seems to be lost on everybody, particularly the Mac camp, which also puts forth a value argument.

In each of the commercials, price has been one of the buying criteria—and by no means the only one. The price isn't low either. Lauren searched for a laptop with three basic criteria, one being 17-inch screen, for under $1,000. In the second ad Giampaolo and in the third Lisa and Jackson had several different criteria and a budget of under $1,500.

If Microsoft's marketing objective was price, the buyer's budgets wouldn't be so high. In February, the average selling price of Windows laptops at U.S. retail was $560, compared with $1,512 for Macs. If the ads were really about price, all the commercials would feature people shopping with much smaller budgets, say, $600-$700. Instead, Microsoft has chosen big spenders, the kind of shoppers who could afford to buy a low-end Mac.

Contrary to all the pricing punditry, the ads are more about value and improving the appeal of Windows laptops in the margin-rich "premium PC" market, where at U.S. retail Apple's market share is about 80 percent, according to NPD. Sure, the commercials jab at Apple, but it's short-sighted to see the poking as the primary marketing goal. Apple's huge premium PC market share means that most people spending $1,000 or more are shopping for Macs. The Microsoft commercials would be unrealistic to ignore Macs in the pricing segment they dominate.

Rather, the commercials compare and contrast the value of PCs against Macs within the price ranges. For Lauren, the 17-inch screen shows the value of PC against a Mac. Screen size was her top priority. Even if her budget had been $2,000, rather than $1,000, she couldn't have purchased a 17-inch MacBook Pro. It starts at $2,799; Lauren spent $699.99. In the second commercial, Giampaolo chose an HP laptop that accommodated his big hands and met his preconceptions about performance and power. He spent $1,099.99.

The third commercial, which first aired yesterday, essentially removes price as a major factor. Mother Lisa and son Jackson do have a budget of $1,500, but the TV spot never says how much the Sony Vaio cost. But it does emphasize the Sony laptop's value over Macs. Gaming was one of the shoppers' priorities, and the Sony offered a Blu-ray player, an unexpected feature that appealed to mother and son. MacBooks are notoriously weak gaming machines compared with Windows PC; Apple doesn't ship Blu-ray players on any Mac.

Yesterday, Microsoft blogger Brandon LeBlanc hit and missed the point. The hit: value. The miss: The commercials are about price. They aren't. He blogged:

It is human nature to focus on the up-front price. The coverage around our Laptop Hunters ads jumps right to that ("PCs are cheaper"). The harder thing to capture is the overall cost and the VALUE. ... Cost is getting something cheaper. Value is a function of getting more of what you want, regardless of what you spend.

The commercials are about value, not price, and they're marketing designed to reach buyers with big budgets in a declining economy. Microsoft is taking on Apple in its core market segment: consumers willing to spend $1,000 or more on a new computer. Mac and Windows fans can debate about value, and it's a discussion I encourage in the comments. But the debate about price shouldn't be, because the commercials are about so much more.

[Please send your tips or rumors to watchtips at gmail.com.]

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Comments (28)

chips b malroy :

Joe says:
"Yesterday, Microsoft blogger Brandon LeBlanc hit and missed the point."
----------------------------------------------------
Excuse me if I an wrong Joe, but is this the same LeBlanc that works for Microsoft? Come on, if it is couldn't you find someone impartial to quote? Is this site bought and paid for by M$? What gives???

While I actually agree with the point that Macs are too expensive, they still may have more value to most people than a Windows computer. Because of the Windows malware issue is a big one for most Windows users. They could just download Linux and put it on their old computers, even as a dual boot system, that would solve the malware issue too, without costing them money. But most here in the USA will just go down and buy a Mac when times are good.

Macs use the same chipset for Video, cpu's etc, since they have converted over to X86, there is very little electronically speaking different from a Mac than a standard Intel based computer. Notice I did not say a "windose" computer. So the difference in value is the Mac OS X operating System. This is where Linux and Mac shines way above the Malware target Windows. If I have offended any Mac users out there please forgive me.

Pablo :

Jo:I must agree that blueray is important.To spend 2,000 or so on a computer and end up without it is unthinkable. That is one of the factors driving down Mac sales,the bubble is bursting.The Palm pre ,Nokia n97 and various Android devices coming this year may do the same to the Iphone too.Blackberry OS 5.0 will be out in a month and is much faster and integrates the trackball and touchscreen.If it includes a browser upgrade then it will be game over for the Iphone.


Joe :

chips b malroy wrote: "Excuse me if I an wrong Joe, but is this the same LeBlanc that works for Microsoft?"

Hi, Chips,

I purposely used Brandon, to make the point that even people working for Microsoft don't understand what the ad agency is trying accomplish.

Joe

Anonymouse :

Of course MS is attacking Mac pricing; how can it not be?

"I don't have much money, I'll get a (non-Mac) PC instead."

This is not great advertising - it's only slightly less dull than the Seinfeld ads. Apple is not a competitor; they remain primarily a hardware company but MS seem obsessed with getting every last bit of the OS market. I can't afford a Mac - boo hoo hoo - so what? Well, I can buy a non-Mac PC. Yay! And what else? Pay the MS tax of course.

For me the ads seem to be saying "All our guys are looking at Macs but just can't afford one or else can't really rate the specs so they settle for a non-Mac". How is that meant to be great advertising? The basic assumption is that *everyone* thinks 'Mac' when a PC is mentioned and everyone *wants* a Mac - but hey, get over it and get something else. Macs have what - about 4% of the PC sales? Yet they are a HUGE part of the MS ads - hilarious. MS has no real selling point if all they can come up with is "you can buy a cheaper machine which isn't a Mac."


KGWagner :

I guess I still don't understand why Microsoft feels they have to poke at Apple. It's like a professional football team cornering a cat. What are they going to prove, and who are they going to prove it to? Do they think they're going to change anybody's mind about Apple computers? It would be easier to open a Catholic mission in Iran and work on converting the population there.

I suspect Apple is enjoying all this free publicity. If Microsoft is frightened of them, people are going to wonder why and take steps to find out. Then they're going to remember that Microsoft thinks a decent laptop costs $1,500, and the move to a $1,600 or $1,700 Mac isn't going to seem like too far a stretch to get a machine that's immune to all the slings and arrows Windows gets hit with.

Massive Quasars :

@Pablo :

Don't undersell the popularity of the iPhone. I don't own one myself because as a smart phone I find them woefully inadequate. But I don't think the iPhone is in any real trouble. Especially not from Android. It's also makes a crud smartphone. The BlackBerry is a threat however. In fact I own a blackberry and it's the best damned Smartphone I've ever owned.

As for the whole blu-ray thing. I'm not sure blu-ray is even going to take off as a standard. It's nice but it's never going to be a major selling point for me. Now Gaming is. It suprises me that Apple never targeted that market.

Massive Quasars :

@KGWagner

Microsoft is doing the same thing that Apple did on the advent of Vista's dismal launch. Trying to take advantage. In this case it's the Economy. Convince people that Macs are just pricey show pieces, Like Apple tried to convince people that PC's are buggy, stale, boring, lackluster devices used by old white men to create spreadsheets while
oftentimes crashing.

Joe's the marketing wonk here, He thinks Microsoft's campaign is effective. Me I don't really care. I don't need to be sold to. I do own a Mac, but only because I can run OSX, and Vista. best of both worlds as it were.

Will :

Brandon LeBlanc:' Cost is getting something cheaper. Value is a function of getting more of what you want, regardless of what you spend.'

Perhaps the Microsoft employee is correct: Windows-based PCs really do offer more when cost-cutting is the criteria, giving a very low initial outlay but with a very high TCO, and that Macs offer more when value for money is the guiding principle, with a higher initial cost but a far lower TCO.

KoppyPoppy :

Microsoft is advertising lower prices, so in what universe is that not the message that consumers will end up with?? Value? What the hell is value to a normal everyday person? A non technical guy will say , this is $X and that is $Y so lets go with the cheapest. Thats a price assesment not a value judgement. Microsoft doesnt know what a value judgement looks like because they are not ethical. Thats right, if you have no values of your own you are not going to recognise value, are you?
Microsoft = no values, no ethics, no future.

CANCER :

Cancer pops up when you least expect it. Cry Balmer Cry.

billybob :

What will Microsoft do when Apple releases Snow Leopard and then starts comparing it to Vista directly?

I can imagine a 30 second ad at the start of the break that copies a file, the Mac is finished before the first 15 seconds. We are still waiting for Vista at the end of it. At the end of the break, we go back to see Vista finally finish.

Will :

@Pablo: BlueRay is very unimportant at the moment, and it's main purpose in computers just now is to bestow bragging rights.

@KoppyPoppy: I don't believe Microsoft's current series of ads is advertising lower prices. Prices lower than Apple's, certainly, but not lower than the current ASP of laptops. It appears to me that one of the aims of this series of ads is to help out Microsoft's partners by comparing their products to Apple's and telling customers to spend, spend, spend!

Can anyone tell me how a laptop can be considered a 'gaming machine'?

jay :

@billybob

With Snow Leopard set to release in early June, that commercial you speak of will have very little run time, given that W7 will probably RTM by July. From what I've read, the most recent W7 builds have moved significantly ahead of Vista and even XP3. Moreover, it will be interesting to see how simple things like file copies, moves, and deletes compare between SN & W7. I suspect that they'll be very close with SN probably having a slight edge, which would hardly be worth building a commercial around.

colin Denzel :

Joe:

You seem to love these ads because they are so great at pointing out the value of a PC compared to a Mac.

Then you complain that most people see them as pointing out the lower cost of a PC, and miss the value side.

If this is the case, the ads are ineffective, everybody is missing the point.

I think the ads were created by bloggers to create more clicks.

@Will:
As usual Will you make a lot of sense. Blueray may never make it. Even M$ is not putting it in their XBox360's, even after supporting the larger than standard DVD, with HD-DVD the failed format from Toshiba. One wonders if M$ needed the larger format of the HD-DVD for the XBox360, how it could just go back to the regular size DVD instead of the Blueray? The answer could be your statement "BlueRay is very unimportant at the moment," and not really needed. Blueray and HD-DVD were a way of Micro$oft getting the draconian DRM into Vista, which clearly is the only thing that is eating up all the extra cpu cycles and memory over XP in Vista and Seven. For those who want to respond to this challenge, please tell us where 5x the memory usage in 7even over XP is going to.

Blueray is at present struggling to displace regular DVD's. I suggest it will not make it, at least for a long time, for the following reasons.

1. It took a long time for DVD to replace VHS. For one simple reason, most people wanted the record function of the VHS. And there are still people using this. There are a lot of people who will not buy into a DRM system that will not easily let them back up their disks. Just a fact, wither you think its piracy or not.
2. DVD's can be bought on sale for as little as 20 to 30 cents per blank, they are the new floppy disk. Blueray blanks cost way too much. They would have some use when the price comes way down on the burners and the blanks as backup devices for PC's.
3. DVD is good enough for most people. If fact, on tv screens up to 37", it is very unlikely you can see the difference.
4. A lot of people are tired of replacing their whole collection with a newer medium. First there was LP's to CD's. Then VHS to DVD, and now they want us to pay more for Blueray? The other sad truth is that America and many other countries are greying, getting older. Older folks eyesite may not be as good, so the Blueray advantage on very big monitors may not been clearly seen by a huge segment of the population that can afford it.
5. As Broadband become more prevalent, digital downloads may replace any need for Blueray.

billybob :

"From what I've read, the most recent W7 builds have moved significantly ahead of Vista and even XP3."

Yes, but have they moved ahead of Snow Leopard? Nobody knows because Apple do not go around showing everyone their beta code. Microsoft are only doing it because they want to stop people moving to other systems.

My whole point is that Windows 7 may be great but only when compared to previous Microsoft Operating Systems.

I think we should wait and see before making rash decisions. You are only going by what you suspect. How do you know any more than anyone else?

I have about $1500 and am looking for a new Laptop, it must be Aluminium and come with a really good screen and weigh no more than 4.5 lbs. Other than that, I have no requirements. What offers me the best value?

I guess I am not cool enough for a Voodoo Envy or a Dell Adamo :( I don't want to pay for a logo anyway.

@Billybob,
The aluminium case is a factor when purchasing a laptop. I will not buy a laptop that is not "rugged." Once bought a T20 Thinkpad, it had a crack above the cdrom drive on the plastic, and mostly likely this was what caused the ultrabay errors. But also it said on their website that this was a lite weight laptop that needed to set on a solid flat surface. While most likely this was just the laptop I had, it would make me stop buying any newer T series Thinkpad new. Later on, I got an A series thinkpad which was rugged and made to replace desktop computers, which was perfect for me. The point being that different folks need different types of computers depending on how they use them. And the Mac could be the one, just for the hardware as I think you were implying. Certainly, the OS has a whole lot less malware than Windose, but that would also apply to Linux having less malware as well than windows.

So yes, the chassis does matter, as another point to look at when buying.

Clump :

Blueray is getting very popular. It's nice to pretend but Blueray is getting very popular. Where I rent it is taking over more and more shelf space. Put blinders on all you want, however Apple is behind the times.

So it is funny how the Apple supporters try to pretend something is unimportant because Apple doesn't have it. Maybe it is unimportant - to you - and because - Apple doesn't have it ..

.. but to the rest of the computing and video watching public it is important.

But if you miss any of your favourite I'm a Mac Guy videos that come out on Blueray, you can still pop some popcorn, call up your rainbow coaltion Mac friends, fire up Safari and catch a grainy version of them on Youtube:

http://www.youtube.com/watch?v=4lL2F6mw9pk

Hey Klump or whoever u r
Bluegay is for rich people and what the heck, like anyone can tell the difference on a 17" laptop display over a standard DVD. I know that you and the other Andrew types here have to plug the bloatware DRM from MSFT, but give us a break, pleeessseee! Bluegay is not important on the laptop. And any company dumb enough to only put their movie on a bluegay disk and not on a standard DVD is going lose most of the market and go broke.

When and if Bluegay ever becomes worthy enough to waste money on, then Mac will get it.

Well, its seems God has spoken. LOL, but not sure I would have worded it that way. Anyway, Blue-ray is like Clump saying gaining some market share, they do sell in Walmart for instance. Maybe Blue-ray will make it, and maybe it will only get up to the same market share that Sony Betamax got? So if Mac and Linux wait to see if its really needed or not, before pouring in resources and money into what can still be a failed project, this could be the wise route. Escaping all the DRM associated with M$ and Blue-ray however, is a good thing, thank you GNU/Linux for that. And with NeroLinux in Linux, I can still burn and read disks, so at least in Linux, there is some Blue-ray support.

Blueray just for the rich? I doubt that, as there are folks with big home entertainment system, with Blue-ray, I have seen them. They are not rich either, but are upscale income folks. At this point, I would however agree, that Blue-ray is too costly for the masses, even in the USA. That could change, but the prices of Blue-ray blanks must come down a long way for Blue-ray to make it. Blue-ray support is not hurting the Mac, in fact, the DRM that Vista/7even had to put in, is helping Mac, by not having the hegative performance issues.

Clump :

@The far left hand of God

You say: "Bluegay is for rich people .."

As if Macs aren't. Media types, the rich in ivory towers, artistic types .. the rainbow coalition in general .. that's the Mac demographic [watch this clip from the I'm a Mac Guy if you need more explanatation: http://www.youtube.com/watch?v=4lL2F6mw9pk ]. But Macs sucks so that they [Apple] don't even provide this "elite" with Blueray even though a Mom and son can get one on a PC.

Call Steve and tell him to get you Blueray sometime this year if it is not to much to ask. Of course, you will have to pay big bucks to an Apple technician to swap out the old drive from your iMac and put in the new Blueray drive, but that can't cost more than three or four hundred dollars can it?

jay :

@billybob

Has anyone ever done a Mac OS X versus XP3 file
performance test? Probably not. In some cases, it would appear that Vista was a step backwards in terms of file management performance. Consequently, it's absolutely reasonable to think that with 7's performance besting XP3 it (i.e., W7) will compare favorably with Leopard. Moreover, it's hilarious that you'd suggest that Apple produce a Leopard vs Vista file management performance commercial with W7 most likely RTM'ing within 30-45 days of Leopard.

Dude, no one is saying Mac OS X is a slouch, especially when compared with Vista, but you've got to get off this aluminum case thing. Sure, it's a nice to have and makes the laptop more rugged, but I've never known anyone to break a laptop case. Certainly, it happens, but its occurrence has to be fairly low. In my opinion, the biggest knock against most low-end PC laptops is that the don't have strong video playback. I recently watched a NVIDIA demo of W7 running on a Atom netbook with the upcoming ION graphics chip. From what I can tell, this combination is going to make the netbooks and low-end laptops night and day better than what's out there today.

Jay says:
"Dude, no one is saying Mac OS X is a slouch, especially when compared with Vista, but you've got to get off this aluminum case thing. Sure, it's a nice to have and makes the laptop more rugged, but I've never known anyone to break a laptop case. Certainly, it happens, but its occurrence has to be fairly low."
----------------------------------------------------
In fact in one of the previous posts I stated that I had an laptop with a broken case. Also, if you care to check out Ebay, and type in a search in the laptop section for "broken" you going find a lot of hits there. Billybob is right on the money that the ruggedness of a laptop can be very important, depending on what you intend to do with it.

billybob :

I am not worried about breaking the case, I am worried about the insides being slowly damaged as the plastic flexes under pressure of opening the lid and holding the laptop in one hand. Also a solid metal case is likely to resist dropping better than a plastic ones (I am a butterfingers). I want something that will last 10 years, not something that will break after 2.

I am sure that in the future with some special hardware we might be able to get Windows 7 up to a decent speed. I didn't see anything in 7 which impressed me, maybe it impresses Vista users, but I have higher standards.

As it stands today the Mac is far more appealing as a piece of hardware and software than most of the other laptops with Vista. 7 vs Snow Leopard will be another matter, but I cannot see it being much different. By that time I expect Microsoft will be saying 'Just wait for 8'.

Microsoft should stop advertising the MacBook like this.

Hi Joe Willcox,
Any chance of you getting rid of the porn post by "mediocre?" You have to notice by now, these people are trying to kill the discussion on your site, and ruin your work. Since they fail to control the conversation here. From that matter even Cancer does not add much to the value of the site.

Chips B Malroy :

Joe Wilcox replies:
"chips b malroy wrote: "Excuse me if I an wrong Joe, but is this the same LeBlanc that works for Microsoft?"

Hi, Chips,

I purposely used Brandon, to make the point that even people working for Microsoft don't understand what the ad agency is trying accomplish.

Joe
----------------------------------------------------
Ok Joe, just sometimes its in the wording. To say Microsoft blogger doesn't necessarily mean he works for MS. That idea need to be stated was my purpose of asking. If I sounded to shrill, I apologize, as my wording did come off stronger than I wanted it too.

But seriously, how can anyone take Brandon as a serious ethical or moral source?

http://apcmag.com/microsoft_sends_ferraris_to_bloggers.htm

Quote from the link: "One blogger, Brandon LeBlanc, mentioned on his blog that he'd 'traded up to' a new Acer Ferrari notebook from his old Dell XPS 1710, but neglected to mention it was a gift from Microsoft. Hours later, after being savaged by reader comments accusing him of being a sell-out to Microsoft, he added a note to the end of the story disclosing the gift. "I’m owning up to the problem, I’m owning up to the fact I messed up and I have continued to do so. I don’t care to “cover my back” regarding this matter," he said."

harris :

This is a funny doritos ad

123abc :

What's with this aluminum casing requirement for laptops? What good is it going to do if you drop it and the screen cracks or goes off forever or the hard drive crashes? Just because it's made from a single slab of aluminum doesn't make it invincible. it's a gimmick guys... it's only effect is to make you look special...

As for MS commercials. Good for them. Just because they have 90% marketshare and Mac only 8% or some skewed numbers like that, do you think the average tom, dick and harry is going to know or care? Anyway, the commercials aren't really that far fetched. The requirements are ones that my self-employed brother or my nephew would actually think about. Contrast this to stupid things like file-copy performance numbers... c'mon! I can wait an extra second or two (or even 30 seconds) for the copy to complete because I know I can do something else while the copy is in progress. that's what a dual-core CPU is for... Sorry, but most of us have better things to do than compare file copy performance numbers of yet to be released OS's.


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