Can Macklemore Help Microsoft Fend Off Gmail?

Microsoft's reputation as a go-to email service provider has waned in recent years, thanks to the rise of competitors like Gmail and the declining popularity of Hotmail, which has become synonymous with out-of-touch users. Can an aggressive ad campaign change Microsoft's fortunes?

Microsoft's reputation as a go-to email service provider has waned in recent years, thanks to the meteoric rise of competitors like Gmail and the declining popularity of Hotmail, which has become synonymous with out-of-touch users. Can an aggressive ad campaign change Microsoft's fortunes?

That's the belief of Dharmesh Mehta, senior director of product management at Microsoft, who is optimistic about a large-scale advertising program the company launched today to show off its recently redesigned Outlook service. As an alternative to Hotmail, the service's new elegant user interface and smart features have gained widespread attention--and already attracted 60 million active users, "a third of whom came from Gmail," Mehta says. "Now, we're going to launch a massive campaign effort--the largest in our history for pushing email, and maybe even the largest in the industry."

Of course, the target here isn't only to go after its competitors' users, but also to revive Microsoft's brand in the arena of email. Despite having hundreds of millions of users of Outlook and Hotmail, Microsoft is still looked upon as having lost its edge in the space--long before it actually lost its market share lead. "When Gmail arrived in 2004, it was the cool new thing, and it quickly became people's perception that it was the leading email service provider," Mehta says. "But in terms of active users, Gmail didn't take the lead until two to three months ago."

Perception aside, the fact that Gmail's market share has rocketed so fast is clearly a cause for concern inside Microsoft. But Redmond is finally starting to fight back. "It took Gmail more than two years to get to 60 million users--we got there in two months," Mehta boasts.

He hopes Outlook's refreshing design and the company's advertising campaign will spur more growth. For its first ad, Microsoft adopted music from its Seattle neighbors Macklemore & Ryan Lewis, the hip-hop duo behind the smash-hit "Thrift Shop." Mehta says music has become important to how Microsoft markets its product, and no doubt the song used in the commercial, Macklemore's "Can't Hold Us," is a catchy tune. "This is a bet on music for us," he says. "Ironically, we picked the music before 'Thrift Shop' hit No. 1 on Billboard."

The problem? Microsoft's tried this strategy before, without much success. The public has been hit with a barrage of ads from Microsoft in recent years--with commercials for Windows 8, Windows Phone, Bing, Explorer, and its Surface tablet. Anyone who has watched TV in recent months can likely recite Alex Clare's "Too Close" by heart due to the overuse of the company's Explorer commercial. Similarly, the amount of ads for the Surface that show people jumping--why, oh why are people always jumping while using the Surface?--must number in the double digits.

Yet Windows 8 sales haven't accelerated at a fast enough clip to impress investors; Windows Phone market share remains low; Explorer has failed to stop Google's Chrome browser from gaining popularity; and its Bing advertisements (or anti-Google ads) have failed to move the needle in terms of search market share. The company has even been criticized for its marketing tactics--including hiring longtime political strategist Mark Penn to market the company's products more like he would a reelection campaign. (The exception here, I'd argue, is Microsoft's recent 1990s ad for Explorer, which was damn clever.)

Still, that's not stopping Microsoft from making a significant push for Outlook. "You're going to see ads on TV in prime time and cable; on billboards; on trains; on bus stations--it's a very 360-degree push," Mehta says. "If you do not see our ads, I have screwed up something really bad."

Read more about Microsoft and the 10 Most Innovative Companies in consumer electronics for 2013.

[Macklemore Image: Flickr user Alaina Buzas]

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3 Comments

  • Dan Eriksson

    The reason Outlook had more users and continued to gain users faster than Gmail was because everyone and their mother was opening one, two, or three extra Hotmail accounts to send all their spam and junk. Come on, who doesn't have a few Hotmail or Yahoo mail accounts to keep their Gmail inbox neat and clean? (Hell...I'll be using one to post this comment.)

  • Felix Desroches

    Oh c'mon guys - name drop Macklemore in the headline and of course I'll bite. But this is no Lady Gaga-Polaroid story, it's just a behemoth using hip music to sell products. Tsk tsk. 

  • Rick Presley

    I'm no fan of G-mail's interface and prefer the layout of Outlook, but for the price who am I to complain? For a bunch of smart people, the folks at MS don't seem to understand customers very well.