Microsoft to attack Mac pricing in new series of TV ads

According to a report by the Associated Press, Microsoft hired Crispin Porter + Bogusky, the ad agency behind the campaign pairing Bill Gates with Jerry Seinfeld, to recruit "unwitting subjects by posing as a market research firm studying laptop purchasing decisions."

Participants found on Craigslist were given between $700 to $2,000 to buy a computer fitting certain criteria, and were told they could keep the computer they selected.

One participant named Lauren was told to buy a 17" notebook for less than $1000. She was then filmed entering an Apple Store where she couldn't find one. Lauren then heads to Best Buy and selects a $699 HP machine running Windows. That experience was turned into a 60 second TV spot for Microsoft after the agency told the buyer that the purpose of the excursion was really to promote Windows.

Shopping for hardware

The new ads don't go into details on hardware purchases; they simply make the case that PC laptops can be found for cheaper, playing up tight funds in the tough economy. Best Buy actually does sell the DV7-1245DX, an HP notebook with 17" screen, but it lacks fast wireless 802.11n, fast Gigabit Ethernet, digital audio inputs and outputs, weighs 7.75 pounds, and only features the screen resolution of Apple's 15" notebooks: 1440 by 900. Technically, it is a 17" notebook in terms of size, but it doesn't have the 17" resolution of Apple's MacBook Pro, which is 1920 by 1200.

One HP buyer pointed out that this model series "has the worst screen I have ever seen in my life. It's the 1440x900 screen and the viewing angles are so poor that even when sitting directly eye level with the screen it is totally washed out. If I go a little bit off-axis the screen results in a negative image. I was using the default settings. Unfortunately I didn't read reviews before i purchased."

Shopping for software

More importantly however, the HP notebook runs Windows Vista, rated by ChangeWave as having the lowest operating system satisfaction rating in rankings that were led by Mac OS X Leopard and also included Linux and Windows XP. Many PC makers continue to add a "Windows XP downgrade" as a feature on their new PCs.

This makes it particularly interesting that Microsoft would advertise its product by citing the price of the hardware it runs on, rather than calling attention to any of the features in its own product. It's not that Microsoft hasn't tried. Vista's first "Wow" campaign portrayed customers in a state of pleasant shock when using it.

Shopping for an ad campaign

After those ads collapsed in an avalanche of bad press complaining about arbitrary changes that did not improve anything and software and hardware compatibility problems, Microsoft rolled out the Mojave Experiment, which showed users a "new OS" that was really just a repackaged version of Vista. Those ads attempted to claim that Vista's bad reputation was all due to customers not giving the system a fair shake, but the ads sidestepped the real problems users were experiencing by not allowing participants to run Vista on their own PC or with their existing software and peripherals.

Microsoft then announced a $300 million campaign to revive the Windows brand by associating it with skits featuring Gates and Seinfeld which promised to "tell the story of Windows." Instead, the ads were canceled mid-production after being poorly received.

Following that, the company released a "Windows vs Walls" campaign reminiscent of Apple's Think Different commercials, and then a series of "I'm a PC" ads that tried to defuse Apple's Get a Mac spots by claiming that generic PCs were empowered to do anything, except of course, producing the ads themselves, as it was embarrassingly revealed that those ads were actually created using Macs.

Promoting cheap

Talking about price during a recession where the global PC market is actually shrinking for the first time ever is probably Microsoft's best bet in trying to stem the tide of switchers buying Macs. However, the company has to be careful because it's also competing against free software such as Ubuntu Linux, which also runs on generic PCs. In fact, those PCs get cheaper if they're sold without Microsoft's Windows, something the company has worked hard to prevent from happening.

When cheap netbooks surfaced last year and began to sell in increasing numbers, PC makers were able to hit their low price targets by bundling them with Linux. However, Microsoft stepped in and dumped low cost Windows XP licenses on the PC makers to get them to stop selling Ubuntu's software as a competing product, according to Ubuntu CEO Mark Shuttleworth.

Shuttleworth "believes that a decent edition of Windows [7] will mean Microsoft finally has to charge full price and that Redmond will finally stop allowing OEMs to use low-cost copies of Windows XP instead of paying full price for the full version of the official flagship - Windows Vista," according to an interview published by the Register.

"We are in an awkward situation now because they [Microsoft] are giving away XP in the netbook market - they are literally giving it way to OEMs," Shuttleworth said. "You can make the argument Linux is more expensive that Windows XP because Microsoft has been very aggressive in licensing."

As Microsoft starts charging more for its software, it will have to compete against Linux on the low end and Apple on the premium end. Further, as Apple builds WWLAN mobile broadband support into its forthcoming machines, Microsoft will also have to push Windows PCs against Apple hardware that is similarly priced due to begin subsidized by mobile carrier contracts, just as the iPhone broke down competitive barriers and leveled the playing field in smartphones, catching up to Microsoft's Windows Mobile shipments in just a matter of months.