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Ballmer on Advertising: “We Have Reset and Won’t Rebound”

bye dollarMicrosoft CEO Steve Ballmer was honored as Media Person of the Year at this year’s Cannes Lions International Advertising Festival. As he addressed the festival, however, he pulled a bit of a Calacanis (you guys do remember when Calacanis called SEO “bull@#&%” in an SES keynote, right?). Ballmer told the assembled media and advertising gurus that, basically, we can kiss the good old days of rolling in dough goodbye.

Among other tales of doom and gloom, as reported by the Guardian:

  • “I don’t think we are in a recession, I think we have reset. A recession implies recovery [to pre-recession levels] and for planning purposes I don’t think we will. We have reset and won’t rebound and re-grow.”
  • “There won’t be [only traditional] newspapers, magazines and TV programmes. There won’t be [only] personal, social communications offline and separate. In 10 years it will all be online. Static content won’t cut it in the future.”
  • “Some say that the ad-funded model has not led to profitability. Google’s search site makes money but past Google is there a publisher with an ad-funded or fee-based model that has made lots of money? No.” [Sour grapes there, dude?]
  • The old approach of simply trying to replicate a print newspaper online is doomed to fail, Ballmer added.

Meanwhile, ClickZ focuses on some of Ballmer’s other remarks, including how much MSFT has increased its advertising spend recently:

Steve Ballmer said the company’s spending on annual measured media has climbed from $200 million to $700 million over a four-year period, as the company serves up new campaigns for Bing, Xbox, Windows, Internet Explorer, and other products.

But ClickZ agrees that Ballmer’s bearish on the future of advertising overall:

Rather, he sees a bigger future for marketing investments that cost less — and will therefore contribute fewer jobs and less money to the economy. “In an economy where the cost of production is close to zero, you get all kinds of changes to the monetizaton models.”

What do you think? Has the Internet permanently changed the way advertising will work, or will models—and prices—recover to resemble their offline predecessors?

  • http://www.brainymarketing.net Jamison Kelly

    Ballmer is right on these fronts. I work in an agency where a few years ago my Internet practice was considered juvenile compared to other media. Now those media planners are gone and Internet (PPC and SEO) are the bread and butter of the business.

    I run national PPC campaigns with myself and a few good assistants. If I need help, I can get freelance talent. For those who know Internet, technology, behavior and communication, there will be plenty of work. But for those who don’t? Tough situation.