Microsoft has been raking in sky-high profits on the back of massive revenue for several years. As the company tumbles from one bumper financial period to the next, you may not think Microsoft needs to reign n expenses. However, that is exactly what the company is doing by cutting all TV advertising.
It seems the slowdown in the economy is pushed Microsoft to pause TV advertising. Three sources speaking to Business Insider say the company has ceased all TV ads for the main Microsoft brand. Moreover, there is so far no indication of when the ads will resume.
This move was signposted by Variety in an earlier report. According to the publication, Microsoft did not participate in the TV upfronts. This means the company opted out of buying network inventory which would have given it a better rate. In other words, Microsoft was clearly planning to cut its TV advertising this season.
Variety also points out that the company spent an estimated $294.8 million on TV ads last year, according to data from Kantar.
Ongoing Marketing
According to the sources, brands such as Xbox and Surface will still have marketing. These will be covered by long-time ad partner IPG's McCann in New York. Even so, Microsoft's cutback has had an effect on the firm. Sources say IPG's McCann had to move employees from Microsoft to other accounts to avoid laying them off.
However, Microsoft says it will continue to work with McCann:
“Microsoft remains committed to its partnership with McCann, and appreciative of the great work they have done. As we do each year, we are evaluating how to allocate media dollars, but this does not affect our relationship,” a Microsoft spokesperson says.
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