Microsoft Advertising readies move into Romanian market

Aberson, who held a speech at advertising festival Golden Drum led all media operations of Microsoft in Nordic countries, Belgium and Central Europe, Middle East and Africa, namely 46 markets. The company operates in Romania through Think Digital, Microsoft Advertising’s partner also for markets in Greece and Cyprus.

“Microsoft Advertising’s entry in Romania is a long-term move. It will not be carried out in the following six months”, Ernest Aberson pointed out, “long-term” meaning one-two years interval. “We always have a different outlook on a country. We try to determine the market’s potential, public and return of investments’ percentage in two-three years’ time. Should we invest now, or it is better to wait a little more? We conduct a market analysis every six months. As for Romania, there is still room for growth.”

With 20 million inhabitants, Romania is not yet an investment opportunity, compared to smaller markets, such as Hungary or Ireland where penetration rate of Internet exceeds 25% rate registered in Romania.

Microsoft Advertising’s entry on the domestic market is conditioned by internal premise of the company: every new employee must bring annual revenue to the company of 500,000 dollars. Three employees in Romania should produce 1.5 million dollars, Aberson stated, a turnover sevenfold bigger than 250,000 dollars business registered by Think Digital in Romania.

“At this point, Microsoft is a company that curbs number of employees and relies more on its partners. We intend on keeping the company as small as possible and as large as it is necessary. Microsoft works differently than many other companies. IBM, for example has over 300,000 employees while Microsoft has only 90,000 worldwide,” Ernest Aberson added.

At this point, Microsoft Advertising has 2,000 employees in Europe, 800 of them only in Central Europe countries. Number of employees will rise to 3-4,000 in the following two years, together with growth of sales volume.

According to last year’s earning report posted by Microsoft Advertising for Europe, the company registered 600 million dollars from display ads sales. This year, Aberson forecasts an 8-900 million dollars growth. “If we include the search advertising component, the sales volume will exceed one billion dollars”.

Microsoft Advertising integrates advertising offers of Microsoft, promoting digital media platforms where clients post online advertising campaigns, such as MSN, Windows Live, Xbox, and Office Online. At the moment the company is active on the markets in Romania, Greece, Cyprus, Croatia, Slovakia, Czech and Slovenia through middle-companies and has recently re-launched in Russia, Turkey, Ireland and Poland.

Financial crisis is not affecting Microsoft’s strategy in Europe at any extent

“The crisis will not make us change the plans. We actually plan on increasing workforce by 200 as we believe strongly in our story and in Internet as an investment climate. We invest over 500 million dollars in a database center in Ireland, over one billion dollars in a data center in United States and we will double the workforce in Europe within the next two years,” said Aberson.

However, financial crisis will alter the growth pace of online advertising market in 2009. If financial crisis continues, the market will grow 10% that may climb to 50% if it stops here.

As for fourth quarter 2008’s revenues of Microsoft Advertising, Aberson says they will not be affected at any extent by global financial problems. “November and December are the most important months, as we register record highs in sales volume. In the last nine years, these were the record-months, and we estimate similar outcomes in 2008,” Aberson added.

Translated and adapted by Camelia Oancea.