All media is going digital, says Ballmer

25 June 2009

CANNES: Consumers will access all media through digital platforms within the next ten years, meaning online and offline content providers will need to quickly adapt to this rapidly-changing environment, according to Steve Ballmer, chief executive of Microsoft, the IT giant.

At the Cannes Lions International Advertising Festival, Ballmer argued that media consumption is increasingly taking place across "three screens" – PCs, mobiles and TV – meaning it is becoming increasingly essential to produce material that is relevant across each of these channels.

Ultimately, all "traditional" content such as "newspapers, magazines and TV programmes" will all "be online", as "static content won't cut it in the future," Microsoft's ceo predicted.

Ballmer, who received the title of media person of the year at the event, ultimately forecasts that "all content consumed will be digital. We can debate if that may be in one, two, five or ten years."

Similarly, there will no longer be "personal, social communications, offline and separate," but all such activity will be integrated with digital tools.

Brands therefore need to invest in building their equity both on the web and off it, be it by investing in websites, creating buzz, or gaining an understanding of the various sales platforms that are developing across the new media sector.

However, despite his confidence in the growth of digital, Ballmer had reservations about the viability and profitability of an advertiser-funded model for the medium.

These problems span both "content and the website environment", as models attempting to mirror offline media, such as newspapers, are unlikely to succeed.

Similarly, advertising expenditure has not proved profitable for the majority of website owners, with one notable exception.

While Ballmer said Microsoft makes $2 billion (€1.4bn; £1.2bn) a year from advertising, he asserted that "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".

With regard to Microsoft's own search system, recently rebranded as Bing, Ballmer said "we have got to be realistic. You have to begin with a decent product that will require significant initial energy."
"We are talking about tactical differentiation right now, about reinventing the interface and in all push on all dimensions," he added.

In terms of the overall economy, Microsoft's ceo said "I don't think we're in a recession. I don't assume there is a recovery."

"I think we reset to a lower level and the world economy will grow again from this reset level," he concluded.

Data sourced from Media Guardian/exchange4media; additional content by WARC staff