Microsoft Winds Down 'Scroogled' Campaign Against Google

Can nothing stop Google?

On Thanksgiving, Microsoft launched attack ads against the Internet giant that were so ferocious they made headlines in advertising and technology publications alike.

Microsoft spokespeople are still warning anyone who will listen that Google is reading its users' email and delivering biased results in Google Shopping. But it has stopped buying the controversial Scroogled ads on television, in newspapers, and social media.

"That part is about finished," Stefan Weitz, Microsoft senior director of online services, said on Thursday.

By one measure, the ads succeeded. Over 110,000 people signed Microsoft's petition on the Care2 petition site to "Tell Google to stop going through your email to sell ads." Microsoft originally set a goal of 25,000 names.

But if Microsoft hoped its campaign would win it a greater share of the market for Internet search or webmail, it looks like a pretty big flop. Data from market research suggests that users of Google search and Gmail shrugged off the onslaught.

"It's a little early to say, but it appears to be backfiring," said Jonathan Weber, an online advertising executive at LunaMetrics digital marking firm in Pittsburgh.

In the ads, still available online, Microsoft makes two claims about its competitor. First, it charges that Google scans Gmail messages, looking for keywords it can use to serve up relevant advertising.

Here's an example of the first claim:

Second, it says that the results of searches in Google Shopping are paid advertisements, as in this ad:

The complaints aren't new. Microsoft put out a longer, more humorous Gmail Man advertisement a year ago:

(Asked for comments, a Google spokesperson provided a written statement pointing out that live human beings at the company don't scan everyone's emails. "An automated algorithm--similar to that used for features like Priority Inbox or spam filtering--determines which ads are shown.")

On one level, the Scroogled campaign is just another example of a company trashing a rival. "Microsoft is in the position of the underdog and so the use of negative advertising is not surprising," said Weber.

What sets apart the Microsoft campaign is that--especially in the early weeks--it said almost nothing about its own products. In that way it differed sharply from Apple's famous "I'm a Mac" campaign that purported to offer a side-by-side comparison with Microsoft's Windows operating system.

In fact the Scroogled campaign was more reminiscent of political advertising. And some observers said it was telling that Bill and Hillary Clinton's former pollster, Mark Penn, took a job at Microsoft before the campaign began.

Weitz said Penn had little to do with the effort. But he acknowledged that the campaign started with an opinion poll conducted by the Roper Center for Public Opinion Research. "We found that seven out of 10 Americans don't know that this practice of scanning emails was happening, and when they found out they didn't like it," said Weitz.

Microsoft saw an opportunity to challenge what had become an almost unconscious habit. If you want to find something on the Internet, you Google it. "People do it with muscle memory," said Weitz. "They don't even give it a thought."

By raising the privacy and bias concerns, Microsoft wanted to introduce at least a moment of hesitation. "They will hit that cognitive speed bump," he said.

But that strategy doesn't seem to have clicked with users.

The latest market share scores from comScore show Google with a 67 percent share of Internet searches for January 2013, up 0.3% from its 66.7 percent share in December 2012. The gain erased its 0.3% loss from the month before.

Microsoft sites registered a 0.3% gain from November to January to reach a 16.5% share, but that increase appeared to come at the expense of also-rans like Ask and the struggling Yahoo!.

Email market share is harder to measure because people read their email on a variety of different software on different devices and sometimes read the same message multiple times. Also Microsoft launched Outlook.com, an upgrade and rebranding of its hotmail.com web-based email program during the Scroogle campaign, further muddying the metrics.

But even Weitz isn't claiming that Microsoft has unseated Gmail's position at or near the top of the heap among email services Americans like to use. "It's a habit," said Weitz. "It's like smoking. It's hard to get folks to stop doing it."

Not only that, the ads just didn't resonate, said Weber of LunaMetrics. "This sort of talk about privacy rings false and obscures the real issues," he said.

Users do care about privacy. But they are apparently sophisticated enough to know there isn't a human Gmail Man snooping on them, and they are willing to let a machine scan their emails and show them ads in exchange for a free service. "By and large, people said, 'Eh, I don't care about this,'" said Weber.

And from a privacy standpoint, the distinction Microsoft made was trivial, said Seth Schoen, a senior staff technologist for the San Francisco-based Electronic Frontier Foundation. "What Microsoft was emphasizing is that they are not using users' data in the same way, in particular to target advertising," he said. "As far as I know that's true. But it doesn't mean that they couldn't do that."

Both companies collect data on what terms users plug into their search engines and use that information to target ads, he said. The practice of looking at emails to target ads is only slightly removed from that.

If they really wanted to get serious about privacy, Schoen said, Google and Microsoft would offer encrypted email programs that would be much harder for anyone to scan and analyze, including hackers, and they would create these technologies in ways that the security could be audited by third parties.

So far neither company seems interested in such a venture. "Against that backdrop there's not much difference between the two," said Schoen.

Microsoft's complaint about Google Shopping results has a little more validity, Weber and Schoen agreed.

Users don't expect search results to be influenced by what advertisers pay, especially since the earlier version of Google Shopping, Froogle, didn't organize results that way, said Schoen.

But Google isn't hiding the practice--its acknowledged on the Google Shopping page. And Weber says the Scroogle ads felt heavy-handed. "There is a legitimate difference to be exploited there. But Microsoft should adjust the tone, talk about why their product is great."

Which brings us to the best advice Weber has to offer Microsoft. "What they really have to focus on is having a better product."