MSN Ads Anger NYC

  |  October 25, 2002   |  Comments

Following in the footsteps of IBM's gaffe last year, Microsoft is ordered to end its guerilla marketing campaign for MSN 8.

In what seems to be another case of overzealous corporate marketing, New York City officials are angry with Microsoft for placing advertising decals on city streets.

On Wednesday and Thursday, Redmond, Wash.-based Microsoft plastered the city with the decals, which were aimed at building buzz around the launch of its MSN 8 Internet service. MSN 8 debuted officially on Thursday with a party and a rock concert in New York's Central Park.

The decals featured the MSN brand logo -- a multicolored butterfly -- and the service's new tagline, "It's Better with the Butterfly." The ads appeared on city streets, sidewalks, signs and the sides of buildings.

However, the practice -- like all forms of writing on or defacement of city walkways -- is forbidden under New York City ordinances.

"I think there are a lot of corporations that don't know that placing these ads on the sidewalks or on our pedestrian indicators -- our walk/don't walk signs -- is indeed illegal," said Tom Cocola, a spokesman for New York City's Department of Transportation.

While such stunts have long been mainstays of city political and record-label advertising, corporate "guerilla" marketing practices have also become increasingly common in recent years, as companies and ad agencies have sought new and innovative ways to boost awareness of new products. In fact, guerilla marketing is seen as so useful that a number of specialty agencies have sprung up around the practice.

But several cities take a dim view of some guerilla marketing efforts. Cocola said the city sent Microsoft a "cease and desist" letter and fined the software giant $50 for the campaign. If Microsoft doesn't stop, then the city will take further action, he said. That could include asking for an injunction and criminal prosecution.

"Generally in the past, other corporations have immediately stopped," he added. "They, understandably, don't understand this is indeed a violation. I guess there are other cities where you can do this and get a permit. Not in New York."

It's unclear how many butterflies were posted throughout the city by Microsoft. Cocola estimated that the Department of Transportation collected "a few hundred" decals, but added that the city has gotten reports of some still scattered throughout Manhattan.

It's also unclear which of Microsoft's agencies is taking credit for the stunt. McCann-Erickson Worldwide handled the bulk of the company's $300 million marketing budget for the MSN 8 launch, but such street-side activities are typically farmed out to smaller, local agencies that manage street teams.

For its part, Microsoft would say only that it regretted the effort, and apologized to the city and its citizens.

"We made a mistake with the decals, and we take full responsibility for what happened," said Yusuf Mehdi, Microsoft's vice president for MSN worldwide. "We are working with city officials to clean up the decals immediately."

The brouhaha makes Microsoft the latest major corporation to run afoul of New York City over the rule. Earlier this week, Nike concluded a similar effort and agreed to cease pasting its decals around the borough. Cadbury Schweppes's Snapple did the same earlier this year.

IBM made perhaps the most extensive (and expensive) such gaffe in the tech world when it began pitching its adoption of Linux in its "Peace, Love, and Linux" campaign last year. For the guerilla marketing aspect of the effort, Big Blue hired marketing firms to chalk or spray paint graphics on the sidewalks of several major cities.

The company and Ogilvy & Mather, its ad agency, said they had understood the graphics would be temporary; when they persisted long after the campaign, IBM wound up paying thousands in fines and shelling out to have the ads removed. Some of IBM's artists were arrested in San Francisco and Chicago.

"We don't want to come off like we're going off on these companies, but by the same token, we don't want a proliferation of this stuff," Cocola said. "If we turn the other way for Microsoft and its butterflies, then we have to do the same for the next big corporation that's doing a guerilla ad campaign. We've had this situation before, will probably have it again."

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