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12.05.10

Microsoft's Mr. Fun

To challenge Google, Bing’s marketing chief, Eric Hadley, has a $100 million annual budget and gets to hang out with Jay-Z for work. Peter Lauria reports on Bill Gates’ opposite.

On a typically gorgeous late-October evening, about 300 tastemakers assembled at the trendy Delano Hotel in Miami’s South Beach. As Jay-Z, Beyoncé, Venus Williams, Miami Dolphins wide receiver Brandon Marshall, and other celebrities looked on, Microsoft executive Eric Hadley stepped up to a microphone to address the crowd. Not one for attention, the megawatt star power caused Hadley’s voice to crack nervously as he started to speak, according to a source in attendance that night. Pulling himself together, Hadley led the crowd over to the Delano’s world-famous skinny pool and directed the underwater lights to come up for the big reveal: There, printed on the pool’s floor, were the lyrics to Jay-Z’s “Big Pimpin,’” marking the official launch of a marketing campaign put together by Hadley and the rapper’s handlers to promote his autobiography, Decoded, through Microsoft’s Bing search engine.

Chances are you’ve never heard of Eric Hadley. But you’ve probably heard of Bing, which has achieved a remarkably high degree of awareness for a brand just two years old. And that is largely owed to Hadley’s work. Hadley’s official title is general manager in charge of worldwide marketing for Bing. A better way to think of him, however, is as Microsoft’s Mr. Hip. Hadley’s the guy making Bing, if not all of Microsoft, cool.

“He’s the one responsible for getting tastemakers to look at Bing differently,” says Steve Stoute, the branding expert of the hip-hop community who first introduced Jay-Z and Hadley roughly seven years ago. “Microsoft is a big ship to turn, but Hadley’s a guy who pays attention to what’s happening in subcultures and knows how to incorporate those ideas and values into the brand concept for Bing.”

Hadley, 39, cuts quite a different figure than the one the public has of a Microsoft executive. He lacks the nerdy glasses and bowl haircut of founder Bill Gates, the aggressiveness of CEO Steve Ballmer, the technological savvy of chief software officer Ray Ozzie, or the polish of any number of other executives inside the company. With his crew-cut close, receding blond hair and stoic face, he looks like a cross between Daniel Craig and Vladimir Putin. Hadley has the casual-chic fashion look down and is as comfortable at 1Oak as he is in the boardroom.

And while Hadley spends his fair share of time toiling over a keyboard analyzing spreadsheets and giving PowerPoint presentations in power suits, there’s no doubt that his is the most fun job within all of Microsoft. After all, going to events like the Victoria’s Secret fashion show, NBA All-Star weekend, and the Sundance Film Festival is a primary part of his job description.

“At the end of the day, EVERYTHING I do has to drive the business goals,” Hadley wrote in a followup email, emphasis his.

“The other guy is a technology play,” Hadley says, referring to Google not by name as all Microsofties do. “We want to be a consumer brand and make Bing relevant to people’s everyday lives, and the way to do that is to connect through pop culture.”

Armed with a reported $100 million marketing budget, Hadley has struck deals to sponsor the “Two Kings Dinner” hosted by Jay-Z and LeBron James during NBA’s All-Star weekend, have Bing integrated into NBC shows The Philanthropist (since canceled) and Parenthood, and staged the first live event on Web video site Hulu in conjunction with talent agency CAA. Called the Bing-a-thon, the 81-minute show still ranks as the most viewed live event in Hulu’s history, ahead of any concerts and even President Obama’s inauguration.

Hadley’s also inked partnerships with Victoria’s Secret, Ryan Seacrest, and boutique hotel chain and club SoHo House. Seeing a rare opportunity to brand a film a la You’ve Got Mail, Hadley even produced a documentary about world-renowned cardiologist Dr. Richard Bing, though he has no affiliation with the search engine. (No vanity project, the film was accepted into Sundance.)

Tucked neatly behind the more headline-grabbing deals, Hadley has struck several savvy localized partnerships that smartly showcase Bing to an audience that might otherwise default to Google. He made walking billboards out of Manhattan dogwalkers from Big Paws, Little Claws by dressing them in Bing T-shirts and created promotional programming for New York City taxis with local personalities.

“He brings Hollywood and New York back to Seattle,” says Demand Media’s Joanne Bradford, who worked with Hadley at Microsoft and hired him when she was with Yahoo, “and that’s helping make Bing more culturally relevant.”

Statistics bear that out. Bing registered 21.4 million new search users its first year out of the gate and has inched up steadily since then. Last month, users conducted 1.92 billion searches on Bing for 11.5 percent of the market, growth of 7 percent and 0.3 percent, more than any other search engine, respectively, according to comScore. Google still owns the marketplace, of course, with a 66.3 percent share and 11 billion searches.

Microsoft knows that it can’t seriously challenge Google’s dominance, so its strategy is to capture the influencers instead. If Bing could grow its market share to, say, 20 percent, it would be a major psychological if not financial milestone for a software giant that has continually been out-innovated by Google, Apple, and others in the last two decades. That means there are a lot of eyes—and a concurrent amount of pressure—on Hadley. So far, he’s killing it.

“The work he’s doing has delivered results, therefore he’s attracting attention at Microsoft,” says Jae Goodman, chief creative officer of CAA Marketing, a division of talent agency CAA, who first met Hadley through his wife while in college in the early ‘90s.

It’s easy to dismiss Hadley as a party boy burning through Microsoft’s money. To be sure, sources universally agree that he knows how to have a good time. But, to use the words of Ben Silverman that were echoed in sentiment if not vernacular by many of Hadley’s other associates that spoke to me for this piece: “That guy works his ass off. If he’s out until 2 a.m. it is because he is working, and he’ll still be the first one at the 8 a.m. meeting.” (Silverman is the CEO of Electus, which like The Daily Beast, is owned by IAC.)

If he’s in Seattle for the meeting, that is. Though Hadley grew up and lives in Seattle, he spends a week each in New York and Los Angeles per month, as he puts it, “meeting with people and going to events.”

Hadley is sheepish about the more glamorous aspects of his job, saying he “spends a small percent of time socializing, most of the time I’m at headquarters sifting through data.”

“At the end of the day, EVERYTHING I do has to drive the business goals,” Hadley wrote in a follow up email, emphasis his.

Hadley noted, for instance, that the Jay-Z deal was driven by research showing that the demographic groups who are his biggest fans—Gen Y (18-24 year olds) and African Americans—are more active online searchers than other groups. Going deeper, he trotted out data showing the 18-24-year-olds consume 61 percent more search pages online than average and African-American users view 29 percent more search pages. Moreover, affluent African Americans are more likely to use Bing over Google, one of the few demographic groups to do so, and those who listen to hip-hop weekly consume 19 percent more search pages monthly than others.

But Hadley hardly has to prove his marketing chops. Indeed, he doesn’t get nearly enough credit for them. Hadley came up on the agency side of business, most notably at Ogilvy & Mather, before jumping to Microsoft at the suggestion of CAA’s Goodman. He left Microsoft for a short-lived post at now-defunct online video site Heavy.com, worked under Bradford for a time at Yahoo, and then returned to Microsoft to run the Bing campaign.

“Eric was a pioneer in driving adoption of research methods to prove the effectiveness of online advertising,” says Bradford, who worked with Hadley on a landmark report on the topic for the Interactive Advertising Bureau.

Microsoft is the kind of company that doesn’t mind spending money as long it makes some, too. According to Silicon Alley Insider, Microsoft spends $667 million for every point Bing gains in market share. Though Microsoft executives insist that Bing will be profitable, SAI boss Henry Blodget estimates it would need for market share to climb to at least 30 percent for it to book profits large enough to be meaningful to the company’s overall business. (For a more complete analysis of Bing’s value proposition, see Blodget’s post.)

“Microsoft has a lot of trust in Eric, otherwise they wouldn’t have brought him back,” Bradford says. “But they didn’t just give him a ton of money and say ‘Go party.’ Everything has to be backed up with numbers. He’s in the boardroom pitching why getting Bing into fashion, entertainment, culture is good from a return-on-investment perspective.”

For Hadley, however, it’s a lot simpler. For all his new-media cool, at bottom Hadley is an old-school relationship executive. He builds trust over time, prefers to do business in person, and excels at seeing the unifying thread that networks people and industries together.

Or, as LeBron James’ manager, Maverick Carter, put it, “For me, it’s less about Microsoft and more about my relationship with Eric. He’s the guy out there beating the street.”

Peter Lauria is senior correspondent covering business, media, and entertainment for The Daily Beast. He previously covered music, movies, television, cable, radio, and corporate media as a business reporter for The New York Post. His work has also appeared in Avenue, Blender, and Media Magazine, and he's appeared on CNBC, Bloomberg, BBC Radio, and Reuters TV.