Helping Microsoft's next marketing boss

At Microsoft, the problem isn't marketing. Just last week, BrandFinance ranked Microsoft as the second most valuable brand in the world. But it continues to lose ground in consumer markets to hipper brands with cooler products.

That's really the challenge that faces the next leader of Microsoft marketing operations. Late Tuesday, the current boss, Senior Vice President Mich Mathews, told Microsoft Chief Executive Steve Ballmer and Chief Operating Officer Kevin Turner that she was planning to leave this summer, in news broken by AdAge. Microsoft remains one of the best known global brands. Its Windows is the most widely used computer operating system on the planet. It remains hugely profitable.

But in much of the consumer world, Microsoft remains an afterthought to rivals such as Google and Apple. Many of Microsoft's marquee consumer products--Windows Phone, Zune, Bing--have failed to make a dent in the competition. The fact is that it's hard to sell a product when rivals have something more innovative and more compelling already for sale.

Without question, Microsoft has offered up some dubious consumer marketing efforts over the years. The company famously hired edgy ad firm Crispin Porter and Bogusky, known in marketing circles for resurrecting the old Burger King character, to create ads to sell the much-maligned Windows Vista. The most notorious of the resulting ads was a series that featured Microsoft Chairman Bill Gates palling around with comedian Jerry Seinfeld, which left many consumers scratching their heads. A few years earlier, Microsoft rolled out ads with dinosaurs dressed as office workers, encouraging users to upgrade to Office 2003. More recently, Microsoft unveiled ads for Windows Phone 7 that seemed to mock users for being too connected to their phones, suggesting that Microsoft's technology lets users do what they need to quickly and get on with their lives.

But if Microsoft has a marketing problem, it's not really because of a handful of curious ads. The real challenge to the company is its products themselves. Apple has pulled away from Microsoft in consumer perception because, as most reviewers and consumers will tell you, the iPhone is a better device than any mobile phone that runs Microsoft software. The iPad created a new product category that Microsoft could have seized years earlier with its Tablet PC software, had it not botched the execution. Apple's ads are clever. But the company's products give its marketers plenty to work with.

Microsoft's next marketing chief will have some consumer-pleasing products to work with, and the Xbox 360 and its innovative Kinect motion-sensing game controller are at the top of the list. Earlier this month, Microsoft disclosed that it's sold 10 million units of the Kinect.

So who will replace Mathews and control the marketing group's $1 billion budget? AllThingsD's Kara Swisher speculates that Yusuf Medhi, senior vice president of Microsoft's online audience business, and Chris Capossela, who until recently was a senior vice president of Microsoft's business division, are likely candidates. Whoever gets the job will have some work to do.