UPFRONT 1997: Personal Computers

Print ads give way to TV image spots that zero in on techies in search of solutions

The long-awaited high-tech marriage of the computer and the TV hasn’t been consummated yet, but that won’t stop PC makers from touting their brands and new-product offerings on the small screen.

The advertising strategies of major PC manufacturers such as Packard Bell, IBM and Gateway have undergone a major shift over the past 12 months, moving away from stats-laden print executions in favor of heavy spending on brand-based TV ads. And top PC marketing executives hint that the trend will continue. In fact, many plan to increase their TV budgets.

In the first quarter of 1997, the world’s top five computer companies sold 18.3 million PCs. Compaq’s 11.1 market share was tops for the quarter, followed by I.B.M., Dell, Packard-Bell and Toshiba. Last year, the five companies spent some $442 million on consumer media, led by IBM, which spent $262 million.

Competition has increased TV’s role and importance in PC makers’ advertising plans. The big challenge is developing brand loyalty with increasingly savvy consumers. The majority of consumers in the market for a PC are not first-time buyers. Most, in fact, are making their second or third computer purchase, according to David Roman, vice president of corporate marketing and branding for Apple Computer.

“Most of new computers sales are going to existing owners. This changes the way you market,” says Roman, adding that Apple plans to increase its TV ad spending in the coming year.

Says Sharon Driscoll, director of marketing communications at IBM’s Consumer Division: “Today’s consumers are smarter, more experienced buyers than they were in the past. They’re coming back with a better idea of what they want. This bodes well for branded products. It isn’t just a product. It’s more of a package. It’s what does IBM bring to the party [that other PC makers don’t].”

Big Blue is just one of many PC makers currently developing marketing plans for early 1998 that will include TV. Gateway is another computer maker to watch. The company, which ran TV ads last year to support its efforts as a direct marketer, plans to boost its TV ad spending in 1998, according to senior vice president of marketing Jim Taylor. Other big TV advertisers include Hewlett-Packard and leading retail PC seller Packard Bell, which is now in the middle of a major TV campaign. Toshiba America used an extensive TV campaign last year to help launch its Infinia line of desktop PCs. However, the company will spend more time exploring advertising opportunities on the Internet in the coming year. “We’ll probably do broadcast, but we’re still looking at whether it will be TV or Radio,” says vice president of marketing Rene Ward.

The introduction of newer, faster models and new technologies is also expected to draw buyers-and ad dollars. At press time, IBM was on the verge of breaking a new ad campaign for a new line of PCs. Buying decisions for new PCs will also be influenced by technologies such as MMX, Intel’s new multimedia chip, and DVD, or Digital Video Disk, which are slated to become widely available in the coming year. Apple, for example, plans to use DVD as a springboard to push its roots in multimedia with TV ads for Christmas.

But that’s not all. Consumers looking to upgrade to a new PC will have a broader range of options besides the traditional $3,000 purchase. They include sub $1,000 PCs for the more technical crowd and set-top boxes like WebTV for people who feel they don’t need a PC to access the Internet. All will demand marketing dollars and impact the marketing plans of companies like Compaq and IBM. Even Apple will bring out new consumer products based on the portable platform of its E-Mate 300. -John Spooner


* With Apple on shaky ground, PC makers have much to gain

* New technologies mean new features in PCs and new customers in stores

* Shift away from print ads should funnel ad dollars to TV

OVERALL: Flat spending

DARK HORSE: Gateway’s customer service and awareness means customers just might have a “friend in the business”

Copyright ASM Communications, Inc. (1997) ALL RIGHTS RESERVED