Gateway Applies Consumer Lessons to Business World

Gateway has used a quirky cow character, its ponytailed CEO, sardonic humor and the lion’s share of its estimated $170 million adspend to build its brand among consumers. But the business-to-business market is just as important to the computer maker’s bottom line, generating nearly half of its $4 billion in annual revenue, according to the company.

Still, in sales to small businesses, government agencies, schools and healthcare companies, San Diego-based Gateway lags far behind Dell Computer Corp., which said it takes in more than 80 percent of revenue through b-to-b channels. Now, though, Gateway is adding muscle to its b-to-b efforts while trying to protect its consumer side as well.

Making progress in b-to-b is “very important for Gateway, as Dell has forced its way into the consumer market,” said Brooks Gray, a senior analyst at Technology Business Research in Hampton, N.H. “Dell now has two times the consumer revenues that Gateway generates.”

Last week, Gateway launched its first major b-to-b campaign in three years, via Publicis Groupe’s LB Works in Chicago [Adweek, Sept. 8]. “To be a player in the technology world, you have to be a player in the business technology world,” said Victor LaPorte, creative director at the Chicago agency.

Gateway’s approach in the new ads is to focus on customer service. Print ads in business and technology magazines shows computers and servers morphing into body parts, under the headline, “Humanology.” A TV spot on business cable channels features servers and other computer products moving around an empty office. “If all you needed was technology, you wouldn’t need us—the humans behind the technology,” says a voiceover.

The “Humanology” concept is intended to leverage Gateway’s reputation for being consumer-oriented and translate that for the business world, LaPorte said. “The marketplace believes in the human side of Gateway,” he said. “Our motto is, ‘Business people are people, too.’ I’m hoping we don’t develop a different idea to target IT people.”

The approach could resonate with the clients, said Gray, because “the business market is [about] relationship building, and customer service is a top priority.”

“There’s so much consolidation in the industry,” said Ted Ladd, a senior manager of public relations at Gateway’s business unit. “This is the right time to make some noise.”

Neither LaPorte nor Ladd would disclose spending for the effort, but the company’s last major b-to-b campaign, in 2000, was estimated at $50 million, sources said. The company spent an estimated $15 million in the b-to-b sector last year, out of nearly $170 million in total ad spending, according to TNS Media Intelligence/CMR.

Gateway’s sales have dropped more than 50 percent in two years. As computer sales have fallen worldwide, the company has also been making forays into the personal-electronics market.

Dell’s agency, Omnicom Group’s DDB Chicago, is putting the finishing touches on a b-to-b campaign scheduled to break this fall. That effort, said sources, will continue to feature Dell’s ongoing IT ad character, Dave, whose jargon is translated through subtitles.

The agency declined to comment on the upcoming campaign. Executives at the the Round Rock, Texas, company did not return calls.

Dell spent about $30 million on the b-to-b sector last year, out of a total advertising budget of $400 million, according to TNS Media Intelligence/CMR.