Can silicon chips be sold like corn chips?


March 16, 1992|By Tom Schmitz and TC | Tom Schmitz and TC,Knight-Ridder News Service

SAN JOSE, Calif. -- When Intel Corp. announced plans to launch a $250 million advertising campaign to peddle its integrated circuits on national television last fall, some thought the premier maker of electronic computer brains had lost its corporate mind.

These were silicon chips, the critics protested, not corn snacks. The public would never understand. And besides, semiconductor companies were supposed to compete over who had the best technology, not the best TV spot.

It hasn't evolved into a Coke and Pepsi war -- yet. But marketing experts say Silicon Valley companies have a lot more in common with soft-drink manufacturers than they used to. And to get their message across, they are increasingly turning to consumer-oriented advertising, including television.

And while it can be startling to see microprocessor ads sandwiched between sneaker commercials and deodorant pitches, some say high-tech companies are well served by speaking directly to the masses. Indeed, they may have little choice.

"There are about as many personal computers out there as microwave ovens," said Iain Woolward, whose San Francisco advertising agency represents several technology firms. "In sheer numbers, you've got 22 million people in the United States buying stuff for PCs. So it's perfectly appropriate that computer advertising be in the mass market."

Using glossy national magazines and television to promote computers is nothing new. IBM and Apple have been doing it for years, and Wang Laboratories took the plunge for a while with commercials targeted directly at information systems managers -- while leaving other viewers scratching their heads.

But the trend appears to be accelerating. When Sun Microsystems wanted to change its image last year, it launched an advertising blitz whose centerpiece was a dramatic television spot. Intel's ads are the first to draw attention to a computer component, rather than an entire machine.

This month, Microsoft Corp. began using television to push its popular Windows business software. And last month, Apple Computer signed former basketball star Kareem Abdul-Jabbar to promote its Powerbook model during the Olympics.

Analysts say the rush to mass media is rooted in the increasingly fierce competition between computer companies, many of which are looking to break out of their saturated traditional markets.

With so many comparable computer systems for buyers to choose from, Silicon Valley manufacturers are now faced with the same problem as oil companies and soap makers -- they must find a way to make their product stand out in what is increasingly becoming a commodity business.

Even in high-tech, "nothing sells itself easily any more," said Jack Trout of the marketing strategy firm Trout & Ries. "In a highly competitive world, you need an idea to drive your product."

Based on an analysis by Mr. Trout's firm, Salomon Bros. recently issued a report advising investors to evaluate computer companies on the strength of their marketing tactics, as well as their technology. And these days, good tactics often include aggressive advertising.

In that kind of fight, television is the ultimate weapon. "All marketing happens in the mind. And the first guy that has the money [for a television campaign] can really dominate the mind. It puts their lesser competitors at an enormous disadvantage."

Until a few years ago, only a handful of computer companies had that kind of money, and those that did were skittish about using it for television, where the results are generally hard to quantify.

"They're used to cranking out a cheaper widget," says Mr. Woolward, who has developed a number of unconventional magazine ads for Logitech Inc. of Fremont, Calif., to draw attention to its ergonomic computer mice.

"You can show an ad to a lot of people and individually, they'll say its great. But if you say let's put a half a million dollars behind it, they'll say, 'Oh no.' The transition is hard to make." But for industry giants such as Microsoft, Intel, Sun Microsystems and Hewlett-Packard, buying television time is a way of proclaiming their dominance.

"TV is prestigious," says Lynn Keenan, advertising manager for Hewlett-Packard Co.'s computer peripherals division, which airs spots for its Laserjet printers during football games. "It's something that a leader usually chooses to do and can do. I think when people see something on TV, they get the impression that this company is committed."

That's exactly what Sun was aiming at with its spot, which put the viewer at the head of a fast-moving arrow, the company's unofficial symbol.

Hoping to broaden its market beyond the technical community, Sun sent notices to thousands of information managers at Fortune 500 companies notifying them when the ad would run and asking them to watch it.

Sun followed up with an eight-page print spread in the next day's Wall Street Journal.

In the case of software and peripheral devices like computer mice, much of the advertising is targeted at the retailer, as well as the consumer. "They are saying, 'We are going to support these products with advertising so please put it on the shelf,' " Mr. Woolward says.

The biggest problem with putting high-tech on television is the need to condense messages about sophisticated products into words and images lasting only a few seconds. The challenge was particularly acute for Intel, whose products are hidden away in the circuitry of a computer, out of sight and generally out of mind.

So rather than appealing to consumers' heads, Intel aimed for the gut. Produced by George Lucas' Industrial Light and Magic, the ad takes the viewer inside a computer, flying through the circuit boards like Luke Skywalker bombing the Death Star.

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