IBM Targets Ad Firms to Pitch New Technology : Marketing: The push is part of a larger campaign to go after small businesses and lessen Apple Computer’s dominance in desktop publishing.
It’s not exactly a computer manufacturer’s dream market: a bunch of artistically inclined users who cringe at the thought of having to learn computer operating instructions.
Yet mighty International Business Machines has launched an all-out campaign to woo a group of creative types decidedly more finicky than back-office bean counters.
Armed with new software technology that it is heavily promoting, the Armonk, N.Y., company is zeroing in on advertising agency creative departments--a market now dominated by Apple Computer. While these art directors, designers and copywriters constitute a small part of the desktop publishing population, they nonetheless present a formidable proving ground: an eclectic group hungry for new visual tools, whose passions tend to set design and style trends watched closely by other industries.
IBM’s new push pits its enormous resources against those of its smaller but feisty competitor, Cupertino, Calif.-based Apple, with its widely popular Macintosh that is by far the machine of choice in ad agency creative departments.
For instance, at Zam & Kirshner & Geller Inc., a small Garden City, N.Y., agency that owns two Apple Macintoshes, creative employees use the computers to dream up copy, design typography for headlines, develop rough layouts and send copy through phone transmissions to advertisers for approval.
“If you’re talking about computers in the creative arena, there isn’t much of a contest. It’s all Apple, just about,” said Tom Phelan, staff executive at the American Assn. of Advertising Agencies, an industry group representing roughly 770 agencies.
IBM’s ad agency drive is part of a larger marketing campaign due to break early next year that also targets small businesses, such as commercial printers and civic associations, that may not already own desktop publishing computers.
“We anticipate this to become a big part of company revenues,” said Kim Johnson, IBM’s manager for new business for media. “It’s the fastest-growing area for computer resources today.”
In making its personal computers appealing to advertising creative departments, IBM has increasingly been relying on Microsoft’s OS/2 operating system, which allows its PCs to perform a wide variety of graphic functions. OS/2 is the basic software driving IBM’s most powerful personal computers and IBM compatibles.
IBM hopes to use OS/2 on most of its personal computers, replacing the MS-DOS software that some users regard as more difficult to learn. Yet to date, sales of OS/2 have been languishing--only 180,000 copies have been sold since it became available 2 1/2 years ago, according to Dataquest Inc., a market research company in San Jose.
In a bid to bolster OS/2 sales, IBM and Microsoft last week announced several measures to make the software available on a wider range of computers.
Unlike the MS-DOS software, the Mac-like OS/2 operating system makes it possible for users to choose from different edit and design options simply by moving the cursor onto any one of several easily recognizable images: For example, choosing an image of a garbage pail allows the user to delete a file.
Some critics say that text display, manipulation and printing on the OS/2 operating system is inferior to that of the Macintosh.
Apple’s popularity, however, isn’t deterring IBM. Next year it will conduct a direct-mail and telemarketing campaign aimed at businesses with 50 or fewer employees--including small agencies, design firms, churches and civic associations. A planned ad campaign could begin as early as next month in publications such as Adweek, Advertising Age and Marketing & Media Decisions magazine. Big Blue will also try to attract new customers by holding seminars on new technology.
The $60-billion company continues to spend more in advertising than the much-smaller Apple, which had roughly $4 billion in revenue in 1989. LNA-Arbitron, an industry research group, reports that IBM spent $36 million last year advertising its PS/2 computer, the personal computer on which the OS/2 operates, topping Apple’s spending for the Macintosh by about $5 million. In the first half of 1989, IBM spent $8.9 million for its PS/2, compared to roughly half that amount spent for the Mac.
Moreover, IBM has forged what it terms “business partnerships” with software companies in an attempt to get them to unify their offerings and custom-tailor software to the needs of specific industries.
IBM’s approach contrasts with Apple’s focus of spectacular ad campaigns on widely watched television programing such as the Super Bowl, which attract general audiences instead of specific industry markets.
There are several reasons for this. Big Blue has been trying to shed its image as the Big Brother of technology, exploited by Apple’s “1984” television commercial introducing the Macintosh. Super Bowl audiences five years ago watched a lithe runner hurl a hammer through the image of a dictator on a giant TV screen--apparently symbolizing Apple’s liberation of the masses from the Orwellian enslavement of hard-to-learn technology.
There are some who do not think IBM’s image has changed much since.
“Buying desktop publishing from IBM is sort of like buying skis from an Egyptian company,” said Steve Hayden, executive creative director at BBDO-Los Angeles, who coordinates computer purchasing for the agency’s New York office as well. Both are heavily dependent on Macs. “IBM may have the concept, but they don’t have the execution.”
In addition, analysts say, IBM has had a hard time getting software developers to create applications that work well together. The differences can be confusing to users.
“IBM’s problem is that it has so many products that have such a hard time working with each other it is forced to spend most of its time working with customers’ problems,” said Francis McInerney, an analyst at Northern Business Information-Datapro, a New York-based industry research firm. “IBM has to live with a flawed technology base.”
Besides delays in launching the much ballyhooed OS/2 operating system and the software to go with it, the biggest stumbling block to getting people to scrap their Apples seems to be the enormous popularity of the Macintosh brand name--which since its introduction in 1984 has become synonymous with desktop publishing.
The agreement announced last week between IBM and Microsoft is intended to make OS/2 available on a wider range of computers. The companies last Monday said they are currently developing a new version of OS/2 that would run on cheaper, low-end machines with only two megabytes of internal memory. Current OS/2 versions aren’t recommended for use in computers with less than four megabytes of memory.
While Apple denies that heated rivalry is the reason, observers say that an unusually aggressive marketing campaign is perhaps the best indication that Apple takes IBM’s threat seriously. Reviving and strengthening a concept that has been dormant two years, Apple this fall is letting prospective customers “test drive” a Macintosh and, if not satisfied, return it by mid-January. Two years ago, the trial period was much shorter.
