Ads claim adding HP is a plus
Hewlett-Packard plans on Monday to kick off a new advertising campaign on which it's spending hundreds of millions of dollars to show some new math.
As previously reported, the advertising campaign focuses on firsthand experiences of HP customers. However, in a clear attempt to put the proxy battle and integration challenges of the Compaq merger behind it, HP's ads make no mention of the Compaq acquisition.
"We are HP," said Karen Jones, the company's director of worldwide brand advertising. The company did not even consider featuring the acquisition or overtly highlighting the combined strength of the two companies as part of the campaign, Jones said. "It was always about moving forward."
For the first six months following the completion of the merger in May, company executives often referred to the company as "the new HP." That phrase has since been banned within the company. Especially with the departure last week of President Michael Capellas, HP has been trying to make the case that much of the merger integration work is behind it and the company is ready for business.
HP did not offer a specific dollar amount on the brand campaign, but said overall ad spending over the next 12 months will be in the hundreds of millions of dollars.
In the new ads, HP shows its work with a particular customer, then makes the case that the customer "+ HP = everything is possible." The campaign includes TV spots, print ads and online marketing, as well as bus shelters and billboards, all centering around HP's work for various customers including FedEx, DreamWorks and NASA.
Analyst Amy Wohl, who heads the technology consulting firm Wohl Associates, said HP's ads are aimed at doing more than just showing testimonials; they are aimed at freeing HP's stodgy image.
"They are a company that builds really reliable products and has a reputation for service," Wohl said. "They are also boring."
In the ads, HP shows large, bold images of the results of its technology, rather than focusing on HP gear or pictures of executives. For example, one ad that's to appear prominently in consumer media features the animated character Shrek, highlighting that HP Linux-based PCs are used by DreamWorks, the movie's creator.
Ads that show race cars or an astronaut in space are a lot more interesting than those that depict an executive in a shirt and tie, Wohl said. "They are much more likely to catch people's attention," she said.
The campaign also has a large online advertising component. Although the company would not say how much of its budget is going toward Web ads, Mary Bermel, HP's interactive marketing director, said, "Our audiences tend to use the Web to get their information."
In the online ads, customers can see HP's work step by step, either within the ad or in some cases by going to a separate Web site. The company is advertising on a variety of consumer and industry sites, including a complete takeover of Yahoo's main page on Monday.
On the same day, HP kicks off the print campaign with a 16-page insert that will run in The Wall Street Journal, The New York Times and USA Today. On television, the company will do its fair share of sports and cable advertising, along with spots on shows such as "The West Wing" and "E.R." Although the print ads focus on business customers, the television ad includes individual customers.
The campaign will launch in the United States and in international media this year, expanding into Europe then Asia and the rest of the world next year.
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The company has already overhauled its consumer and business-to-business Web sites.
Ahead of the new ad campaign, Merrill Lynch analyst Steven Milunovich panned the overall theme of the ads, noting that slogans that could apply to any number of companies are not the way to go.
"In our view, most slogans are meaningless generalities," Milunovich said in a research note Friday. "A good slogan would be hard to associate with another company."
Plus, he added, customers are keenly aware in this environment that everything is not possible.
As an example of a good slogan, Milunovich pointed to EMC's "The Enterprise Storage Company" as well focused on the company's strength.
At the same time, though, Milunovich said he supported the idea of a big marketing campaign and noted that similar branding efforts have cost $400 million.
"If HP wants to be the IBM alternative, it will require big bucks to create a big brand," he said.