IBM today launched a $75 million advertising campaign to boost the low profile of its hugely successful services division. The new "e-business people" print, online, and airport ad campaign puts the spotlight on the company's $29 billion services arm.
The ad plan comes after two years of focus group research in the United States, Japan, and Germany that proved what IBM executives already suspected: customers still think of IBM, the world's No. 1 services firm, as a computer company.
That despite the fact that IBM's global services unit is the market leader. Its sales easily beat those of both its biggest rivals: $15.2 billion Electronic Data Systems and $7.1 billion Computer Sciences.
"We don't get the credit we think we deserve in being No. 1," said Phil Juliano, vice president of marketing for Somers, New York-based IBM Global. "We've got a solid No. 1 position in the IT services marketplace but our mind share doesn't equal our marketplace success."
Before building the new ad campaign, IBM held more than 200 focus groups questioning business and IT managers separately about the IT services market.
"We found that IBM came out as "passing" on services but not in any great detail," Juliano said. "There really was a lack of understanding that we had all these broad offerings. We heard that IBM has a strong image as trustworthy and dependable, but there was this vacuum where the services part wasn't there."
IBM's services unit, run by 126,000 employees, offers clients everything from IT consulting to Web site building to business software system integration and computer systems management. While the company's hardware sales rose just 2 percent in the fourth quarter, services have grown about 20 percent annually in recent years.
To improve corporate customer awareness of the company's services, IBM hired ad firm Olgilvy & Mather to do the "e-business people" campaign, spending a healthy chunk of the company's overall $600 million advertising budget.
The new ads, which have the same look as IBM's ongoing e-business television and print ad campaign, feature global services employees including "ethical hacker" Nick Simicich, electronic business retailer Catharine Harding, business transformation specialist Patrick McMahon, e-business accelerator Amir Khan, behavioral scientist John Karat, and business intelligence specialist John Hoh.
The ads will run in newspapers, business and general interest magazines, and feature the tagline: "IBM Global Services. People who think. People who do. People who get it."
Several of IBM's competitors have already stepped up their advertising blitz. Andersen Consulting is spending $44 million on its current campaign that debuted last October and featured a 30-second television commercial entitled "Constellations," a computer-animated spot that ran on CNN and CNBC. Rival KPMG also earmarked $60 million for public relations and advertising that includes television and print ads launched last September with a tag line "KPMG. It's time for clarity."
Now, it's time for IBM to catch up by building its own services-brand awareness campaign, Juliano said.
"Campaigns are at their best when you're already in a good position," he said. "When you're behind isn't a time to start."