Silicon Valley/San Jose Business Journal
May 28, 2001
Firms polish image during ‘down’ timeRobert Mullins and Neil Orman
Viewers of "The West Wing" last week had two puzzles to ponder during one of the station breaks. One was whether President Josiah Bartlet would run for re-election. The other was the identity of one of the advertisers -- Applied Materials Inc.
Although many viewers probably had never heard of the Santa Clara maker of chip manufacturing equipment, Applied Materials bought time during the network TV show to make a point: It wants its name to be as well known as McDonald's, Kraft and Chevrolet.
In the advertising trade, such commercials are called "image" or "branding" ads. They are not intended to induce the viewer to buy, but rather to develop a positive image of the company.
Businesses that don't sell products directly to the public, but want to become as well known, often use image ads. The demise of the dot-com boom, and the ad frenzy that accompanied it, has created an opportunity for the valley's old guard to build or reinforce their brands.
"The noise is reduced substantially," says Tom Hayes, managing director of global corporate affairs at Applied Materials. "It's a smart time to be out there because there are fewer distractions and [ad] prices have dropped."
Other valley companies that say their brand-building efforts have been made easier by the reduced ad noise include Intel Corp. and Agilent Technologies Inc.
Applied Materials launched its first-ever image ads this month, a global $30 million campaign including major publications, outdoor ads and commercials on highly rated TV programs. The company's new "Information for Everyone" campaign represents a tenfold increase over its marketing budget last year.
Intel, a veteran of branding efforts, also is stepping up activities in this sphere. The Santa Clara-based chipmaker will spend about $150 million on advertising to establish its Pentium 4 processor as the "Center of Your Digital World."
"We make a lot of statements about continuing to invest in R&D" during a slowdown for the company's business, says John Travis, Intel's director of worldwide consumer promotions. "The same goes for our marketing."
The core of Intel's branding effort is a TV ad campaign featuring the New York theater troupe known as the Blue Man Group. Mr. Travis declines to break out spending figures, but says this campaign has been the company's most successful ad effort.
Intel measures a campaign's success by the percentage of people who can recall the advertising as well as the product it promotes.
Companies launch image ad campaigns for a number of reasons, say valley advertising executives. Such ads are used to recruit employees, influence the company's stock price or create goodwill, a valuable commodity for any firm.
Mr. Hayes of Applied Materials says this year's ads convey more serious and thoughtful messages than the in-your-face dot-com ads of the past few years.
"For a while, the dot-com ads were grotesque and noisy," he says. "This is a time for more meaningful messages."
There are fewer image ads on TV this year than last year or the year before, says David Zeitman, principal and creative director of Sic 'Em Advertising Inc., a Redwood City-based agency.
This year, with many dot-coms gone and the economy slowing, more ad inventory is available and rates are down. A company such as Applied Materials can place ads on prime-time shows even if most of the viewers can't relate to the ad, Mr. Zeitman says.
"There are a lot of wasted eyeballs you can buy for cheap," he says.
But not completely wasted, Mr. Zeitman adds. Considering that the audience for shows such as "The West Wing" and "ER" is more highly educated than for many other shows, some viewers may be corporate executives in a position to make equipment purchases from a company such Applied Materials.
The company's ads have aired on CNN and CNBC cable news channels and on Sunday morning news interview shows such as "Meet the Press." They also will appear in the televised NBA Finals in a few weeks, says Jeanne Selvester, general manager of the San Francisco office of Creative Media Inc., an advertising buying agency.
Applied's spots also have aired on stations in San Francisco and in Austin, Texas, during broadcasts of "The West Wing" and "ER."
Intel's Blue Man campaign runs on prime-time TV and includes online ads and in-store demos.
The package of TV ads that was part of Applied Materials' campaign would have cost about 15 percent to 20 percent more had the company bought them last year, says Ms. Selvester.
The average rate for a 30-second local spot during prime time on Channel 4 these days is about $6,000, and programs such as "West Wing" command higher ad dollars, according to an advertising executive at KRON-Channel 4, the San Francisco NBC affiliate that airs the program.
Barbara Christian, director of brand advertising for Agilent Technologies, says the company's "share of voice" has increased because of the dot-com slowdown.
Agilent is running advertisements with the tagline "Dreams Made Real" in media designed to reach "influencers." The ads include TV spots during major televised sports events and "60 Minutes," and print media such as Business Week and The Wall Street Journal.
Applied's ads show images of people around the world using headsets, cell phones, handheld computers and other products whose embedded chips were made with Applied Materials equipment.
"It is an image of a strong, healthy company that plays a vital role in bringing information to everyone in the world," says Mark Whitty, president of Big Mouth LLC, the San Francisco ad agency that created the Applied campaign.
Intel's latest trio of Blue Man ads, titled "Tubes," "Light Bulbs" and "Raising Four," showcase the Blue Man Group unveiling a huge 4 in a variety of unique ways.
The company's first crop of Blue Man ads began in September and ran through the end of 2000, while this second round started in February and runs through the end of this month.
Companies may also want to run image ads now to make sure the public knows they are still around, says Rick Mathieson, vice president of creative strategy for Creative i Inc., a Palo Alto ad agency.
Some investors may lump all technology companies together -- failed dot-coms with providers of core technology. Running an image ad today, at bargain ad rates, conveys that a company such as Applied Materials remains a major presence, says Mr. Mathieson.
"I think it's a pretty bold move for them to take advantage of this opportunity," he says.
Robert Mullins and NEIL ORMAN are members of the Business Journal's technology team.