Electronic Data Systems

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Electronic Data Systems

5400 Legacy Drive
Plano, Texas 75024
USA
Telephone: (800) 566-9337
Web site: www.eds.com

CAT HERDERS CAMPAIGN

OVERVIEW

Although Electronic Data Systems (EDS), the Plano, Texas-based company founded by H. Ross Perot in 1962, was the acknowledged inventor of the information technology (IT) services industry, by the end of the twentieth century EDS, despite continued growth, had fallen behind its competitors—especially regarding its public image. To correct that, EDS chose Fallon McElligott (later Fallon Worldwide), an independent Minneapolis ad agency, as its lead agency in May 1999. Fallon, in conjunction with new corporate management at EDS, saw its mission as changing the EDS image not only with respect to the company's present and future customers but also for EDS employees, whose morale was low. The ad campaign set out to do this by creating brand awareness where either none had existed or the awareness had petrified over the years.

"Cat Herders" (the name applies to the initial television spot and the campaign), which played off the industry expression "it's like herding cats," served both these purposes. It gave EDS employees an image that was serious, despite the humor of the commercial, and it highlighted EDS's problem-solving capabilities for its customers. The initial campaign used television, print, the Internet, and the COMDEX trade show at a cost of approximately $8 million. The campaign was presented as a trilogy. The first television spot, "Cat Herders," was a huge success, while the second and third spots, "Airplane" and "Running with the Squirrels," were eye-catching follow-ups but lacked the impact of the initial spot.

The "Cat Herders" spot ran through 2001 and won numerous awards, including an Emmy Award nomination. EDS also enjoyed an improvement in employee morale and corporate image, along with new contracts and acquisitions. In 2000 EDS reported fourth-quarter earnings of $5.2 billion, a 5 percent increase from the previous year and a new quarterly high for the company.

HISTORICAL CONTEXT

Throughout the 1960s, 1970s, and 1980s, EDS experienced phenomenal growth and was the recognized leader in the IT services industry, enjoying government, military, and commercial contracts. In 1984 EDS became a division of General Motors (GM), and three years later, when EDS celebrated its 25th anniversary, it reported global revenues of $4.4 billion. In 1996 EDS severed its relationship with GM and once again became an independent company. The 1990s, which saw the rise of the dot-com businesses, was a decade in which EDS slipped behind newer competitors in the race for customers. Although EDS expanded globally throughout the decade, its image was that of a lumbering dinosaur whose primary ties were to the military. In an October 2000 article, Associated Press writer David Koenig quoted then EDS president and chief operating officer Jeffrey M. Heller on the company's decline. "By '96," Heller said, "technology had changed and skills had changed. We didn't change fast enough." Koenig noted that 1996 was also the year that IBM overtook EDS as leader in the IT services industry, though the computer giant had only been in the industry a few years.

Events leading to the EDS ad campaign trilogy occurred quickly in 1999. In January Richard Brown was named chairman and CEO. Fallon was chosen as lead agency, and Don Uzzi, named marketer of the year in 1995, came on board. Almost from the beginning Uzzi injected a bold style into staid EDS when he invited broadcast and print reporters to EDS's Plano headquarters to witness the company's handling of the Y2K transition. It was a successful PR move that was topped only by the ad campaign.

TARGET MARKET

With the ad campaign itself, EDS relied again on the press to help get its message across. Fallon, in its Brief of Effectiveness (submitted to the EFFIE Awards committee), stated, "We were after the editorial staff at key business and IT vehicles such as the Wall Street Journal, New York Times, ZDNet, etc. For them, EDS represented the Old Economy in a changed world. Reporters typically ignored or dismissed EDS as a company with little news value."

Other groups targeted by the ad campaign were technology decision makers and EDS employees and possible recruits. The first group consisted of company IT directors, marketing directors of e-commerce divisions, and top-level corporate executives: CEOs, COOs, and CIOs. The second group, employees and recruits, was targeted to reinvigorate corporate culture at EDS.

COMPETITION

No company, even one that essentially invented an industry as EDS did, could remain without competitors for long. While EDS, especially during the Perot years, had successfully fended off challengers in the IT industry and grown into a multi-billion-dollar business, others sought to carve their own niches in the fast-growing IT services industry. Most notable among EDS's competitors was top computer hardware manufacturer IBM and its computer services division, IBM Global Services. Despite being the industry leader, IBM, too, suffered from a somewhat stodgy image. The firm tried to soften and humanize its reputation with a $100 million branding campaign in 1995. Entitled "Subtitles," the campaign emphasized IBM's global reach and power by featuring people in different countries using IBM products. In the television spots the actors spoke in their native tongues, and subtitles appeared on the screen. A strong element of humor put a positive spin on IBM's international dominance.

EDS's market share was also cut into by such startup companies as Scient Corp., founded in 1997 in San Francisco; then New York-based Razorfish (now known as Avenue A/Razorfish and headquartered in Seattle), which was founded in 1995; and Viant Corp. of Boston, originally Silicon Valley Internet Partners. Though each of these companies experienced its own troubles when the dot-com bubble burst, at the time they were viewed as hipper and more nimble—able to solve technology problems that were arising in the new information age that had come to fruition in the 1990s.

H. ROSS PEROT: THE MAN WHO WOULD BE PRESIDENT

Born in Texarkana, Texas, in 1930, H. Ross Perot first came to the attention of the general public when he funded an operation to rescue two of his employees at EDS from an Iranian prison in 1979. Perot, a graduate of the U.S. Naval Academy, had started EDS in 1962, virtually inventing the IT services industry while building his company into a multi-billion-dollar international corporation. He sold EDS to General Motors in 1984, thereby gaining a seat on GM's board. Two years later he quit the GM board and sold his remaining shares in EDS to the parent company. (EDS became an independent company in 1996.) In 1988 Perot started Perot Systems, also a computer company.

Perot is best known for his two quixotic presidential candidacies in the 1990s. In 1992 he garnered 19 percent of the presidential vote, the highest percentage for an independent or third-party candidate since Theodore Roosevelt in 1912. His percentage helped defeat incumbent George Bush Sr. and elect Bill Clinton president. Perot opposed the North American Free Trade Agreement (a pet Clinton project) and was the prime mover in the formation of the Reform Party in 1995. His second run for president was as that party's candidate in 1996. Perot was excluded from the televised debates and went on to receive just 8 percent of the vote.

MARKETING STRATEGY

The first spot, "Cat Herders," set the tone for the trilogy. It provided a humorously visual description of the well-known phrase "it's like herding cats." In Silicon Valley parlance this phrase had come to mean working on extremely hard technology problems. The spot showed range-hardened cowboys on the trail, but instead of cattle they herded cats across a river. The visual united the new (Silicon Valley lingo) with the established (an image of a cowboy—rather fitting for a company located in Texas). It also gave EDS's employees a new identity and feeling of self-worth. As "cat herders" they were the tech people who could get anything done. Brand identification for viewers was provided by a final voice-over, which intoned, "EDS, managing the complexities of e-business."

The "Cat Herders" commercial made its debut in the most glamorous, and perhaps most expensive, of all television advertising venues, the Super Bowl. It aired on January 30, 2000, during Super Bowl XXXIV. EDS and Fallon chose to show the commercial during major televised sporting events, noting that the target group of technology decision makers was more likely to be viewing such programs. Subsequently the "Cat Herders" spot appeared during the U.S. Open golf tournament, in June; the National Basketball Association finals, also in June; the U.S. Open tennis tournament, in late August to early September; the Presidents Cup golf tournament, in October; and Monday Night Football. Fifty percent of the "Cat Herders" portion of the campaign went to television. The television spots were reinforced by print ads in such publications as the Wall Street Journal, Fortune, Forbes, and Wired. Ads also appeared in the online magazine Salon.

The second spot in the campaign was "Airplane," and it made its debut later in 2000. EDS and Fallon stuck to the winning strategy of breaking the commercial during a prime televised sporting event; "Airplane" appeared during the Thanksgiving holiday National Football League network broadcasts. The spot also appeared during broadcasts of Monday Night Football. "Airplane" depicted a group of mechanics assembling an airplane while in flight. Like its predecessor, "Airplane" was a visual manifestation of a well-known business expression, in this case "building an airplane on the fly." Explaining the spot's connection and symbolism, David Lubars, then president and executive director at Fallon, as quoted over the PR Newswire, said, "This is the second commercial in the series. The first, 'Cat Herders,' talked about the importance of aligning a company's scattered technologies and moving them in the right direction. The message of 'Airplane' is a natural follow-up in that it answers the question, 'Now I know what to do, how do I do it without messing up my company in the process?' "

"Running with the Squirrels" was the final spot in the trilogy, and it debuted on January 28, 2001, during the broadcast of Super Bowl XXXV. The ad parodied the famous running of the bulls in Pamplona, Spain. This was a bit of a departure from the first two spots in the series in that it did not depict a popular industry maxim. The humor aspect aside, squirrels were chosen because of their speed and agility. The commercial, at least the actors' part of it, was shot in Pedrazza, Spain, not far from Madrid; the squirrels (some real but most computer generated) were filmed on a California soundstage. Following Super Bowl XXXV, "Running with the Squirrels" ran in rotation with the previous two spots in the series.

OUTCOME

"Cat Herders" was an unqualified success for EDS. The campaign won numerous advertising awards, including a First Boards Award in 2000, a Cannes Silver Lion in 2000, a bronze Clio in 2001, Advertising Age's Best Visual Effects Award in 2001, and a silver EFFIE Award in 2001. EDS also estimated that its initial investment of about $8 million brought in an additional $12 million in "incremental PR"—233 outlets mentioned EDS in their pre- and post-Super Bowl coverage (according to the EFFIE Awards Brief of Effectiveness submitted by Fallon). The ad was even referred to by President Bill Clinton.

Speaking a year after the fact, Uzzi, EDS's senior vice president for global advertising, as quoted by Stefani Eads in BusinessWeek Online, said, "The Super Bowl [ad] played out in spades for our business. The first week after the Super Bowl, we had 10 million hits to EDS.com, which is five times our normal rate. And brand awareness increased 40 percent year-on-year in 2000, something we attribute greatly to the commercial's success." Uzzi's summation was echoed by Fallon boss Lubars in an article in the Minneapolis Star Tribune, written by Ann Merrill. Speaking a few days prior to Super Bowl XXXV, Lubars observed, "Last year the Super Bowl ad got an incredible internal buzz at EDS." Merrill also noted that there was "an influx of resumes" at the company following the "Cat Herders" airing.

The effectiveness of the latter two spots in the series was less clear cut. Critics were generally silent on "Airplane," but "Running with the Squirrels" provoked a mixed reaction. Some media critics, such as Ellen Neubourne, questioned the commercial's effectiveness in putting across its message. Writing in BusinessWeek Online, she gave "Running with the Squirrels" a thumbs-down, commenting that "the sure sign that the ad is in trouble comes at the end when text has to pop onto the screen and explain to the viewer that the squirrels are meant to represent small and nimble competition. If we got all the way to the final five seconds without getting it, the ad didn't work."

Other media critics, analysts, and advertising professionals felt "Running with the Squirrels" was as funny as "Cat Herders" but too much like the previous spot to be effective. Nevertheless EDS continued to prosper throughout 2001; the company reported fourth-quarter revenues of $5.9 billion and net income of $405 million. The "Cat Herders" campaign ran through 2001 and was replaced by a series of 50 thirty-second television spots that ran over the course of 17 days during the 2002 Winter Olympics.