International Business Machines Corp.

Updated About encyclopedia.com content Print Article Share Article
views updated

International Business Machines Corp.

CAN YOU SEE IT? CAMPAIGN
E-BUSINESS CAMPAIGN
GIZMO CAMPAIGN
LINUX CAMPAIGN
SOLUTIONS FOR A SMALL PLANET CAMPAIGN

New Orchard Road
Armonk, New York 10504
USA
Telephone: (914) 499-1900
Web site: www.ibm.com

CAN YOU SEE IT? CAMPAIGN

OVERVIEW

In 2002 the world's largest provider of computer products and services, International Business Machines Corp. (IBM), was relishing the comeback it had begun to experience eight years earlier. The computer titan had consolidated its scattered advertising accounts into a single account with one agency. By 2003 IBM was emerging not only as a leader in the production of computers but also as a consultant for e-business, a term referring to the integration of technologies such as E-mail servers, internal networks, call centers, and online inventory technology. To attract c-level (e.g., chief executive officer or chief technology officer) executives to its products and e-business consulting service, IBM released a campaign titled "Can You See It?"

The company's ad agency, Ogilvy & Mather Worldwide, created the campaign using IBM's $600 million annual advertising budget. Print and television spots first appeared on April 21, 2003. Print ads featured businesses that were flourishing with IBM's e-business consulting. One ad displayed a bank's exterior and read, "A bank discovers a source of new customers. Existing customers. Can you see it?" Ads appeared in the Wall Street Journal, Computerworld, and Information Week. With a less serious approach than the print ads, the campaign's television spots featured c-level executives explaining their business-related nightmares to therapists. In the 30-second spot "Museum," for instance, an executive explained his recurring nightmare about being on exhibit at a natural history museum. In his dream the executive was trapped inside a glass case while a museum guide explained to visitors that "Executiva Obsoletus" had become extinct after not adapting to contemporary business demands. The campaign continued until the end of 2003.

In 2004 "Can You See It?" won Best of Show at the ICON Awards, an event that recognized achievements in advertising. During the first nine months of 2003 IBM also posted a $1.5 billion income gain over the same period of 2002. The ad critic Barbara Lippert praised the television spots in Adweek, stating, "There's no overt sexual interpretation, as with Freud, but the commercials do make the solving of abstruse business problems like outsourcing and e-business on demand a little sexier, smarter and more fun."

HISTORICAL CONTEXT

In early 1994 IBM's stronghold on the computer industry was giving way to younger companies such as Compaq Computer Corp. and Dell Computer. Advertising for the 83-year-old IBM was delegated to 42 different advertising agencies. Lisa Baird, vice president of worldwide advertising for IBM, explained to B to B that using so many ad agencies had created problems for the company. "We had different logo presentations, the pieces of the IBM story were being told everywhere and were different country to country and business unit to business unit, and we weren't using our competitive advantage end to end to help customers be more successful." Hoping to consolidate its image and improve sales, IBM awarded its entire $500 million advertising account to the agency Ogilvy & Mather in 1994.

In 1997 the ad agency marketed IBM using the tagline "e-business," a term coined by IBM and which referred to the integration of technologies such as E-mail servers, internal network services, call centers, and online inventory technology. IBM's focus expanded at the beginning of 2002, when its new CEO, Sam Palmisano, changed the company's tagline to "e-business on demand" to emphasize its dedication to the ever-changing demands of customers.

The tagline "e-business on demand" was first used in IBM's "Gizmo" campaign, released in October 2002. Humorous television spots for the campaign featured executives from the fictitious electronics company Bagotronics evaluating inventions such as an elixir that granted omniscience and a "business time machine." Executives in the spots considered using the latter to go back in time and amend underbudgeted jobs and dead-end consulting projects. The spots ended with copy explaining that IBM's e-business consulting and e-business products provided reality-based solutions to such problems. Whereas "Gizmo" targeted both c-level executives and information technology (IT) employees, the "Can You See It?" campaign was aimed primarily at c-level executives.

TARGET MARKET

The campaign's target market consisted of c-level (e.g., chief executive officer, chief technology officer) executives who typically affected purchasing decisions for corporations. Ogilvy & Mather aired the commercials on news channels such as CNN and MSNBC to target an audience that treated television more as a resource than as a source of entertainment. Print ads appeared in similar-minded publications such as the Wall Street Journal, Computerworld, and Information Week.

Research conducted by Ogilvy & Mather before the campaign revealed that high-level executives worried about large-scale problems. To connect with this target, television spots featured c-level executives explaining corporate-level problems to their therapists. One executive loathed her business's lack of focus. Another expressed doubt about his company's ability to adjust quickly to future changes. Chris Wall, a senior partner at Ogilvy & Mather, explained to B to B that even levelheaded executives agonized over their business's future. "The whole notion of anxiety really resonated. It was simply an exaggeration of something that is quite real," Wall said. "Executives watching these spots should come away thinking, this company gets it, it understands me and my problem."

The "Can You See It?" message did not necessarily tout IBM's technology. Instead it suggested that IBM understood business and sold services to help c-level executives. Creatives at Ogilvy & Mather did not want the target to order IBM products after viewing the spots, but instead wanted the spots to prompt executives into a discussion about using IBM as a technology consultant. Using humor, each spot featured a therapist attributing his or her client's nightmares to business problems. Copy then explained that IBM offered a viable solution to similar problems. Barbara Lippert wrote in Adweek, "Not only does this IBM campaign manage to talk e-business with all the 'c-level' executives it needs to reach, it also manages to make fun of corporately correct speech and procedures, no doubt learned at '90s-style touchy-feely, walking-on-coals, being-blindfolded-to-learn-to-trust bonding retreats."

COMPETITION

The computer company Sun Microsystems posted sales in 2002 that were only 15 percent of IBM's sales. Servers, the large computers that businesses used for their networks, were Sun's flagship product. Sun also introduced in 1995 a software language called Java, which could be used to create applications for the Internet, video games, mobile phones, and computers.

In 2003 the ad agency J. Walter Thompson released the first Sun advertising campaign that targeted consumers instead of only businesses. The campaign advertised Sun's Java software, which was increasingly being used for mobile-phone video games. Sun's website featured pop star Christina Aguilera holding a mobile phone that played Java-based games. The campaign was intended to strengthen Java's image and subsequently boost the sales of Java products. "What we would like to create is demand for all things Java," Ingrid Van Den Hoogen, a Sun senior director of marketing, said about the campaign in the Wall Street Journal.

In June 2003 Sun released a multimillion-dollar campaign to discredit IBM. Similar to the concept of a personal computer using Microsoft's Windows operating system, all of Sun's servers used an operating system called Unix. IBM instead used the Linux operating system for its servers along with software titled AIX, which was IBM's proprietary version of Unix. Referring to IBM's blue icon, Sun's print ads read, "Attention AIX users: Sun is here to help … Unfortunately, our friends in Blue have a problem with licensing contracts that could make things very expensive for anyone running AIX." The ad's mention of "licensing contracts" referred to a lawsuit filed by the computer retailer the SCO Group, Inc. The SCO Group claimed that IBM's Linux software had stolen code from Unix. The print ads appeared in the Wall Street Journal and the San Jose Mercury News.

MARKETING STRATEGY

The "Can You See It?" television spots appeared less than six months after IBM's "Gizmo" campaign began and borrowed some of its predecessor's qualities. First airing on April 21, 2003, "Can You See It?" spots even featured actors that had played Bagotronics executives in the "Gizmo" commercials. Just as in "Gizmo," the executives depicted in "Can You See It?" needed help with their businesses. The television spots aired on CNN and MSNBC, which were channels commonly watched by c-level executives.

In the 60-second spot "Balloon" a business executive described a recurring nightmare to a therapist. While resting on a leather couch, he said that in this dream he and his colleague were "falling to our doom" inside the basket of a hot air balloon. The two executives threw everything they could out of the basket, but the balloon continued to plummet. The therapist explained that the nightmare was rooted in the executive's "fixed cost fixation" and recommend he "let go." At first the executive assumed the therapist was suggesting he fire his colleague, which was later revealed to be the executive's brother-in-law Phil. The therapist assured him that that was not necessary. Framed by IBM's trademark blue borders, the commercials copy then stated, "It's an on demand world. Jettison fixed costs. Not Phil." The spot ended with the tagline "e-business on demand" followed by the IBM logo.

Further spots showed therapists connecting the nightmares of c-level executives back to their c-level business problems. Text at the finale of each spot explained that IBM offered e-business consulting or e-business products to solve such problems. Lippert wrote in Adweek, "The work shows that you don't have to be even slightly neurotic, given the reality of business these days, to feel awash in anxiety and worry or that you might just be sunk."

The campaign's print ads, which appeared in business publications, featured images of businesses that were prospering from IBM's advanced e-business products and consulting service. In the print ad "Retailer" an image showed a store selling men's business clothing. The ad's headline read, "A retailer does less selling. Yet gets more sold. Can you see it?" Copy below the headline explained that the store's IBM inventory system had helped a clothing retailer monitor its inventory. Another print ad explained how a Tokyo scooter seller with limited showroom space sold twice the amount of scooters it featured by using IBM. Other ads continued to ask, "Can you see it?"—referring to the audience's ability to "see" how IBM was helping businesses meet the demands of customers. The campaign continued until the end of 2003.

OUTCOME

"Can You See It?" won a gold award and Best of Show at the 2004 ICON Awards, an event that recognized achievements in advertising. IBM's income during the first nine months of 2003 skyrocketed 30 percent compared to the same period in 2002. Advertising critics, citing how difficult it was to blend humor with business-to-business (b-to-b) advertising, praised the IBM campaign. Ellis Booker, the editor of the business magazine B to B, was referring to "Can You See It?" when he wrote, "We give special kudos to humor when it's done well in b-to-b advertising. Because the best of these ads, even as they wink at us, show they know what they're talking about, that there's something important beneath the levity—something we ought to know, think about or do." Booker further explained that campaigns that failed in their attempts to be funny eventually offended the business crowd they were trying to amuse.

TABULATING SUCCESS

The salesman Thomas Watson saved the struggling punch-card processing company Computing-Tabulating-Recording (C-T-R) Company from bankruptcy when he joined C-T-R in 1914. Watson aggressively marketed his new company, which soon landed contracts with the U.S. government during World War I. In 1924 C-T-R changed its name to International Business Machines (IBM) and soon dominated the global market of tabulators, time clocks, and electric typewriters.

"Can You See It?" helped IBM continue its string of success following the consolidation of its advertising account in 1994. Even as the technology sector began crumbling in 2000, IBM remained relatively stable, drawing on its steady capital and decades of experience. "Can You See It?" reinforced IBM's legacy as a business that was determined to help its customers succeed. Lippert praised the campaign in Adweek, stating, "So in these tricky times, forget about buying from some ex-dot-com operator who can't get himself arrested—go to the old guys who will do it comprehensively (but expensively) and correctly, so you can stay nimble and responsive. You might get a better night's sleep in the bargain, and even manage to make it [to] your meeting."

FURTHER READING

Allossery, Patrick. "Big Blue Playing to Win: IBM Canada Targets Mid-sized Companies in New, More-spirited E-business Campaign." National Post (Don Mills, Ontario), May 13, 2002, p. FP8.

Bernstein, Roberta. "2003 Ad Agency of the Year." MC Technology Marketing Intelligence, May 1, 2004, p. 24.

Booker, Ellis. "Finding the Funny in B-to-B Ads." B to B, July 11, 2005, p. 10.

Cuneo, Alice Z. "IBM Puts Push behind Linux; Sees It as Tool to Fight Microsoft." Advertising Age, September 8, 2003, p. 89.

D'Innocenzo, Lisa. "Beating Brand Fatigue." Strategy, November 17, 2003, p. 1.

Kaplan, David. "Into the Blue." Adweek (eastern ed.), July 8, 2002, p. 12.

Kohnstamm, Abby. "Special Report: Power Players." Advertising Age, October 4, 2004, p. P14.

Lippert, Barbara. "IBM's Nightmares on Wall Street." Adweek, May 5, 2003, p. 26.

Maddox, Kate. "Creative." B to B, June 13, 2005, p. 37.

――――――. "IBM, Ogilvy Celebrate 10 Years." B to B, June 7, 2004, p. 1.

――――――. "IBM's Strategy Keeps It In and On Demand." B to B, October 25, 2004, p. 24.

McArthur, Keith. "IBM Launches New Campaign." Globe and Mail (Toronto), May 24, 2004, p. B12.

Silverman, Gary. "IBM Deletes Its 'e' on Demand." Financial Times (London), May 20, 2004, p. 20.

                                            Kevin Teague

E-BUSINESS CAMPAIGN

OVERVIEW

Long associated with mainframe computers, International Business Machines Corporation (IBM) struggled in the late 1980s because it was unable to deal with a world dominated by personal computers and other changes in the marketplace. The fortunes of the giant corporation spiraled downward and touched bottom in 1993. A management shakeout led to a major change of direction as IBM rebranded itself as a solutions company. The company introduced its "Solutions for a Small Planet" marketing campaign in 1995. The tagline from this campaign was then used on the "E-Business" campaign that was released in April 1997.

The "E-Business" campaign, created by ad agency Ogilvy & Mather, targeted small businesses and corporations alike. A multifaceted effort, it featured television spots, prints ads, and Internet elements, all of which emphasized how IBM could help companies take advantage of the business possibilities of the Internet. Each of the early spots, filmed in black and white, presented a typical business problem that IBM, with the power of Internet technology, was able to solve. One spot showed young Web designers who were able to create a flaming logo but were unable to create a website capable of integrating suppliers and customers.

Due in large measure to its marketing efforts, IBM successfully recast itself as a solutions company. The "E-Business" campaign then broke off into a number of directions, focusing, for example, on wireless products and infrastructure. Nevertheless, as IBM entered the new century, the term "e-business" remained at the center of its marketing. The "E-Business" campaign and some of its commercials were also recognized with several advertising-industry awards.

HISTORICAL CONTEXT

The advent of the Internet opened a myriad of opportunities for IBM. The company aggressively promoted the concept of electronic commerce under the trademarked name e-business. E-business combined IBM's strength in networks, information storage, and data management with the global reach of the Internet to create a worldwide marketplace. According to research firm Forrester Research, the trade of goods and services via the Internet was projected to increase from $7.8 billion in 1997 to $105 billion by the year 2000. Although Forrester conceded that this amount accounted for only a small portion of the U.S. gross national product, many clamored to stake claims to it, including IBM. As Jerry Michalski, managing editor of a newsletter focused on computers and communication, told Fortune, "Over time, a portion of practically every transaction will touch the Internet." IBM's CEO, Louis V. Gerstner, Jr., agreed. He explained to U.S. News & World Report, "For 11 years I ran one of the world's most electronic businesses, the American Express Card…. It's a great example of an e-business, a network business—millions and tens of millions of people doing business in hundreds of countries, and it's all done electronically."

IBM's previous advertising campaign, "Solutions for a Small Planet," which began in 1995, was designed to enhance the IBM brand and to assert the company's global yet human image. The television spots showcased various IBM products and services but focused primarily on the IBM brand. "E-Business" leveraged the strength of the brand that "Solutions" had worked to promote and narrowed the focus to IBM's Internet technologies and e-business products and services. "E-Business" was essentially an extension of the "Solutions" campaign, and thus all of the commercials shared the same tagline.

TARGET MARKET

The "E-Business" campaign targeted businesspersons, particularly those in high-tech industries and those involved in making decisions and directing corporate strategies. As Fortune stated, "The advertising is effectively aimed at Everybusinessman, from the FORTUNE 500 to the startup, from the risk-averse 50-something middle manager to the frustrated Gen Xer. But in particular, it is also skewed toward small and medium-sized businesses, which may have thought IBM was out of their league and which also, some believe, provide the greatest e-business growth opportunity for IBM in the near term as big business slowly warms up to the idea." So while the audience appeared broad, its members shared one critical trait: all were involved in businesses that depended heavily on computers and that could benefit from jumping on the Internet bandwagon.

IBM hoped to emphasize the relevance of e-business and to assert its dominance in the field, and one way to accomplish this was to target smaller-sized businesses with which IBM had no prior history. When Irving Wladawsky-Berger, general manager of the company's Internet division, discussed IBM's customer base in an interview with MSNBC Business Video, he indicated that existing customers showed the earliest interest in e-business. He also explained the importance of attracting smaller businesses and the potential power they could wield in an environment such as the Web, where all were created equal. Wladawsky-Berger also explained why IBM generally targeted businesses and businesspeople rather than individual consumers, stating that "for the most part, we know how to work with businesses—large business, mid-sized businesses, more and more small businesses…. That's our forte, and the kinds of things we offer are very attractive to them." IBM's strategy was to help the businesses, and they in turn would reach the consumers.

To entice the target audience, IBM incorporated humor into the "E-Business" campaign, which featured office employees felled by common computer problems such as a malfunctioning printer and telephone glitches during a conference call. It was hoped that office workers and managers, because they had experienced similar frustrations, would be drawn in by the spots. Viewers in the target group would then realize that IBM could help them solve their daily technological trials. An executive at advertising agency Foote Cone & Belding commented on a print portion of IBM's "E-Business" campaign in Fortune, saying, "it has taken a subject that was terribly esoteric, about which everyone is uncomfortable, and explained it. This is not the arrogant, awesome IBM; this is a very helpful and supportive IBM."

COMPETITION

The Wall Street Journal noted that, despite losing market share and suffering immense losses in the early 1990s, IBM's PC business seemed to be recovering in the second half of the decade. Information on market shares from Dataquest indicated that IBM's take of the U.S. computer market in 1996 was 8.7 percent, which placed the company third behind Compaq, with 13.3 percent, and Packard Bell-NEC, with 11.6 percent. IBM also fared well in the services market. According to the Star Tribune, the company's services division became the second-largest producer of revenue in the first quarter of 1996, posting sales of $3.2 billion and passing the software business for the first time. Although IBM faced competition from EDS, Computer Sciences, and Andersen Consulting, CEO Gerstner felt confident that the company could be a formidable force in the services sector. He told the Star Tribune that, as the largest manufacturer of computers, software, and disk drives, "We can build a very successful model for growth around services."

E-COMMERCE VS. E-BUSINESS

In the mid-1990s IBM coined the term "e-business," which referred to the infrastructure of E-mail servers, network servers, and even call centers used by a business. The term was commonly confused with the existing term "e-commerce," which referred to business conducted over the Internet.

IBM was not impregnable, however, and the company faced considerable competition in many fields. IBM struggled to earn market share in the global arena, and International Data reported that, although the worldwide information technology market grew 13 percent in 1996, IBM's once dominant 21 percent share in 1987 had dropped to 12 percent in 1996, down even from 15 percent in 1993. An executive at the North American unit of British Airways told the Wall Street Journal, "Ten years ago, IBM would have been the obvious lead choice…. There are a lot more situations [today] where IBM has to make much greater efforts to win the work." These situations included the relatively new playing field of e-business, where competitors such as Microsoft, Netscape Communications, and Yahoo! would certainly line up for a piece of the action. Microsoft's Eric Koivisto told Fortune, "A lot of companies share the desire to be the one people think of when they want to conduct commerce using the Web."

MARKETING STRATEGY

The purpose of the "E-Business" campaign was to convince customers that IBM was the company that could offer the best solutions for their e-business and Internet problems. The first phase of the campaign began in April 1997 with four television spots, a print effort, and Internet ads. The second phase, which started in October with a budget of $200 million, was touted as a new promotion. Many of the television commercials focused on a business problem occurring in an office environment and then introduced IBM as the company that could help. Stylistically unique, the spots were filmed in black and white, with a blue border surrounding each frame. Steve Hayden of the ad agency Ogilvy & Mather explained the message of the "E-Business" spots to Adweek when he said, "There have been a lot of communications saying you can get on the Internet overnight and suddenly everything is rosy." He noted that the Internet "does change everything about the way you do business, but it's not quite that simple." The spots emphasized that, while technological problems arose constantly, IBM was there to help.

The first batch of television spots included "Whizzy," "Whizzy Website," "Conference Call," and "Virus." The last showed problems that could arise from computer viruses. A group of office employees tried to solve a printing problem only to discover that a coworker had downloaded a virus off the Web. The spot promoted IBM's virus scanning products. "Whizzy Website" showed two men reviewing various websites on the Internet and animatedly discussing features they could put on their own site. One commented, "Wait until the guys in marketing see this!" The other said, "We could get a flaming, dancing logo," and the two men both shouted, "We can do anything!" Their spirits were tempered, however, when one asked the other, "Can you order any of this stuff?" and the other responded, "No." The spot then cut to a frame with the words "IBM Internet Solutions," with the voice-over saying, "IBM helps business websites do business." The spot ended with the familiar tagline from the "Solutions" campaign. IBM's Michael Reene explained the strategy behind the spot at an industry forum: "E-business isn't about twirling logos and fire-breathing web sites. It's about being more competitive … and profitable. It's about expanding global market opportunities."

IBM DROPS THE BALL AT THE OLYMPIC GAMES

As IBM regained footing in the precarious high-tech industry, the company also indulged in high-profile events to announce its comeback. IBM may have jumped the gun, however, when it stepped up as the exclusive provider of computing services for the 1996 Olympic Summer Games in Atlanta. An official sponsor, IBM handled everything from the tabulation of results and scoring to the management of schedules, and the company greatly publicized its involvement. While the world watched, however, IBM stumbled, for the system responsible for transmitting results to the news media was slow and inaccurate, and news organizations resorted to copying down scores from telecasts or to sending assistants to sports arenas to collect results by hand. A wiser, much more low-key IBM arrived at the 1998 Winter Games in Nagano, Japan, determined to win a quiet victory the second time around.

Other spots included "Restaurant," "On Hold," "Websters," "Christmas," "Web Jam," "Hype," and "Knowledge." "Restaurant" featured a group of businessmen discussing the online purchase of golf clubs. One asked, "Are you crazy?" and another said, "Your life may be ruined." The spot promoted IBM's encryption technology. Both "Hype" and "Web Jam," which were part of the October promotion, included a frame with IBM's "e-business solutions" logo, with the e graphically encased in a circle. "Hype" featured two men sitting in a conference room, one reading documents while the other typed on a laptop. The reader said, "It says here the Internet is the future of business." He paused, then continued, "We have to be on the Internet." The other asked, "Why?" The reader replied, "Doesn't say." With catchy piano music in the background, the text explained, "IBM helps thousands of companies do real business on the Web." "Web Jam," which continued with the previous theme, featured two male office employees dealing with a website problem. When one said, "Check out the flame now," the other showed alarm. He later said, "We should have upgraded this server," to which the other replied, "Can't. It's not scalable." The spot culminated in a frame that explained, "IBM Scalable Web Servers mean never having to say you're sorry." Although the spots were lighthearted and humorous, the problems featured could seriously damage a business's operations.

Wladawsky-Berger summed up IBM's intent when he told MSNBC Business Video, "We want people, first of all, to agree that something dramatic is happening and that this is something they need to get on with, and if they say—what do I do next? We want them to think—well, call IBM." Carla Hendra, Ogilvy & Mather's president, explained to Mediaweek in 1999 how the different elements of the campaign worked together: "We used television for brand awareness and to drive traffic to the Web. Business print was used for more in-depth messaging to opinion leaders. Web advertising was meant to show the medium is the message."

In an expansion of the "E-Business" campaign, launched in October 1999, IBM focused on what it called "e-culture," highlighting customer testimonials and the depiction of real-life solutions IBM offered its customers. A few months later, in a related effort, IBM released a campaign called "E-Business People" that focused on IBM employees who provided the solutions. The "Solutions for a Small Planet" slogan continued to be used in 2000 when IBM turned its attention to the emerging wireless market. These e-business spots, for example, showed a young woman in Italy using a cell phone to arrange a credit-card purchase from a vending machine. By this time a major portion of IBM advertising was devoted to e-business. In a 2000 article Brandweek quoted an unnamed IBM representative as saying, "People ask us 'What comes after e-business?' More e-business."

OUTCOME

The "E-Business" campaign did not end so much as it branched off into a number of directions, as "e-business" in effect became the IBM brand. In 1998 IBM began to promote what it called e-business tools. This effort was followed by "E-culture," "E-Business People," and the wireless spots. In 2002 IBM was still flying high despite the collapse of the dot-com sector. It introduced a new campaign, "E-Business Is the Game. Play to Win," which focused on the need to maintain a robust computer infrastructure. A subsequent campaign, "E-Business On Demand," showed how companies could leverage that infrastructure to better serve their customers in a fast-paced world.

The "E-Business" campaign met with varied reactions among viewers. USA Today's Ad Track, a poll that measured an advertising campaign's popularity and effectiveness, found that a mere 11 percent of those surveyed actually liked the spots a lot. Forty-three percent were neutral, and 7 percent of viewers did not like the advertisements. In terms of effectiveness, the campaign earned higher ratings, with 24 percent of men polled finding the ads highly effective. In contrast, only 11 percent of women surveyed considered the spots highly effective. IBM representatives noted that Ad Track generally polled a diverse group, and because the campaign was aimed at a specific target group, this could explain the low scores. IBM declared the campaign a success, and others agreed. Adweek voted "E-Business" the best campaign of the year in 1997, and the spots "Virus" and "Whizzy Website" both won awards at the 1997 Cannes International Advertising Festival. In 2004 the "E-Business On Demand" effort won an EFFIE Award; hosted by the New York American Marketing Association, the EFFIEs were one of the most prestigious awards programs in the advertising industry.

FURTHER READING

Ditlea, Steve. "Big Blue Is Back." Mediaweek, January 4, 1999, p. 28.

Enrico, Dottie. "IBM Ads Compute Low Popularity Score." USA Today, January 19, 1998, p. B6.

Garfield, Bob. "IBM Finds Solution to Become Relevant." Advertising Age, April 7, 1997, p. 53.

Kaplan, David. "Into the Blue: How Ogilvy & Mather Gave IBM a Dash of Color—and a Pile of New Business." Adweek (eastern ed.), July 8, 2002, p. 12.

Marchetti, Michele. "IBM's Marketing Visionary." Sales & Marketing Management, September 2000, p. 52.

Morris, Betsy. "IBM Really Wants Your E-Business." Fortune, November 10, 1997, p. 36f.

Parpis, Eleftheria. "Best Spots 1997." Adweek, February 2, 1998, p. 21.

Wasserman, Todd. "IBM Mines Wireless Gold in New TV Ads." Brandweek, September 11 2000, p. 6.

                                       Mariko Fujinaka

                                            Ed Dinger

GIZMO CAMPAIGN

OVERVIEW

After consolidating its advertising account in 1994 from 42 advertising agencies to just one (Ogilvy & Mather), International Business Machines Corp. (IBM) resurrected its image from an outpaced computer company to that of an innovative leader within the computer industry. Besides streamlining its advertising account, IBM also benefited from the dot-com collapse that started in 2000. While younger companies without IBM's experience and capital perished, IBM expanded its scope by providing more infrastructure hardware, increased software development, and e-business consulting. The term "e-business," coined by IBM in the mid-1990s, referred to the infrastructure of technologies—such as internal networks, E-mail, call centers, and the Internet—used by a business. To tout the ability of IBM's e-business products to meet the ever-changing demands of customers, IBM released its "Gizmo" campaign.

Drawing on the company's estimated $500 million advertising budget, the New York office of Ogilvy & Mather created "Gizmo." The campaign first appeared on October 29, 2002, with a series of teaser television commercials, online ads, and print ads. The campaign included the launch of bagotronics.com, a website belonging to a fictional company called Bagotronics. The majority of the "Gizmo" spots featured the Bagotronics executives troubleshooting their e-business problems with fantastical products such as an elixir that granted omniscience, a time machine that would help amend past mistakes, and a "Universal Business Adapter" that connected any electronic device to any other electronic device. At the end of each spot, copy explained that the featured product did not exist but that IBM's e-business products could provide a realistic solution to a similar problem. The "Gizmo" campaign included nine television spots along with print and online ads. All the commercials featured the tagline "e-business on demand."

During the campaign's first three months, ad awareness for IBM increased 20 percent compared with the three months before the campaign. Among other ad-industry awards, "Gizmo" won a 2004 Silver EFFIE Award in the Corporate Reputation/Image/Identity category. IBM reported an income of $4.9 billion during the first nine months of 2003, a major improvement from the $3.4 billion reported for the same period in 2002.

HISTORICAL CONTEXT

In 1994 sales were waning for the 83-year-old IBM. Its advertising account was spread across 42 different advertising agencies, and its future as a technology leader was diminishing. "The IBM brand, though once heroic and famous and incredibly valuable, declined in relevance," Brian Fetherstonhaugh, the chief operating officer managing IBM's account at Ogilvy & Mather, explained to Adweek. "IBM was rated the 283rd most valuable brand in the world. In addition to a new-business model and positioning, the brand needed to attract people or it faced going out of business."

After awarding its estimated $500 million advertising account in 1994 to just one agency, Ogilvy & Mather, IBM began an extraordinary comeback. The newly appointed ad agency advertised IBM with what it called a "360 degree" approach. Explaining this approach in MC Technology Marketing Intelligence, Carla Hendra, president of Ogilvy & Mather's OgilvyOne North America division, said, "A lot of other agencies create an ad and then extend it out into other channels. We bring together the integrated team at the outset, and look for a kind of media-agnostic solution."

In 1997 IBM released its "E-business" campaign. The term referred to a business's infrastructure, or the integration of different technologies, such as customer call centers, internal computer networks, Internet servers, security services, and E-mail servers. The campaign suggested that businesses could integrate their technologies using IBM infrastructure products. One of the campaign's commercials featured a Web designer trying to please a client with a spinning logo. The unamused client had originally asked the designer not to make a new logo but rather to put his entire supply chain online, one of the services provided by IBM.

In March 2002 Sam Palmisano replaced Lou Gerstner as CEO of IBM. One of Palmisano's first decisions as CEO was to expand IBM's "e-business" tagline to "e-business on demand." The addition of the phrase "on demand" was intended to emphasize the fact that IBM's flexible products and services could fill the fluctuating demands of customers.

NATIONAL GEOGRAPHIC IMAGE COLLECTION

In November 2002 the National Geographic Society, the company that for more than a century was responsible for publishing National Geographic, a magazine that focused on culture, adventure, and nature, began selling 10,000 of its archived images on www.ngsimages.com. The website was made possible by IBM's e-business software and hardware infrastructure technology.

TARGET MARKET

Graham Calderwood, senior partner at Ogilvy & Mather's Toronto office, explained to Strategy that a campaign did not become successful by chance. "It happens through a disciplined approach, and the first part of that is to understand what's going on in the customer's head. You have to make that connection between the advertiser and the target customer." Ogilvy & Mather used focus groups, individual interviews, and workshops to understand the "Gizmo" campaign's target market, which consisted of two groups. First, the campaign targeted the information technology (IT) employees that typically oversaw the purchasing of products used for E-mail, networking, security, and phone systems. The campaign also targeted c-level (i.e., chief information officer, chief technology officer) executives that made purchasing decisions for a company.

Although the campaign appeared across traditional television channels, Ogilvy & Mather hoped to target the IT demographic with video spots on ESPN.com, CNN.com, and other websites popular with IT employees. This group tended to use Internet news sources rather than watch television news programs. The campaign targeted c-level executives by releasing print ads in business magazines.

"Gizmo" also avoided technical details about IBM products. Instead it reached its target market with humor and a strong human element. The majority of the campaign's commercials featured executives of the fictional company Bagotronics listening to an IT employee explain an absurd gizmo that would hopefully solve business problems. Although the ads focused on Bagotronics, Ogilvy & Mather's initial audience testing showed that the audience had a clear idea of which brand was being advertised.

COMPETITION

Carly Fiorina, the CEO of the computer and printer company Hewlett-Packard (HP), spearheaded the largest acquisition in tech-sector history in 2002 after she convinced HP's shareholders to approve the $19 billion acquisition of the computer maker Compaq Computer. To quell the shareholders' doubts, Fiorina argued that the acquisition of Compaq would strengthen HP enough to take infrastructure business away from IBM. Undermining the IBM tagline "e-business on demand," HP titled its $400 million campaign "Demand More." The campaign, released in early 2003, used the tagline "Everything is possible."

"Everybody is doing this," Paul Phillips, manager of competitive strategy for the computer company Sun Microsystems, said to Reuters News. "[HP is] trying to move [itself] closer to the IBM model but without the depth and experience IBM has." To promote its own management software, Sun created a similar campaign titled "N1."

Before HP acquired Compaq, consumer polls showed that the HP brand was still associated only with printers. With "Demand More" HP hoped to expand its reputation into the realm of personal-computer systems, imaging and printing systems, enterprise infrastructures, and services. During the campaign HP released more than 150 new products that could be used to improve business infrastructures. HP updated its infrastructure software OpenView with a self-fixing technology. It also reshaped its ProLiant blade servers so that more server hardware could be stacked on shelves. The new design freed up computer storage space for businesses and reduced the energy needed to keep the servers cool.

MARKETING STRATEGY

The "Gizmo" campaign first surfaced on October 29, 2002, with a series of teaser commercials and print ads that hinted at the existence of Bagotronics, a fictional company created for the campaign. IBM was not identified as the advertising source until later. The campaign would extend into 2003 and include nine television spots, several online ads, and print ads with the "Gizmo" theme. Ogilvy & Mather even created a Bagotronics website.

NICE FACADE. BAD INFRASTRUCTURE.

IBM released a television commercial in 2001 that touted the company's superior infrastructure technology. One spot featured the Leaning Tower of Pisa and copy that read, "Nice facade. Bad infrastructure." As two people attempted to photograph the structure in the commercial, the tower collapsed. The spot ended with the copy "Infrastructure: Sooner or later, it matters." IBM stopped airing the commercial immediately after the terrorist attacks of September 11, 2001, in which the two World Trade Center towers in New York were destroyed.

The campaign's commercials spoofed business problems such as underbudgeted projects, network problems, and missed deadlines. In each spot the Bagotronics executives invited an IT representative to pitch the latest gizmo in the company's boardroom. The spot "Time Machine," for instance, began with the Bagotronics CEO studying a glass contraption filled with twirling parts. When he asked his IT representative what the gizmo was, the IT rep replied, "It's a business time machine." He then proceeded to explain that Bagotronics could use the machine to amend past business mistakes. The executives appeared delighted with the contraption. When a female executive asked about the company's "dead-end consulting project," the IT employee smugly insisted that the time machine would make sure the project "never happened." After a few more questions and answers, the IT employee warned that the time machine was just a prototype and therefore dangerous. Pointing to an executive on his right, the CEO said, "Phil, you go first." The spot then flashed through several screens displaying the copy "THERE IS NO BUSINESS TIME MACHINE" and "YOU SHOULD CALL IBM FIRST." The spot ended with the campaign tagline, "e-business on demand," and a final image of the IBM logo.

In promoting IBM's e-business solutions Ogilvy & Mather faced the challenge of making infrastructure technology appear interesting to the campaign's target market. "How do you get people engaged in something they may not be interested in to begin with?" Chris Wall, Ogilvy & Mather senior partner, asked in B to B. The agency resorted to humorous situations with which c-level executives and IT personnel could readily identify. "There was a time when [business-to-business advertising] was thought of as very serious and austere," Wall continued. "Now, business has become like sports, where people follow businesses and stocks like they follow sports scores. That is a pretty big shift. You find us talking about business in a more entertaining way."

Further television spots showed the same Bagotronics executives considering the use of magic server pixie dust, magic business binoculars, and a magic elixir that could offer powers of omniscience. Print ads displayed similar gizmos. The print's copy explained that, unlike magic elixirs and pixie dust, IBM offered a reality-based solution to e-business problems.

OUTCOME

Advertising critics deemed "Gizmo" a quantifiable success. Four days after the campaign was released, the Bagotronics.com website recorded 17,131 unique visitors. IBM's connection to Bagotronics was explained in the "read our ad" section of the website, which was viewed more than 41,000 times. According to B to B, ad awareness for IBM was 20 percent greater during the campaign's first three months than during the three months before the campaign. As "Gizmo" continued into 2003, IBM's business skyrocketed. The company's reported income was 30 percent greater during the first nine months of 2003 than during the first nine months of 2002. The New York American Marketing Association awarded "Gizmo" a prestigious Silver EFFIE in the Corporate Reputation/Image/Identity category in 2004.

Chris Wall stated that one of the achievements of the "Gizmo" campaign was illustrating IBM's ability to deliver on the promises made by less-experienced companies during the 1990s. "We had the go-go years of the dot-com era, then we kind of had a hangover after the crash, and now we have an in-between stage," Wall explained to B to B. "[The possibilities] talked about in the late '90s [are] starting to happen, but the companies that are doing it are companies you know and trust, not 20-year-old kids."

FURTHER READING

Allossery, Patrick. "Big Blue Playing to Win: IBM Canada Targets Mid-sized Companies in New, More-spirited E-business Campaign." National Post (Don Mills, Ontario), May 13, 2002, p. FP8.

Bernstein, Roberta. "2003 Ad Agency of the Year." MC Technology Marketing Intelligence, May 1, 2004, p. 24.

Booker, Ellis. "Finding the Funny in B-to-B Ads." B to B, July 11, 2005, p. 10.

Cuneo, Alice Z. "IBM Puts Push behind Linux; Sees It as Tool to Fight Microsoft." Advertising Age, September 8, 2003, p. 89.

D'Innocenzo, Lisa. "Beating Brand Fatigue." Strategy, November 17, 2003, p. 1.

Kaplan, David. "Into the Blue." Adweek (eastern ed.), July 8, 2002, p. 12.

Kohnstamm, Abby. "Special Report: Power Players." Advertising Age, October 4, 2004, p. P14.

Lippert, Barbara. "IBM's Nightmares on Wall Street." Adweek, May 5, 2003, p. 26.

Maddox, Kate. "Creative." B to B, June 13, 2005, p. 37.

――――――. "IBM, Ogilvy Celebrate 10 Years." B to B, June 7, 2004, p. 1.

――――――. "IBM's Strategy Keeps It In and On Demand." B to B, October 25, 2004, p. 24.

McArthur, Keith. "IBM Launches New Campaign." Globe and Mail (Toronto), May 24, 2004, p. B12.

Silverman, Gary. "IBM Deletes Its 'e' on Demand." Financial Times (London), May 20, 2004, p. 20.

                                            Kevin Teague

LINUX CAMPAIGN

OVERVIEW

The world's largest computer company, International Business Machines Corporation (IBM), was one of the first large computer companies to sell its mainframe servers with an operating system called Linux. Linux was developed in 1991 by a software developer searching for a free alternative to the costly operating system called Unix. Unlike Unix and operating systems such as Microsoft Corporation's Windows, Linux was free, or "open-source," and available without patent or copyright protections. To cut down on software costs, IBM shipped 15 percent of its servers with the free Linux operating system in 2002. To increase consumer faith in Linux and wean more of IBM's customers off of Unix and Microsoft operating systems, IBM released its "Linux" campaign.

Ogilvy & Mather Worldwide drew upon IBM's $600 million annual advertising budget to create the campaign. The first "Linux" spot, a 90-second commercial titled "Prodigy," began airing on September 5, 2003. It featured an alert 10-year-old boy who sat inside a stark, brightly lit room. The boy, whom Ogilvy & Mather used to represent a computer operating with Linux, listened attentively to lessons given by individuals such as the academician Henry Louis Gates, the director Penny Marshall, a plumber, an airline pilot, and the boxing champion Muhammad Ali. Similar television spots ensued, including a 30-second, $2.3 million Super Bowl commercial in 2004. The campaign included print ads, postcards, E-mail, and Web banners. Using the word "open" to emphasize Linux's open-source use, the campaign used the tagline "LINUX. THE FUTURE IS OPEN. IBM."

"Linux" earned a Bronze EFFIE Award in 2005 within the Computer Software category. For the first half of 2004 IBM posted $45.4 billion in global revenues, which surpassed IBM's revenues during the same period a year before by nearly 9 percent. Ad critics praised the campaign for blending elegance with simplicity. The ad critic Barbara Lippert wrote in Adweek that the serious tone of the campaign's 2004 Super Bowl spot set IBM apart from the clutter of humorous spots vying for attention.

HISTORICAL CONTEXT

Created by the Finnish student Linus Torvalds in 1991, Linux became a popular nonproprietary operating system that could be used in lieu of more expensive products such as Microsoft's Windows and Sun Microsystems' Unix. Not usually installed in personal computers, Linux was instead used in servers, which were the large computers powering networks. IBM wanted to sell more servers with Linux in order to reduce its reliance on expensive operating systems. "IBM has seen that Linux opens doors … it takes expenses away from IBM, it makes life simpler because the software helps unify IBM's diverse products," Dan Kusnetzky, vice president of systems software research at the technology market research firm International Data Corp., said to Reuters News. "IBM sees that by making the Linux market bigger, IBM's slice of that market will be bigger," he explained.

According to Reuters News, IBM was responsible for a 2001 guerrilla marketing campaign called "Peace, Love, and Linux," in which Linux's penguin logo was spray painted, along with a heart and a peace symbol, on the sidewalks of San Francisco, New York, and Chicago. In 2002 IBM stated that 6,000 of its business customers were using Linux and that 15 percent of IBM servers were shipped with the free operating system. IBM was not the only computer company taking advantage of Linux. International Data Corp. reported that, during the first quarter of 2003, Hewlett-Packard shipped 29.4 percent of its servers with Linux, and Dell shipped 22.1 percent.

"Linux" was IBM's first large advertising campaign to focus on Linux. Executives at IBM wanted to use IBM's brand equity to persuade information technology (IT) employees and c-level (e.g., chief executive officer, chief technology officer) executives to rely on Linux. Speaking with Reuters News in 2003, Lisa Baird, head of global advertising at IBM, stated that awareness of Linux had reached "a tipping point" and that the campaign was meant to encourage interest in the operating system. "We are only one of many companies committed to it," she said. "We are certainly doing everything to increase the momentum of that interest."

TARGET MARKET

"Linux" television spots reached a mass audience by airing across popular sports programming, including the 2004 Super Bowl. With the campaign IBM hoped to foster trust among consumers in general, but it was more specifically aimed at technology decision makers. Marketing analysts explained that, even though IT employees and c-level executives watched less television than the general population, they still watched broadcasts of high-profile sporting events such as the Super Bowl. To resonate with the broader audience that may not have understood the intricacies of Linux, the campaign used little technical information. Instead the commercials employed a highly emotional content backed by A-list celebrities and IBM branding.

DIGITAL FOOTBALL

In 2003 the National Football League (NFL) designated IBM as its official technology partner. In return for the NFL's endorsement, IBM began converting 80 years of football film footage into a digital format that could be accessed instantaneously by the public. The NFL hoped that its new digital archive would cut costs and make the league more efficient.

Speaking to Computerworld, Christopher Williams, a strategist at the marketing firm Idea Engineering, described the three groups most affected by the 2004 "Linux" Super Bowl spot: "In reaching the mainstream, [IBM is] reaching the IT decision-makers, the company's stakeholders, and the IBM shareholders." The latter two, stakeholders and shareholders, may not have understood the difference between Unix and Linux, but the campaign suggested that IBM was making the right decision by choosing Linux. The spot used endorsements by celebrities such as boxer Muhammad Ali to establish Linux "as a good business decision for you and your bosses," said Williams.

Some IBM stakeholders feared that, by using an operating system without an entity responsible for its production, no one could be held accountable for failure. "Users still have concerns about the viability of Linux vendors over time," Dan Kusnetzky of International Data Corp. said to the San Jose Mercury News. "They have concerns about staff expertise for administering Linux, and they worry there is no one throat to choke because it's developed by a community of developers."

COMPETITION

In January 2004 Microsoft, the world's largest software company, launched a global advertising campaign that claimed that its Windows Server 2003 was 10 times cheaper to use than Linux. The campaign, titled "Get the Facts," was based on findings unearthed by independent market-research firms such as Giga Research and Meta Group. In addition to print ads, the campaign included an updated section on Microsoft's website; titled "Get the Facts on Windows and Linux," it allowed visitors to download the comparison results between the two operating systems. One magazine ad began with the headline "Weighing the cost of Linux vs. Windows? Let's review the facts." Even though Linux was free, explained the ad, the installation, development, and service of Linux would make it a more expensive alternative to Windows Server 2003.

"As Linux became more mainstream, as Linux became more commercial, as IT professionals wanted to make more pragmatic decisions on it, they needed a set of data to help them sort through their decisions," Martin Taylor, Microsoft's general manager of platform strategies and its lead media contact for Linux issues, said to the Seattle Post-Intelligencer. Taylor explained that the campaign was merely an effort to collect and organize outside information that discredited Linux.

Some advertising critics lambasted the campaign for using research that claimed to be "independent" even though it was financed by Microsoft. In August 2004 the Advertising Standards Authority (ASA), a U.K. advertising watchdog, concluded that the "Get the Facts" campaign was flawed. According to the ASA, Meta Group used more expensive hardware to operate Linux for the price comparison between Windows Server 2003 and Linux. The unnecessary expense tipped the results in Microsoft's favor.

MARKETING STRATEGY

During the first week of September 2003 IBM released "Linux" print ads, postcards, E-mails, and Web banners with the tagline "LINUX. THE FUTURE IS OPEN. IBM." The campaign was IBM's first bold statement of support for Linux. On September 7 the campaign's first TV commercial, a 90-second spot titled "Prodigy," broke during the opening games of the National Football League. The spot also appeared on CBS during the men's finals of the US Open tennis tournament.

MUHAMMAD ALI

Although he was a highly public figure during the 1960s and 1970s, the retired heavyweight boxer Muhammad Ali began a slow retreat from public appearances after being diagnosed with pugilistic Parkinson's syndrome in 1984. Much to the advertising world's surprise, the boxer appeared in three commercials during the 2004 Super Bowl: IBM's "Linux" commercial, Global Gillette's "Gillette" commercial, and a "Choose to Vote" public service announcement. Ali's wife, Lonnie, explained to Women's Wear Daily that her husband was using the advertisements to reassure the public that he was alive and active. The boxer was opening a museum that promoted the legacy of Muhammad Ali the following year.

"Prodigy" featured a 10-year-old boy sitting inside an all-white room that New York Times ad critic Nat Ives described as reminiscent of the movie 2001: A Space Odyssey. The commercial began with a male voice and a female voice discussing the boy, who was sitting quietly on a white plastic chair. The male voice-over stated, "I think you should see this." The female replied, "It's just a kid." For the remainder of the spot, the boy sat silently as professionals from various disciplines explained subjects such as problem solving, plumbing, Latin, guitar, astronomy, and history. The boy's focused expression suggested that he comprehended the information as quickly as it was disseminated. After the boxer Muhammad Ali told the boy, "Speak your mind, don't back down," the two off-camera voices from the spot's beginning finished their conversation. "Does he have a name?" the woman asked. "His name is Linux," the man answered. The spot ended with the tagline "LINUX. THE FUTURE IS OPEN. IBM." Ogilvy & Mather used the word "open" to remark on Linux's open-source software, which allowed the public to use it for little or no fee.

Further spots with the same 10-year-old boy continued into 2004. The 30-second spot titled "Muhammad Ali," which cost an estimated $2.25 million, aired during the 2004 Super Bowl. It featured the boy watching television footage of the world heavyweight champion Muhammad Ali winning a boxing match. After the match Ali shouted, "I shook up the world!" The television set disappeared. Then the more recent 62-year-old Ali appeared to encourage the boy to "Shake things up. Shake up the world." Ali, famous for his unorthodox boxing style and his spectacular results, was considered to be an ideal endorsement for Linux. John Lucy, a spokesman for IBM, told the Herald-Sun, "Linux is the underdog, as Ali was. Both developed a global cult following by taking on the big boys and proving they were ultimately the most powerful and popular contenders."

Super Bowl ad critics praised the dignified nature of the "Muhammad Ali" commercial. While so many other brands used humor during the game, "Muhammad Ali" stood apart with its inspirational message. "The way you differentiate yourself is to have a different tone, a different creative feel in the midst of the guffaws," Deirdre Bigley, vice president of advertising at IBM, explained to Reuters News. "I think we are going to grab attention by being more elegant."

OUTCOME

The "Linux" campaign did not score well in some audience polls. One survey, conducted in Canton, Ohio, which was the location of the Pro Football Hall of Fame, rated "Muhammad Ali" as the fifth-worst commercial aired during the 2004 Super Bowl. The campaign garnered more praise from ad critics, many of whom admired the campaign's creative strategy and classy execution. Praising the Super Bowl spot "Muhammad Ali," Adweek advertising critic Barbara Lippert explained on CBS News: The Early Show, "I liked the Linux one…. I thought it looked great. It was startling. It changed the tone."

The commercial "Prodigy" earned the campaign a Bronze EFFIE in 2005 in the ceremony's Computer Software category. Aside from ad-industry success, the campaign was also credited with boosting IBM's profit. During the first half of 2004 IBM posted $45.4 billion in global revenues, which surpassed IBM's revenues during the same period a year before by nearly 9 percent.

The campaign's failure to impress the broader Super Bowl audience was attributed by some critics to the general confusion about Linux. Audience polls, including USA Today's Ad Track survey, showed a general dislike of the campaign. Some advertising critics believed that, if given enough time, audiences would embrace the "Linux" campaign. For instance, Paul Cappelli, president of the ad agency the Ad Store, wrote in Shoot, "I'm aware [that the Muhammad Ali spot] didn't score all that well with USA Today, but the exposure on the game will help that ad. As it airs some more, I think you'll see it climb in its effectiveness."

FURTHER READING

Allossery, Patrick. "Big Blue Playing to Win: IBM Canada Targets Mid-sized Companies in New, More-spirited E-business Campaign." National Post (Don Mills, Ontario), May 13, 2002, p. FP8.

Bernstein, Roberta. "2003 Ad Agency of the Year." MC Technology Marketing Intelligence, May 1, 2004, p. 24.

Booker, Ellis. "Finding the Funny in B-To-B Ads." B to B, July 11, 2005, p. 10.

Cuneo, Alice Z. "IBM Puts Push behind Linux; Sees It as Tool to Fight Microsoft." Advertising Age, September 8, 2003, p. 89.

D'Innocenzo, Lisa. "Beating Brand Fatigue." Strategy, November 17, 2003, p. 1.

Kaplan, David. "Into the Blue." Adweek (eastern ed.), July 8, 2002, p. 12.

Kohnstamm, Abby. "Special Report: Power Players." Advertising Age, October 4, 2004, p. P14.

Lippert, Barbara. "IBM's Nightmares on Wall Street." Adweek, May 5, 2003, p. 26.

Maddox, Kate. "Creative." B to B, June 13, 2005, p. 37.

――――――. "IBM, Ogilvy Celebrate 10 Years." B to B, June 7, 2004, p. 1.

――――――. "IBM's Strategy Keeps It In and On Demand." B to B, October 25, 2004, p. 24.

McArthur, Keith. "IBM Launches New Campaign." Globe and Mail (Toronto), May 24, 2004, p. B12.

Silverman, Gary. "IBM Deletes Its 'E' On Demand." Financial Times, May 20, 2004, p. 20.

                                            Kevin Teague

SOLUTIONS FOR A SMALL PLANET CAMPAIGN

OVERVIEW

International Business Machines (IBM) Corporation was undeniably a powerful and influential presence during the early days of the computer boom. In the 1970s and early 1980s IBM dominated the computer market. The company was largely responsible for the success of the personal computer industry, and major corporations and the federal government relied on its mainframe systems. IBM's profits reached $6.6 billion in 1984, and the company's stock reached an all-time high in August 1987. Increased competition led to a drop in profitability, however, and by the 1990s Big Blue, as the company was known, had lost its omnipresence.

A revitalization effort began in 1993 with the hiring of a new CEO. The advent of the Internet also boosted IBM's prospects. The company hoped to become a major contender in electronic commerce by combining its longstanding strength in network computing and research with the global capabilities of the Internet. To accomplish these goals, IBM needed to present a more user-friendly image while leveraging its powerful brand name. IBM's "Solutions for a Small Planet," which debuted in early 1995 with a budget of $100 million, was a brand-building campaign designed to reveal the company's global reach. To emphasize the company's universal relevance, the print and television ads depicted people throughout the world using various IBM products in their everyday lives.

The "Solutions for a Small Planet" campaign continued through 1998 and included more than 25 television spots. The campaign, initially launched in the United States, soon made its way to Canada, Latin America, Europe, the Middle East, Africa, Asia, and elsewhere. At the commencement of the worldwide campaign, IBM's Scott Brooks told USA Today, "This campaign will be seen by millions of people in over four continents…. It was designed to reflect IBM's universal appeal all over the world."

HISTORICAL CONTEXT

IBM had a number of problems when Louis V. Gerstner, Jr., became CEO in April 1993. The company had lost $16 billion between 1991 and 1993, and its stock plunged to a low of $40 in 1993. (The high, which was reached in 1987, had been $175.) In seven years the company, long known for its no-layoff policy, had undergone five major restructurings and cut its workforce by half. Plans to split IBM into smaller divisions were in the works, which distracted the company and blurred its focus. IBM's two mainstays, mainframe computer systems and personal computers, lost market share in the early 1990s as well. Mainframes seemed destined for obsolescence, and small, aggressive upstarts entered the personal computer market and gobbled up profits. These young companies sped past the large and unwieldy IBM in terms of product development and introduced new systems to the public while IBM fumbled. In 1992 computer consultant Ulric Weil told Time magazine, "IBM is no longer the monolithic monster that strikes fear in the hearts of competitors…. It has proved to be quite mortal after all." No one seemed to possess much confidence that IBM could recover, not even Gerstner. He had not been thrilled with the offer to head the flailing IBM, and he told Fortune, "It just looked like it was going into a death spiral. I wasn't convinced it was solvable."

When Gerstner took the reins, he slashed jobs, decided against dividing the company, and chose not to give up on mainframes. He also shifted the focus to support services and systems and acquired software companies in order to compete with Microsoft. In an unprecedented move, in 1994 Gerstner severed ties with IBM's 40 advertising agencies and consolidated all advertising, an estimated $400 to $500 million in global spending, at one agency—Ogilvy & Mather. A worldwide agency, Ogilvy & Mather had branch offices in 59 countries at the time. Gerstner hoped to present a unified brand image in its global advertising, and it was thought that a single agency would be best equipped to deal with such a task.

Ogilvy & Mather's first major effort as IBM's sole advertising agency was the "Solutions for a Small Planet" campaign, which began on New Year's Day in 1995. IBM needed the brand-enhancing campaign to be successful if it were to regain its reputation as a technological leader. Marketing consultant Al Ries told USA Today that the campaign was "the make-it or break-it campaign" and that "if this flops, IBM's reputation with consumers will suffer." Forrester Research's Bill Bluestein agreed and said that IBM "has been surpassed by Microsoft, even Intel, as a technological powerhouse, and this kind of an ad effort could help change people's minds about IBM."

TARGET MARET

According to a USA Today interview with an IBM marketing executive in 1995, the "Solutions for a Small Planet" campaign initially targeted "affluent, well-educated, mostly male consumers." This group represented those most likely to have had prior experience with and knowledge of IBM and its products. IBM purchased commercial ad time on sports- and news-related shows to reach these consumers, and USA Today's Ad Track, a poll designed to measure a campaign's popularity and effectiveness, found that the strategy had worked. When Ad Track surveyed 1,255 adults, it discovered that more than one-third had not seen any of IBM's spots. Those who had seen the commercials, however, were predominantly members of IBM's target audience. While approximately one-third of the women polled had seen the ads, more than one-half of the men had viewed them. In terms of popularity, the high-income viewer earning more than $50,000 a year liked the spots more than those who made less than $7,500 a year.

While IBM may have hoped to capture the attention of the high-income consumer at the beginning of the "Solutions for a Small Planet" campaign, it then adopted a more egalitarian approach by placing the spots on national network television during prime time. And because the reach of computers was growing at an exponential rate throughout the 1990s, so was IBM's target market. Although the spots featured foreign languages and countries, they showed common people discussing technological issues in an everyday manner, sending the message that technology affected everyone. For instance, one of the spots showed a group of Czechoslovakian nuns discussing the Internet and IBM's OS/2 Warp. One nun said, "I'm dying to surf the 'net," and another was beeped on her pager. Another spot was set in Marrakech, Morocco, with one man confessing in Arabic, "Hey, I'm no wirehead," something that many in the United States could understand. The idea was to show empathy for those who felt that technology was passing by them and to suggest that IBM could be the company to provide the solution.

COMPETITION

There was a time when IBM ruled the computer industry and had no direct competition. A 1992 Star Tribune article stated, "So tight was IBM's market grip that it was practically impossible for any computer company to do business without being tied in some way to the Big Blue colossus." IBM's glory days passed in the late 1980s and early 1990s, however, as the high-tech industry blossomed and new competitors arose. IBM chose to stand by its cash cow—mainframes—but, unfortunately for IBM, sales declined as more users opted for personal computers. IBM was slow to enter the personal computer market, and competitors such as Apple, Compaq, and Packard Bell had a healthy head start. Time noted that IBM's PC business ailed in 1992, with revenues and market share dropping.

After Gerstner joined IBM, profits began to pick up, and IBM's future did not appear as grim. According to Dataquest, IBM ranked third in the U.S. computer market in 1996, with a market share of 8.7 percent. Compaq led the group with 13.3 percent of the market, followed by Packard Bell-NEC with 11.6 percent. After IBM came Dell, with 6.9 percent, and then Apple, with 6.7 percent. According to Dataquest, IBM also placed third in the home PC market for 1996, with 8.1 percent. Packard Bell ranked first, with a 27.3 percent share, and Compaq came in second, with 12.2 percent. Gateway, Apple, and Acer, respectively, followed IBM.

IBM also provided Microsoft with competition in software. After IBM acquired Lotus Development in 1995, U.S. News & World Report indicated that the two company's software businesses were comparable in size, with IBM's growing successfully. IBM's personal computers were preloaded with Lotus software, which significantly increased the chances that those using the 624,000 IBM PCs sold in 1996 would use Lotus rather than Microsoft.

DOES ANYONE GET IT?

One of the spots in the "Solutions for a Small Planet" campaign featured the fictitious rock band Spinal Tap. The commercial was shown during the 1996 Summer Olympic Games and was intended to be funny. Unfortunately for IBM, many viewers were unfamiliar with the 1984 faux documentary This Is Spinal Tap, in which the band originated and which parodied heavy metal rock and band tours. In the IBM spot the musicians' dialogue was subtitled, which kept with the "Solutions for a Small Planet" strategy, for the loud music drowned out the voices. The band members discussed the launch of a comeback tour and surmised that, if IBM could help manage the Olympics, the company could certainly handle the logistics of its tour. The spot was supposed to surprise and engage viewers and dispel IBM's uptight image, but viewers were at most surprised.

Although IBM had gotten back in the game, the company still faced fierce competition. The Wall Street Journal noted that revenue in 1997 had increased 40 percent from 1987 and that nearly two-thirds of the company's revenue was attributed to personal computers and services. (In 1992 only about 40 percent of IBM's revenue had come from PCs.) Although these statistics seemed impressive, profits had gone up only 3.2 percent during the decade. According to the Wall Street Journal, "That means IBM labored mightily to add more than $20 billion in yearly revenue—all to produce less than a penny of profit on each extra dollar." While IBM's revenue went up 5.6 percent in 1996, Hewlett-Packard's increased 19 percent and Intel's rose 29 percent. In other words, "IBM added $4 billion in new revenue last year [1996], but Hewlett-Packard, half IBM's size, added $6.9 billion; and Intel, one-third as big as IBM, tacked on $4.6 billion."

MARKETING STRATEGY

The aim of the "Solutions for a Small Planet" campaign was to demonstrate IBM's global reach while giving the company a friendly, unintimidating image. The spots were filmed in the languages of the countries depicted and carried subtitles. While the ads were shown worldwide, none was televised in the country of its native language. Using foreign languages was intended to draw in viewers and hold their interest. Ogilvy & Mather's Matt Ross told Newsday that using a foreign tongue "draws people in and causes them to become a lot more involved in the spots…. It's hard not to pay closer attention when a foreign language comes on." The spots showed common people discussing IBM, computers, and technology to illustrate the company's universal reach. Greek fishermen, Argentine tango dancers, Italian farmers, and Irish shepherds were among those featured.

IBM increased advertising spending significantly to ensure that the campaign would reach as many viewers as possible, with Business Marketing reporting that its broadcast spending increased by 866 percent in 1995. The campaign continued through 1997 and into 1998 and included several Olympic-themed spots to inform viewers of IBM's Olympic sponsorship. IBM also invested in other advertising campaigns and, as the "Solutions for a Small Planet" campaign aged, gradually placed less emphasis on its spots. Many of IBM's ads, whether or not they were part of the campaign, shared the tag line "IBM. Solutions for a Small Planet."

Several ads appeared on U.S. network television during 1997. Some were humorous and all depicted interesting scenarios. The "Fashion Models" spot featured two Scandinavian models walking down a runway during a fashion show. They conversed in Swedish about IBM's "data mining" services, with English subtitles to guide U.S. viewers. One of the models asked the other how her line of knee socks was selling, and the second responded that business had improved since she contacted IBM. She explained, "See, IBM's got a fab way of looking at data and coming up with zillions of ideas you'd just never think of. It's called 'data mining.'" The first model then replied, "Data mining? Sounds like the edge I need for my chain of Tire and Auto Centers." The spot introduced an IBM service and solution in an alluring and unexpected manner.

Another ad, "Japanese Surgeons," took place in an operating room and featured two Japanese surgeons, one male and one female. As they prepared to perform surgery, they discussed in Japanese their personal computers. The patient, still conscious, laid on the operating table listening. The female surgeon asked the male how his children were enjoying their new computer. The male surgeon responded, "It's not up and running yet. You know me. All thumbs." The patient's eyes widened at this remark. The female surgeon then said that her family loved their IBM Aptiva: "It's got CD-ROM … lots of software … It's ready to go right out of the box." The male then asked if the computer was difficult to set up, to which the female surgeon replied, "It's not brain surgery." The spot ended with a shot of the patient's alarmed and surprised face and the tag line. The intent of the spot was to introduce IBM's line of Aptiva home computers in an engaging and humorous manner.

IBM's campaign attempted to cover a large number of IBM products and services in many foreign countries. A Hungarian organ grinder showed interest in an IBM ThinkPad laptop computer, and Tibetan monks discussed the advantages of Lotus Notes. Singers in South Africa discovered children's software, actresses in a Chinese opera house discussed the benefits of IBM's technical support for PC owners, and a water taxi driver in Bangkok told a businessman passenger about IBM's consulting services. Every spot showed how IBM affected individuals in varying professions and of varying ages spanning the globe and how IBM offered solutions for all of them.

OUTCOME

The "Solutions for a Small Planet" campaign lasted through 1998, although IBM supported various other advertising endeavors during the duration of the campaign. The other campaigns complemented the "Solutions for a Small Planet" ads, placing heavier emphasis on specific products and services rather than promoting only the IBM brand. "Nuns" and "French Guys," both early spots, won Clio Awards for 1995, and "Ships," developed by Ogilvy & Mather's Paris branch and televised during the 1998 Winter Olympic Games, won an award at the 1997 Cannes International Advertising Festival.

IBM had progressed considerably since its near death days of the early 1990s. According to U.S. News & World Report, IBM's record-setting 1997 revenues of $78.5 billion provided a clear indication that the company had been resurrected. Because of economic downturns in foreign markets, however, IBM saw profits fall in early 1998. Nonetheless, the declining revenues had been expected, and others in the computer industry were affected as well. IBM became a contender in an industry in which the company had been written off, but as IBM's chief financial officer, G. Richard Thoman, told the Wall Street Journal, "We've done a lot, but we still have a lot to do."

FURTHER READING

Enrico, Dottie. "IBM Launches 'Small Planet' Ads to Boost Image." USA Today, December 30, 1994.

――――――. "IBM's Subtle 'Solutions' Target Affluent Men." USA Today, May 22, 1995.

Garfield, Bob. "Spinal Tap Drops Torch in IBM Effort." Advertising Age, May 27, 1996.

"International Flavor: Advertisers Sprinkle in a Little Foreign Language." Newsday, January 29, 1995, p. E5.

                                            Mariko Fujinaka

NEARBY TERMS

International Business Machines Corp.