The PC maker has got new ads with a snappier tagline, but to regain market share it will need to deliver more than spots that mimic those of its hippest competitor
Mark Jarvis would have you believe Dell is undergoing a marketing revolution. "We'll be seeing radical change at Dell over the next two years," insists Jarvis, the company's recently appointed marketing chief.
Jarvis, hired less than three months ago, may be overstating the case. But his remarks reflect Dell's recognition that a big marketing makeover is in order, and Jarvis has already begun making notable changes. Case in point: On July 12 Dell (DELL) kicks off an ad campaign more colorful and edgy than any it's used in the past.
Overhauling a Brand Identity
The marketing revamp is one of many moves Dell is undertaking in its attempt to regain market share and revive sales. The Round Rock (Tex.) company has struggled since mid-2005, when it began losing ground to competitors, especially in laptops and machines aimed at consumers—a slump reflected in slowing sales and disappointing results (see BusinessWeek.com, 6/1/07, "Dell's Road to Recovery"). Late last year, Dell lost its top ranking in market share to Hewlett-Packard (HPQ), according to researcher IDC (IDC). In 2007, Dell's executive suite has almost completely turned over as the company has hired new blood, including former Motorola (MOT) executive Ron Garriques.
Job one for Jarvis is to re-envision an advertising message that traditionally has stressed either a PC's price or its main features, including computing speeds and memory capacity—the machine's so-called speeds and feeds. Such ads helped Dell goose sales in the past, but they've lost their effectiveness in recent years as consumers started to focus on design and other aspects of buying and owning a computer. A year ago, Dell took a small step away from its traditional style with a campaign that featured the tagline "Purely You." Although the ads referred to recreational activities that consumers perform on their computer, such as playing video games, the ads still primarily stuck with shots of the hardware itself.
Those ads missed the mark, says Jarvis, and one of his first moves was to pull the plug on "Purely You." "Customers are focusing on cool," he says. "Consumers are increasingly conscious of the brand itself," he adds. "People say, 'I'm an Apple (AAPL) person, I'm an HP person, I'm a Dell person.' We're reflected in the brand we use."
Imagining the "Dell Person"
Hence the flurry of ads that goes live July 12, drawing heavily on color, music, and images suggesting fun and whimsy. The ads, which use the tagline, "Yours Is Here," publicize Dell's recently launched line of Inspiron computers, which are available in bright colors designed to boost their fashion quotient (see BusinessWeek.com, 6/26/07, "Dell: Color It Competitive?"). In a television spot, a man stares down a bright-green boa constrictor the same color as his Dell laptop. Another suns himself as he uses a pink laptop that matches the color of the bikinis worn by his female companions. "You see a different consumer face of Dell," says Jarvis. "It brings an emotional link. If we use color and the fun factor, it offers a whole different value proposition."
Print versions are appearing on venues including buses, subway posters, and taxi tops, which Dell hasn't used previously. The campaign is expected to last about a year, Jarvis says.
Some observers skeptically note that Dell's new marketing, while colorful, has a me-too feel that merely mimics strategies of competitors, particularly Apple's. And no matter how eye-catching Dell's new marketing is, its products, service, and technical support have to measure up. "Ad campaigns and spin are one side of the coin," says Richard Dean, director of research at Dallas-based research firm Lucintel. "The other side is, can Dell deliver the promises of quality, ease of use, productivity?"
Going Beyond the Hype
Another tall order for Jarvis is to sharpen marketing for Dell's other businesses. To that end, ads for Dell's new Vostro line of PCs and services, launched on July 10, takes pains to spell out the notion that Vostro was created specifically for small businesses. The Web site for the Vostro brand prominently says, "Small business deserves computers designed just for small business." Dell's previous small-business marketing didn't make such a strong distinction. Partly as a result, Jarvis says, many small-business customers have been unable to distinguish between Dell's small-business machines and high-end consumer ones.
Jarvis wouldn't say how much Dell is spending on the current campaigns. In 2006, Dell spent a total of $730.9 million on ad time and space, down about 6.5% from 2005, according to ad-tracking service TNS Media Intelligence. Dell's total revenue in 2006 was about $57 billion, representing only a small increase from the prior year.
Jarvis' embrace of color and fun in ads may lend a hand to get sales growth moving again, but sustained recovery will require strong products and services that speak for themselves, whatever the marketing buzz surrounding them.