HP's Michael Mendenhall: No "Course Correction" Planned Despite the Recession

This afternoon I sat down with Michael Mendenhall, who took over as CMO of HP last October after running marketing for Walt Disney Parks and Resorts. We talked about HP’s NBA and MySpace sponsorships, his thoughts on digital marketing, and he also told me HP doesn’t plan to change its marketing plans in the face of the downturn. Edited excerpts follow, with my questions in bold.

You’ve recently announced marketing partnerships with MySpace and the NBA – why do these now?

On MySpace, most people look at these social networks as fundamentally being supported by ad revenue, but that’s not the complete story when you look at business model. Isn’t there also a piece to this that’s commerce driven? As you create content, how do you take that content and bring that into a physical world? That, in a sense, is the partnership. Somebody’s built a collage on MySpace, you can print it on multiple pieces of material, on demand -- we’re bringing MySpace into the physical world.

The NBA is growing basketball into a global sport, and their demographics really line up with our global expansion. This won’t be a traditional sports marketing sponsorship – we’ll be looking at ways technology can improve the experience, the experience in coaching, online for fans -- it's how do we take that and use technology to create a better more interactive user experience with in basketball.

Times are tight. Are you increasing the marketing budget to pay for this stuff? Reallocating money from other areas?

We go opportunity by opportunity. If we find organizations like MySpace, and the NBA that are willing to engage in a partnership that are better than just a marketing relationship, then we’ll invest.

How are you responding to the economic downturn? Are there any aspects of your marketing that you're changing or enhancing?

No, I don’t think we’ve done any kind of course correction. We are very committed to the digital environment and the digital space, we continue to invest in digital channels and we have for years migrated into the digital space. We haven’t changed anything.

How are you marketing online, then?

50% of HP’s marketing budget is in the digital space. It’s important for a company to understand the whole digital landscape, not just the web. And digital should become more of an operational strategy for a company rather than just marketing. For instance, we use it to aid with R&D with something we call IdeaLab. In customer service, we think it becomes very important, too. Some of our best customers are actually becoming a piece of the customer service, because they [participate on the forums] and help others. As marketers pull back on advertising spending overall, which media outlets will hold onto the money, and who will lose out? The differentiator will be how [publishers] manage their information – information on their customers, on their customers’ interests, and so on. I think it’s about return on information.

For example the big portals all have the ability to recognize users as individuals, and they should have the capability to understand who that person is. Understanding that, and being able to contextually target that person in a relevant way, becomes more powerful, certainly we’ve seen becomes a better growth generator.