How IBM's Smarter Planet Strategy Came to Be

Posted by: Steve Hamm on September 18

For the past 10-15 years, the corporate computing industry has been making a radical shift from selling computers and software to selling “solutions” that address the customers’ problems or open up new opportunities. IBM’s Smarter Planet marketing initiative, which tracks closely with (in my view) the most interesting part of its corporate strategy, is the ultimate expression of the trend away from marketing products to marketing solutions. In essence, IBM is offering to solve some of the world’s most significant problems (excepting war and poverty and a few other biggies). Its list includes improving health care, environmental protection, energy consumption, and education.

I pride myself in not being susceptible to conventional advertising and marketing, but when IBM launched its “Smarter Planet” print and TV ad campaign last fall, I was smitten. How can you not be in favor of a smarter planet and a company that’s helping to improve the world’s IQ? I think that the reason the campaign has resonated with me is that it’s not tacked on. It emerged out of things the company was already doing, and the campaign did the work of distilling those efforts down to their essence and presenting that essence in a powerful way. In other words, the campaign was authentic. (For the record, I hated IBM’s series of innovation-focused ads it had been running earlier. Supposed to be funny but not funny.)

This week, BusinessWeek published its annual Best Global Brands list, and IBM again came in at No. 2 behind Coca-Cola. It gained a smidgen of value, according to Interbrands, which did the evaluation, while the next companies on the list, Microsoft, GE, and Nokia, slipped a bit. Did the Smarter Planet campaign help push up IBM’s brand value? I don’t have evidence one way or another. But it couldn’t have hurt.

I got a chance to find out how the Smarter Planet strategy and marketing campaign came to be when I interviewed IBM Chief Marketing Officer Jon Iwata a couple of weeks ago. He used to be the company’s senior vice president of communications, but, last spring, CEO Sam Palmisano decided to put him in charge of a merged communications and marketing team.

Around the time of the transition, the company’s top brass went through a basic re-assessment of what the IBM brand stood for. (Iwata apparently got into the habit of asking people he met at parties what IBM stands for to them, and was getting not-so-crisp answers.)Palmisano’s marching orders to Iwata were to tell people what’s happening in technology and make it understandable to them. So, among other things, he had some market researchers look at the most challenging engagements IBM had underway with some of its most sophisticated clients. It turn out these weren’t ordinary things like installing SAP’s run-the-business software. They were things like improving the efficiency and productivity of electrical grids, water systems, transportation systems, and health care operations. “We saw what became Smarter Planet—a lot of activity based on using sensors to monitor systems and data analysis to make companies and systems perform better,” Iwata told me.

Smarter Planet is a smart strategy and a smart marketing campaign. The company’s investing a lot in technology and services to deliver on its promises. But, in the midst of the worst recession in half a century, IBM’s revenues have shrunk—and not by just a little. It’s spending a lot on building and marketing these new businesses even while it’s under serious pressure to cut costs. We’ll have to see as the recession eases if smart strategy and marketing will yield solid revenue gains.

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