Technology

Intel and Yahoo! Hit the Marketing Gas


Yahoo! is spending millions to tell Internet users that the grass is greener on its homepage. On Sept. 21, the No. 2 search engine kicks off a multimillion-dollar advertising campaign featuring, among other things, a gardener who learns of a bona fide miracle-grow formula, thanks to the company's social search site.

Yahoo's (YHOO) campaign is one of several big marketing blitzes by tech giants wanting to get their message across in the face of accelerating competition. On Sept. 18, computer-chip manufacturer Intel (INTC) announced plans to aggressively promote its latest processor. That followed disclosure of a new marketing campaign by Cisco Systems (CSCO), starting Oct. 2 with the launch of a new logo.

As varied as the companies may be, the messages share a common theme. All represent brands and products increasingly woven into the fabric of individuals' homes, computers, and communications networks—from Cisco home networking devices to the Intel chips running PCs to the Yahoo sites serving as a portal for Web surfing by millions of users. Even the most high-tech companies need to win over not only corporate customers, but mom and pop, too.

TRYING TO STAY HIP. In each case, the companies are focused on getting consumers to opt for their brand over competing services. Jeff Swystun, global director of Interbrand, says the strategies make sense. "Tech is a great example of an industry where people can come in with a low barrier of entry and reinvent segments of the industry," he says. "In order to stave off new entrants who come in with groundbreaking innovations, it's important for the giants to stay youthful, current, hip, and cool in order to stay in touch with audiences. You've got to say, though we're big, we're not any less approachable."

For Yahoo, the competition is mostly from other giants. Google has 44% of the Web search market, compared with 29% for Yahoo, according to comScore Media Metrix. Microsoft (MSFT) and Google are constantly taking steps to capture additional traffic and related advertising dollars. Recent moves include Microsoft's new search feature, Live Search (see BusinessWeek.com, 9/13/06, "Can Microsoft Out-Google Google"), and Google's news archive service (see BusinessWeek.com, 9/6/06, "Google Digs Into the Archives").

Tim Bajarin, principal analyst at Creative Strategies, a California marketing consulting group, says Yahoo's campaign is a necessary weapon in the Web search wars. "The problem is that, in the age of the Internet, ultimately customers go to whichever service is better, which is why, if you are Google or Yahoo or whoever, you have to be constantly innovating and getting new hooks to grab people's attention," says Bajarin. "Every one of these guys wants to be No. 1, right? So consequently they will all be pushing hard."

GOING FOR THE OTHER HALF. Yahoo makes no secret it wants a bigger slice of the $16 billion Internet advertising pie. "We have about 500 million users a month, that's half the Internet," says Allen Olivo, vice-president of global brand marketing at Yahoo. "We want the other half of the Internet to come and join us."

Intel, too, is feeling the heat from a rival, smaller chipmaker Advanced Micro Devices (AMD). On Mar. 3, Intel announced that revenue would be lower than projected because of market-share losses to AMD (see BusinessWeek.com, 3/6/06, "AMD Chips Away at Intel"). AMD has gained share in the cost-sensitive PC market by beating Intel's prices by as much as 20%, says Bajarin, and now AMD says it can get 40% of the market by 2009 (see BusinessWeek.com, 8/22/06, "AMD's Race for Server Space").

Intel is hoping to throw a wrench into AMD's works by appealing to both consumers and vendors with the message that, when it comes to processors, you need the best. On Sept. 25, television ads will begin airing that discuss the capabilities of "Intel Core 2 Duo," which Intel says is the fastest processor in the world. The ads will feature high-energy music, dancers, and other performers.

AVOIDING OBSOLESCENCE. The hope is that consumers will opt for a cooler, more expensive processor with more capability to run multimedia applications and avoid obsolescence. Agnes Kwan, Intel's spokeswoman, says that the campaign will be Intel's largest since advertising the Centrino chip in 2003. "Now is the time that we are ready to come out to consumers and build that emotional connection with them," Kwan says. "We want to make the Intel brand hip, cool, and relevant again to the consumer."

Cisco, facing slowing growth in its biggest businesses, wants to project a new image to consumers. It's aiming to change the perception that it only produces the high-end routers and switches that zip information around the Internet. The company is increasingly moving into entertainment with products such as home-networking equipment and wireless DVD players. Cisco's campaign will begin with a new logo on Oct. 2, billboard advertisements, and product placement in movies and television, according to press reports.

Yahoo's ads will premiere on prime-time TV during the station breaks for My Name Is Earl and Grey's Anatomy. In one of the first television ads, the lawn formula that the gardener heard about on Yahoo Answers resurrects the family dog and transforms the yard into a lush paradise. Yahoo is hoping the campaign will have a similarly rejuvenating effect on its brand.


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