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JULY 9, 2003
Polishing HP's "Precious History" Marketing chief Allison Johnson talks about promoting the brand and why advertising helped carry the day in last year's Compaq proxy battle As technology services and products become commodities, compelling marketing has become increasingly critical. "In maturing industries, where speeds and feeds are less important, brand becomes more so," says Allison Johnson, Hewlett-Packard's (HPQ ) senior vice-president for global brand and communications. "Increasingly, people are recognizing the power and importance of brands." HP will spend some $400 million in 2003 on its Plus HP brand advertising and marketing campaign, which focuses on how HP products are helping its customers. (The campaign is summed up as "Customer + HP = Everything is possible".) That compares to virtually no money spent on the brand in 2002, a year in which HP poured much of its $1.4 billion overall advertising budget into ads arguing the merits of the merger with Compaq. In the spring of 2002, after a bitter and divisive proxy fight that pitted CEO Carly Fiorina against Walter Hewlett, son of one of HP's founders, shareholders approved the Compaq deal. The Plus HP brand fits in with Johnson's belief that creating an emotional link to HP is key to the company's ability to differentiate its products from those of competitors. This became all the more challenging because of the merger with Compaq, but the integration appears to be taking hold without major problems. And, Johnson figures, aggressively communicating HP's brand and mission has played a key part in reaching the outfit's diverse customer base: large corporations, small businesses, and individual consumers (see BW, 7/14/03, "Can HP's Printer Biz Keep Printing Money?"). BusinessWeek Online Reporter Amy Tsao spoke to Johnson about these issues on June 27. Edited excerpts of their conversation follow: Q: Much has been made of the notion that under Carly Fiorina, HP seems to be more focused on marketing and less focused on innovation. What do you make of the criticism that HP is a marketing machine? A: It's terrific to be accused of doing great and aggressive marketing. It's something the company hasn't traditionally been credited with. I want us to be seen and heard. Q: How have the proxy fight and merger tarnished the HP brand? What steps have you taken to mend it? A: What's interesting is the Interbrand survey [from 2002] -- which was done in the January-to-April time frame, precisely the time we were in the middle of the proxy battle. Our brand value went up a point as opposed to down. So, I don't believe there was too much tarnish to the brand based on empirical data. We broke the mold on proxy-based advertising, much to the initial concern of our proxy solicitors, because we weren't willing to do traditional proxy advertising. If you take a look at the kinds of proxy advertising we did -- which was to tell the positive case for the merger -- compared to what our competition did and what is normally done in proxy battles, ours was a huge departure. Q: Do you think that better marketing helped HP win the proxy fight? A: I think a number of actions were enormously important. [Marketing was] one component. I wouldn't put it all on advertising, but it was an important piece.
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