ITM: What's the most pressing marketing issue for AMD?
Dessau: For years, PCs have been sold based on performance metrics that are really invalid based on how people use and experienced [them]. What we believe is [that] it's the right time in our industry to reset that so that the metrics are much more in line with how the users want to use [computers]. It's a bit like if people were still walking into the car dealers and asking what the zero-to-60 speed of the car is. That doesn't matter anymore, except for maybe 5% of buyers. What most of us care about is miles per gallon and safety. The car world has moved on but the PC world, overall, has not.
ITM: How does this affect resellers, system integrators and your OEM customers?
Dessau: While they're seeing a change in messaging and strategy, what we're all trying to do is work out how to sell more and sell up. For years, the belief was will you sell them something faster; but now I think the answer to that question is, “Can you sell them something different.” When we talk to resellers, VARs and retailers, and our customers, they ask how they can sell them something more than they are buying—because we all know if they buy on price, they are probably going to buy something less than they need. I should add here that we split our market into two distinct groups: what we call the “processor-aware” and the “processor-unaware” The processor- aware—about 25 million—are the people who make decisions based on the differences between AMD and the other vendors. The unaware are the other six billion: people who buy computers based on screen size or other metrics.
ITM: How has this strategy shift changed your media buy?
Dessau: We do very little advertising or trade shows on our own—we do CES. What we've been trying to do with our money is move it with our partners to the point where it has most effect: at the retail store, in the places that are most effected. We focus our branding at the processor-aware. For the unaware, we're much more focused on helping our partners, whether it's [Hewlett-Packard Co.] or Best Buy, achieve their objectives rather than focusing on the visibility of our brand.
A year ago, if you had looked at the PCs available at the retailers, there would have been 256 different combinations of labels that AMD was somehow associated with. What that meant was it was very difficult for the retailer to explain the differences between the machines. We reduced that during the holiday season last year to one logo, which we call our Vision logo, that has a good, better or best marking on it, which is our Vision, Vision Premium and Vision Ultimate. So now, when someone comes in and says they want to buy a PC, the salesperson can say, “What do you want to do with it?” And no one had ever done that before. So now, someone can say, if you just want to do basic stuff, you need a Vision system. It helps upsell the user to the right experience. It's a completely radical approach for our industry. At the point we went to one logo, our competitor went to 36.
ITM: How important is your Web site then? How about search?
Dessau: Typically, we have to go against our processor-aware and processor-unaware audiences. [For] our processor-aware audience, we've rebuilt the Web site around three or four contentcentric portals designed to suit the needs of those people. We use search terms to drive people to those portals, because much of what they buy they don't buy directly from us. They go to our partner. Part of our trick is when they come to our portal, we quickly move them to a partner site where they can make a purchase. We don't use our site for the processor-unaware. We look to our partners—the OEMs, or distributors or the retailers or the [system integrators]—to do that, and we will spend money and help fund some of their marketing campaigns to drive traffic.
ITM: Have you changed any of your internal processes or using automation tools to help manage what you're doing?
Dessau: We've gone through quite a transformation. It really started with a massive agency consolidation project. We found at one point we had 1,100 agencies doing work for us. It wasn't a case of, “Is that too many agencies?”—which it was. It was we didn't have a set processes, and work flows and basic rules in place. So we went to agency consolidation program where we'd like to get it under 300 now.
We're putting in supply management rules. We consolidated some of the teams to build one integrated marketing communications team whose job is it to look across the globe at how we spend the money. We are also putting some tools in. Over the next few months we'll implement SAP tools to help us manage campaigns and funds in a more systematic way—but that's a secondary step to having decent processes.
If you put the tools in with bad process, all you do is run bad processes more quickly. The focus [is] to get better processes, management and discipline, and make them into relatively simple campaign management, fund management and portals for our worldwide marketing teams and partners. I've also employed a new head of Internet marketing communications, and what's she's been doing is structuring that team so it's more aligned to the needs of the business and less to the disciplines of marketing communications.