Facing financial and brand challenges, Nortel Networks last month launched a global ad campaign designed to reposition the company as a leader in telecommunications.
The year has been fraught with difficulties for Nortel. In April, the company's board of directors fired CEO Frank Dunn, CFO Douglas Beatty and controller Michael Gollogly amid of questions concerning the company's financial reporting practices. Under review by an independent audit committee, the company has been forced to restate its financial statements going back to 2000.
Nortel's board replaced Dunn with William Owens, a Nortel director and former chairman-CEO of satellite communications company Teledesic.
One of Owens' primary goals is to transform Nortel into a more marketing-focused company. In an effort to do that, Owens in April hired Clent Richardson as chief marketing officer. Prior to Richardson's hiring, Nortel's marketing communications had been decentralized.
"As a company, we have been through an awful lot," said Wes Durow, director of global marketing communications at Nortel, which is based in Toronto and has U.S. headquarters in North Carolina's Research Triangle Park. "Our business is in a place where we need to move forward and tell our story."
First TV advertising since 2001
The ad campaign, which has the tagline, "This is the way. This is Nortel," was developed by the Richards Group, Dallas. It is Nortel's first advertising since Richardson came on board and its first TV advertising since 2001.
Zeus Kerravala, VP-enterprise infrastructure at research company Yankee Group, said Nortel's biggest challenge is that for years the company did not promote the Nortel brand. "They promoted their subbrands, not the corporate brand," he said, pointing to Nortel brands such as Meridian PBX services and Alteon switches.
"If you look at their biggest rival, Cisco, they made themselves synonymous with the Internet," Kerravala said. "When buyers would think of Internet-related products, they would think of Cisco first."
"With this [rebranding], Nortel wants to become synonymous with communications. Right now it's not," Kerravala said.
He said Nortel's financial difficulties will not have a great impact on buyers, primarily because purchasers are more familiar with Nortel's subbrands than with the Nortel corporate brand.
"Ironically, if their corporate brand were a little more well-known instead of the sub-brands, the financial difficulties might be a bigger problem," he said.
Kerravala said it is too soon to say whether the new campaign will succeed in raising awareness of Nortel as a leader in telecommunications. "It is the consistency of the message over a long period of time that will do that," he said. "What they do today they have to do next week, next month, next year-and stick with it. That is how you change the corporate image."
Aimed at C-level executives
The campaign, which includes television and print, is aimed at CEOs, CIOs and CFOs, and shows how people use networks powered by Nortel to improve their lives.
The first TV spot features children's voices singing the nursery rhyme "This is the Way (We Sweep the Floor)," with images of people using Nortel networks for applications from powering global stock exchanges to transmitting medical data.
At the end of the rhyme, the voice-over says, "This is the way hundreds of millions of people, Fortune 500 companies and government institutions around the world trust their networks to be reliable and secure."
Print ads also show how people use networks powered by Nortel. The company is not currently placing ads in vertical trades, although it may move into verticals next year, Durow said. "Once we have a consistent presence in the baseline business press, we will move into verticals," he said.
The campaign does not yet include online, although online is being planned for next year.
The campaign budget was not disclosed.
David Hall, principal at the Richards Group, which was named Nortel's agency of record this fall, said the creative strategy grew out of the need to simply tell the Nortel story.
"Nortel wasn't getting credit for all the great things they do," Hall said.
He said the idea of using the children's rhyme juxtaposed with serious images of how people use the Nortel network was designed to boil the Nortel story down to a simple message.