100 LEADING NATIONAL ADVERTISERS; CHIPS DOWN, COMPUTERS ROLL DICE

By Published on .

Most Popular
The personal computer industry closes out 1995 with a new present and future.

The present is of course the launch of Microsoft Corp.'s Windows 95 last month, starting point for an estimated $700 million industrywide marketing blitz for the new software standard.

The future starts in late October, with the introduction of Intel Corp.'s code-named P6 chip, successor to Pentium. Volume sales of P6-based computers aren't expected from IBM and other major marketers till next year, when Intel will begin its major P6 marketing push. But arrival of the P6 chip at the high end of the market will help drive down Pentium prices and solidify Pentium as the industry standard in home and business PCs.

PC sales are on track this year to roughly match the 26% growth rate in 1994. PC marketers last year sold 18.6 million computers in the U.S., estimates Dataquest. Overall U.S. PC sales have nearly doubled since 1990, when 9.4 million were sold.

Ad spending trends suggest computer marketers reallocated budgets favoring consumer over trade advertising in 1994. Outlays by marketers of computers, printers and software in consumer publications and broadcast media jumped 16.3% to $555.8 million, according to Competitive Media Reporting. Advertising by technology marketers in business publications, traditional destination for the industry's ads, advanced just 7% to $2 billion, estimates Adscope.

TV spending spurred consumer ad growth with spending of $182.4 million, up 44%, more than half carried in the crucial fourth quarter.

Top TV spender IBM Corp. upped its TV ad count 93% to $61.5 million. Compaq Computer Corp. boosted TV expenditures 81% to $24.6 million in the first full year of its Presario consumer line. Microsoft began its first major consumer campaign, spending $17.2 million on TV in the final weeks; Intel, meanwhile, infused $23.1 million into the medium, up 45%.

Intel this year gave a boost to the computer industry's TV spending by adding broadcast to the co-op program for PC marketers that buy its chips. Co-op participants-most PC marketers, with the exception of Compaq and IBM-get a 6% rebate on chip purchases good toward print and broadcast ads. Intel is expected to give out more than $130 million in co-op money to U.S. PC marketers to get its "Intel inside" logo planted in their ads.

Computer media spending is picking up in the final months of '95 as well, largely because of Windows 95. Microsoft plans to spend about $200 million on Windows 95 and other product advertising in the year ending June 1996, double its just-completed fiscal year.

This fiscal year's effort included Microsoft's first infomercial. The paid program, which Microsoft took pains to insist was not really an infomercial, promoted Windows 95 and was subsidized with commercials from Coca-Cola Co., Compaq, Eastman Kodak Co. and CompUSA.

The Windows 95 launch marked Microsoft's first significant move into new media, with promotions on its home page and ads on other Web sites. New media were curiously absent from the technology marketer's fall '94 burst into consumer advertising; Microsoft didn't think the interactivity was of size enough then to bother with.

Apple Computer, after cutting spending-and losing market share-in 1994, will nearly double spending in the final four months of '95, suggesting a year-end blitz of $60 million. Apple print and broadcast messages will make the case that Macintosh is better than Windows 95. Apple, the first computer company to produce an infomercial, will again use them during the holiday season.

The hot home computer market is getting even more hotly contested with the entry of Hewlett-Packard, a rising star in the world PC arena, into the U.S. home market in April 1995 with a test run at Circuit City Stores. By August, it had added eight other national chains.

That means heightened competition for maverick Packard Bell, whose aggressive pricing and ubiquitous retailer co-op advertising helped catapult it to the No. 1 spot last year in home PC sales. The arrival of Hewlett-Packard also raises the stakes for Compaq, which jumped to No. 1 last year in overall U.S. and world PC sales.

Compaq and IBM are putting more emphasis on the home in 1995 with new consumer divisions. Compaq next year plans to jointly market computer-based educational toys with Mattel Inc.'s Fisher-Price, putting the Compaq brand in front of the youngest of consumers.

In this article: