Corel software slashes ad budget

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OTTAWA, Ontario -- Canadian software marketer Corel Corp. is cutting ad spending by more than half as it moves to trim costs and prepare for further losses after a money-losing summer. For the first quarter of 1998 Corel will spend just $10m advertising its CorelDRAW and WordPerfect software around the world, down from about $22m a quarter it has been averaging since early 1996.

Corel lost $31.4m in the third quarter this year and could lose as much as $20m in the fourth quarter, warned the company, whose chief rival is software giant Microsoft Corp.

Corel's TV and print buy will see the bulk of the cuts and "you may see a little bit of scale-back in trade show areas," says Corel spokeswoman Carrie Bendzsa. "We (now) want to leverage what we do have and make the most of our placements." All of Corel's worldwide advertising is handled in-house.

Corel spent $55m on advertising in 1995 but drastically boosted ad spending in 1996 after it added the WordPerfect word processing software to its lineup following a deal with Novell Inc. Along with its cut in ad spending, Corel is revamping its sales approach with an "increased commitment" to the corporate market.

Copyright September 1997, Crain Communications Inc.

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