Walter Hewlett, son of HP co-founder William Hewlett, has vociferously opposed the merger in speeches, public relations and direct-marketing. The Walter Hewlett Trust is expected to spend an estimated $1 million for print ads.
The first round of ads, which began appearing earlier this month in such outlets as The New York Times and Dow Jones & Co.'s The Wall Street Journal, attack the merger with a quote by a Harvard Business School academic with the headline, "No Large-Scale High-Tech Merger Has Ever Worked-Ever." Mr. Hewlett, an HP investor and board member, believes the merger is a bad deal for HP shareholders and has publicly lashed out against Chairman-CEO Carly Fiorina.
HP began lobbing pro-merger ads late last year from Omnicom Group's Goodby, Silverstein & Partners, San Francisco, HP's agency. Bold print ads using the words of co-founder David Packard to support the merger raised the ire of his son, David Woodley Packard.
"It's a soap opera, with Carly vs. the two heirs upfront and against it," said one executive involved in the fray.
HP is vastly outspending Mr. Hewlett: HP's ad blitz is estimated at $8 million.
The agencies referred calls to their clients. HP did not return a call by press time. A spokesman for Mr. Hewlett's public relations agency declined to comment on spending.
HP is also using the Web with a special site, votethehpway.com. Mr. Hewlett's ads direct investors to votenohpcompaq.com.
Contrary to most investor relations and proxy campaigns, HP's ads use the same elegant style as the rest of its advertising to promote the merger. Dry, text-heavy letters to shareholders, traditional for these types of proxy battles, have not appeared on either side.
"What if we had stopped here?" says one headline on an HP spread. The audio oscillator, one of HP's earliest inventions, appears on the left. Text on the right, in a not-so-veiled allusion to Walter Hewlett's opposition, reads: "Even now, some suggest we might stop at printers."
A recent spread dramatically illustrates what's at stake with a side-by-side tally of today's HP: "HP is #5 in enterprise storage, HP is #4 in Windows servers, #2 in Unix servers and #3 in PCs... ." The "tomorrow" tally boasts solid No. 1s: "HP + Compaq is #1 in enterprise storage, HP + Compaq is #1 in Windows servers, HP + Compaq is #1 in Unix servers, HP + Compaq is #1 in PCs."
It's not unusual for a technology company to run ads calling attention to a rival's weaknesses. It's extremely unusual for a tech company to run ads that tell the world about its own weaknesses. Should HP lose the takeover battle, it will be in the curious position of having advertised just how far behind it is in certain categories. That could give rivals a marketing opening.
Marketing executives wonder whether the venerable HP brand will be sullied no matter which side wins. One executive involved in the effort said it's not in HP's interest to overhype the merger benefits. But as the battle gets down to the wire, the executive said, advertising has intensified to the point of "trying to kill ants with a mallet."