Gateway 2000, the No. 2 direct PC seller, is reviewing its estimated $70 million global account. If the business moves to contenders such as J. Walter Thompson Co., New York, or TBWA Chiat/Day, Venice, Calif., it could signal a dramatic departure from Gateway's current homemade print ads.
After the review, Gateway's in-house agency will continue to handle some work.
MICRON DOUBLES SPENDING
No. 3 Micron Electronics, meanwhile, is doubling its ad budget to $40 million for its fiscal year ending Aug. 31. Micron in December hired Trahan, Burden & Charles, Baltimore, and this year will move into TV, radio and business publications.
Of Micron's $20 million increase, about two-thirds will go into TV, radio and non-computer publications-places where Micron thinks it can build its brand.
Packard Bell NEC, the largest seller of PCs in retail stores, this spring will make a big push into mail order through a new division, Zenith Data Systems Direct. ZDS Direct has been running limited ads since the fall created by TFA Communications, Chicago, and placed by Freeman Associates, Wellesley, Mass.
ZDS TALKS TO M&C SAATCHI
ZDS Direct's estimated $10 million-plus formal launch is set for March or April. It has been talking with M&C Saatchi, New York, the agency behind last fall's dark, provocative Packard Bell campaign.
No. 1 direct seller Dell Computer Corp. remains focused on the business market. But Dell, too, wants to increase sales to sophisticated home buyers. Dell's virtual store on the Web (http:/www.dell. com) is designed in part to appeal to those consumers. The marketer hired Grey Interactive, New York, in September to improve its Web presence.
Dell also will move more heavily into business and some consumer media through Goldberg Moser O'Neill, San Francisco, agency for its $40 million-plus U.S. account.
Booming advertising reflects a booming segment. U.S. sales through retail stores, business PC resellers and other non-direct channels grew just 9% in '96 to 19 million PCs, estimates Computer Intelligence InfoCorp. But mail-order sales soared 38% to 6.3 million PCs, a record 23.4% of the PC market.
Market dynamics favor the direct channel: By constantly turning inventories and cutting prices, direct PC sellers can sell the hottest technologies-such as Intel Corp.'s new MMX chip-faster and cheaper than stores or dealers, said Computer Intelligence analyst Matt Sargent.
Both business and consumer buyers are moving into direct. More than half of home PCs sold now are replacement machines, and those buyers have the knowledge and