Rejuvenated Xerox doubles its investment in the brand

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The boom of the late '90s meant little to a misaligned Xerox, but now the document-management company has emerged from a tough turnaround led by a determined CEO who plans to reinvest in the brand by spending more on marketing.

By the end of 2000, Xerox teetered on the brink of bankruptcy. It was losing market share to competitors and bleeding money through its own expensive manufacturing operations. Although advertising was the least of its problems at that point, Xerox was also taking a beating from ad critics for overspending on ineffective campaigns.

Then in 2001, along came a new CEO. Anne Mulcahy, a lifelong Xerox employee who started as a field salesperson, turned the company upside down and around. She cut costs by putting together a deal to offshore manufacturing, dropped money-losing product lines, and reorganized the sales force by vertical markets. She refocused around three key lines: production monochrome and color devices, office products and services. Ms. Mulcahy got the company back in the black; its first quarter 2004 showed a 25¢ per share gain. And guess what happened along the way? Advertising got better. Xerox now frequently wins effectiveness awards for its advertising.

"They have definitely crafted an idea, a concept about what Xerox is and all the business lines are now singing from the same page," said Don Dixon, principal analyst with Gartner Group. "They are more nimble, and more focused. Their marketing is not just that heavy push and pull of the past, but much more strategic."

more investments planned

Nancy Wiese, VP-worldwide branding/advertising for Xerox, said, "We're a much more marketing-driven company today than we were 10 years ago. We used to be much more sales-driven. ... Today we're marketing-driven in support of the products."

Marketing has already begun to get more emphasis under the restyled Xerox, and more investments are planned. In the recently announced first-quarter earnings gain of 25¢ per share, 8¢ came from its sale of Xerox-created technology company ContentGuard. Ms. Mulcahy has said Xerox will use those proceeds to invest back in the business primarily through additional marketing, including increased advertising.

However, the years between 2000 and 2002 were fairly quiet in the marketing and advertising departments. The money just wasn't there to spend, and frankly, even insiders admit, neither was the cohesive message. But after the turnaround took hold, Ms. Mulcahy and Xerox were ready to spotlight its brand again. This time, Xerox chose a more subdued, customer-centric focus than the panned "Blue Dog" and Greek chorus advertising, featuring "Seinfeld" actor John O'Hurley, in the late `90s. Both were created by longtime agency WPP Group's Y&R Advertising. Sibling Media Edge handles planning and buying.

Xerox launched TV, print and Internet advertising, also from Y&R, with the tagline "There's a new way to look at it." Ms. Wiese said that the "it" can simply either mean the product or service being featured, or in the bigger scenario, Xerox itself.

The base campaign that launched in 2002 has been so successful, Xerox continues to add iterations. The core print ads feature a giant red Xerox logo and short case studies built around clients including Microsoft, Office Depot and Enterprise car rentals. To date, 60 of those print ads have been created, running in publications including McGraw-Hill's Business Week, Forbes and The Wall Street Journal. Last year the company spent $53.5 million, according to TNS Media Intelligence/CMR, up significantly from the $27.3 million it spent in 2001.

`survivor' flavor

Xerox's TV commercials, which generally run on cable and business channels, feature products as the main character with a story built around them. Two of the most recent spots are for Xerox's digital-archiving service, and its high-speed solid color inkjet printer, the Phaser 8400. The first features a little "Survivor" flavor with an office worker explaining to worried co-workers that a flood didn't ruin the company's documents because he had ordered them scanned and stored in a digital library. The second spot is called "Fastest Under" showing the Phaser as the fastest copier under $1,000, featuring other "Fastest Unders"-such as a the world's fastest tap dancer under 12, and the world's fastest bird underwater (the penguin).

Like the redesigned company, the look and feel of its ad campaigns retains its essence no matter what country its in, what medium its delivered on, or who the target audience is. Ads in technology department-targeted publications for instance, are the same as the Business Week ones, but offer a longer and more in-depth explanation of the case study. A Xerox spokeswoman said she recently saw an ad in Amsterdam written entirely in Dutch (and she doesn't speak Dutch) but knew it was a Xerox ad, even without seeing the logo. Of course, as an insider she's used to seeing those ads more often, but others agree.

"It's a very flexible idea," Ms. Wiese said. "Before we launched, we knew what we wanted it to support and so it was created with that in mind. What makes it so powerful is it adapts so well."

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