As stock price slides, Intel turns up volume

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Following a disastrous plunge in its stock price, Intel Corp. today breaks the first of four new TV spots for its Pentium III processor brand in a high-profile bid to whip up a fourth-quarter consumer buying frenzy.

The "Get the power of the Pentium III processor" effort, created by Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York, comes as Intel begins the second year of support for the brand, introduced last year. The PIII is designed to enhance consumers' PC experience, especially with interactive gaming, the Internet, digital photography and other multimedia applications. Online ads are handled by Modem Media, San Francisco.

Intel last year spent $300 million globally to launch the PIII processor, a significant portion of which was committed to advertising, a spokeswoman said. She declined to specify spending for this year's effort.

`SUSTAINING CAMPAIGN'

"This is a sustaining campaign," said John Travis, director of consumer promotions for Intel. "Our objective is to continue to drive awareness and excitement around Pentium III," he said.

Intel needs to score big with the Pentium III. Dismal earnings forecasts from PC marketers that use Intel chips have signaled a downturn in the industry just as the all-important fourth-quarter PC buying season starts to percolate.

Intel's stock plunged in recent weeks by more than 40%, losing about $200 billion of its value after it warned on Sept.21 that third-quarter revenue growth likely would register just 3% to 5% above that of the second quarter, or half of what analysts projected.

Intel's woes can be attributed to several factors. Among them, a slowdown across the entire PC industry reflected in recent announcements by market leaders such as Dell Computer Corp. that its third-quarter sales would fall short of expectations. Some Wall Street analysts downgraded shares of Apple Computer, Dell, Compaq Computer Corp. and Hewlett-Packard Co. Intel also blamed its problems on weakness in the euro and underestimating demand in Europe.

TURNAROUND EXPECTED

"It's that they can't produce enough and, along with that, some of the PC slowdown that a lot of the PC makers are experiencing," said Wendy Abramowitz, market strategist, Argus Research, of Intel's problems. "[Intel] needs to track better what's happening with the PC companies," she said, adding, "we've seen this happen at Intel in the past where earnings were hit but demand picks up. I have no doubt that things will turn around for them; the question is when."

The first 30-second TV spot runs on ABC's "Monday Night Football" and Major League Baseball's playoffs, and continues in a heavy rotation in prime time. The spots features performance artists The Blue Man Group firing green paint balls. The third paint ball fired is actually one of the artists, who slides down a white screen, forming the roman numeral III. Voice-over says, "Get the power of three, the Intel Pentium III processor."

The effort marks a departure from many of Intel's feature-oriented campaigns.

"From an ad perspective, we wanted to get back to a strong brand message," Mr. Travis said. "We're really trying to simplify our messaging. We're going back to the brand, an ownable look." The PIII's features will be flagged at retail specifically in signage and displays created by Fuel, New York, a unit of the Euro RSCG network.

Mr. Travis said Blue Man Group and Intel have a lot in common, evoking feelings of power, innovation and creativity. "There were some direct connections to Intel. . . . The blue men are blue, Intel's logo is blue; there are three blue men and three exclamation points in [Intel's] logo," said Walt Connelly, creative director at Messner Vetere. "There's also an unspoken `techiness' and [a] quirky feeling."

The campaign will run through early January. A second execution is expected to break next week and will play with Intel's signature audio sign-off and its logo. The spots will run on broadcast and cable TV and in syndicated programming, beginning in the U.S., then expanding to Europe and Asia.

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