"Everyone-like railroads-is coming to us saying they're a technology company," said Peter Zandan, CEO, in analyzing IntelliQuest Inc.'s Technology Agency Media & Marketing Survey. IntelliQuest conducted the survey of ad agencies with high tech accounts for Advertising Age and BUSINESS MARKETING.
But when it comes to advertising, agency executives spend most of their time on products that have something to do with computers. Manufacturers of computer hardware represent the primary technology account in terms of time for 42% of the agencies surveyed, followed by software (38%) and peripherals (32%). Telecommunications and interactive entertainment companies trail the pack (11% each).
For every dollar spent in an ad campaign, nearly three-quarters promotes specific products while one-quarter touts the corporation's image or brand (See related story on A-4).
The complete results of the survey will be discussed Oct. 16-17 at IntelliQuest's Brand Tech Forum in San Jose, Calif.
The top goal of ads for high tech products is to increase awareness, followed by strengthen image and improve customer loyalty. (Respondents ranked the goals; 1 meant most important and 3, least important.)
Seventy percent of the dollars spent, whether in traditional trade or consumer media, is geared toward the business-to-business market. But evidence indicates even high tech companies are taking a more consumer approach-with a simpler, less technical message-when they target the business-to-business market. That's an outgrowth of corporate downsizing that is expanding the power to make high tech purchases to people who are not technical experts.
"We're seeing a lot of the high tech purchasing authority being distributed out into departments," said Brian Sharples, IntelliQuest president. "As this market matures, the kind of people with the decision to buy this technology is spreading out."
The top target of business-to-business ads is information systems managers/technical professionals, accounting for nearly two-fifths of the total. End users and business managers combined account for about the same amount. Resellers/original equipment manufacturers are a distant fourth.
Even so, there is a small percentage of ad agencies that skip the business-to-business approach in targeting client's advertising.
When it comes to budget, marketing strategy and creative strategy, only half of the agency respondents say they and their clients' opinions are somewhat similar. Only one-fifth of agencies say they have very similar views on budget, an opinion that rises to two-fifths each on marketing and creative strategies.
The resource media buyers and planners need most is more information about clients' markets. Better media information is another major concern, but still a distant second. The explanation may be as simple as media buyers and planners already know a great deal about potential venues to place advertising. It could also speak to agency/client relationships.
"I see a great number of very, very sophisticated marketers-large, global in some instances; national in others-who are really using agencies in a traditional fashion, that is as a part of the organization to assist in strategic planning..... They're the ones who are usually getting the most from an agency," said Chuck Jones, who described himself as chief retired officer of Jones-Lundin Associates, a Chicago consultancy dealing in agency/client relationships.
Mr. Jones said he's seen "too many midsize agencies who've departed from that.....I don't know if it's caused by the climate or creates the climate, the distrust of agencies, limited uses where the agency is no longer an adjunct to the corporate staff, but treated as a supplier..... These are the ones who are looking for an agency every two or three years when the marketing director leaves."
Marketplace information is an ongoing agency concern, but one that Arthur Anderson, principal of New York agency/client consultancy Morgan Anderson & Co., sees improving.
"Opening the kimono, opening the books" on agencies' parts in terms of fees and charges "means the client also has to be more forthcoming." Some clients don't think to share or are fearful of divulg-ing marketplace data and trends because "they often don't see their agency as a partner. They see it as a supplier or vendor."
Mr. Anderson said high tech companies traditionally have taken the vendor view. He also said the attitude is changing.
He said a two-way flow of information is key. "Without it, the agency can't do its best work. It's guaranteed the company won't get it. And it's not a function of money" paid for services.
Agencies and their high tech clients have good accord on choice of media for ads-97% having somewhat or very similar attitudes.
The vast majority of ad dollars go to magazines. TV and newspapers are a distant second. Radio and interactive media are tied at just 2% each, a distant fifth behind other forms that include direct mail and outdoor boards.
Five categories dominate money spent in traditional media. Computer magazines rule the roost (93%) and almost always are part of the mix. Business magazines are a strong second, used by more than two-thirds. Consumer magazines, direct mail and interactive media account for about $3 of every $5 spent. Newspapers are a close sixth, but then frequency drops rapidly for cooperative ads, TV spots, radio commercials and outdoor boards.
The "theme is the haves and the have-nots," said Mr. Sharples. "Very few companies can afford to do anything else [than advertise in trade magazines]. It's the top seven to eight companies that can afford to go heavy on TV."
Computer magazines are far and away the most effective in promoting brand in agencies' minds. Only one-fifth rated TV the most effective. Consumer magazines got only one in 10 votes for effectiveness and business magazines only one in 20 in promoting brand.
About half of the agencies interviewed see computer magazines providing the best return on investment.
The typical length of a high tech ad campaign is three to less than six months (41%); Another 21% last six to less than nine months. Mr. Anderson finds that too short if brand is what's being flagged. "If you're building brand, you want to see campaigns that have legs for years."
The majority of agencies say campaign length on average has stayed the same in the past year. One in five say it's getting shorter.
On the interactive front, agencies generally see themselves at least being similar to other agencies in using interactive ads, and a nearly equal number see themselves ahead of competitors. The vast majority find interactive ads somewhat or very valuable.
Ninety percent say their technology client already has a page on the World Wide Web, but that is the only place a majority advertise. That would indicate there are obstacles yet to overcome. For example, online services have yet to convince a significant number of high tech companies or their agencies of their value, as standards have yet to be agreed on to scientifically measure use and return on investment for Web ads.