By 1970, computers had become an accepted part of business practice and computer advertising broke out of its base in technical journals and moved into the general business press. But most computers at the time were restricted to business use, with small offices using low-cost minicomputers. Time-sharing services gave other small businesses access to mainframes via a terminal and modem connected to a central machine.
The Apple, introduced in 1976, was the first all-in-one computer, with a keyboard for input and only a monitor and printer needed for output. Its success, however, was due in large part to its advertising, which consisted of color print ads aimed at the mass market. The ads depicted cultural figures such as Thomas Jefferson and featured the Apple logo, a multicolored apple with a bite taken out of it.
A host of magazines emerged to serve the new market, which rapidly expanded as rival PC makers emerged to take on Apple. Titles such as Byte, A+ and The User's Guide to CP/M, featured long articles about improving performance, new add-on products and new software applications. Full-page display ads branded the new machines and their makers. Commodore Business Machines emphasized the low price of its VIC-20. Atari Corp. emphasized the quality of its graphics and usefulness for playing games. Radio Shack, in ads for its TRS-80, emphasized the support offered by its retail stores.
Despite the growth of Apple and the other PC companies, however, the decade ended with the market divided. Hobbyists and small businesses bought PCs. Older, established business computer companies, such as IBM and Digital Equipment, sold mainframes, minicomputers, terminals and networks to the more well-heeled. Ads for these more powerful devices often ran in business magazines and emphasized their serious power for "real" applications, such as the online delivery of data to worker desktops.
Reaching the mass market
Computer advertising really came into its own in the 1980s, as the mass market embraced computing and computer makers embraced mass-market media such as TV. Apple had done some effective branding in the 1970s, and even some TV advertising, but when IBM entered the PC market in 1981, it set a new standard in every way.
IBM's PC ran a new operating system, PC-DOS, which it licensed from a start-up company called Microsoft Corp. IBM prenegotiated the launch of an "official" magazine, called PC and introduced its machine with a TV ad campaign from Lord, Geller, Federico, Einstein, New York, that featured a character reminiscent of Charlie Chaplin's Little Tramp. Print ads used straightforward copy that emphasized the simplicity of the machine and carried the headline, "A tool for modern times," an allusion to Mr. Chaplin's 1936 movie "Modern Times."
As the IBM campaign evolved, the "Little Tramp" branding imagery was applied to all product niches related to the PC, including software, service and computer networks. IBM's PC introduction sparked a revolution in offices, which began replacing typewriters and calculators with IBM's PCs. Millions were linked to IBM mainframes as terminals, and millions more were connected to one another to form PC networks.
IBM's product spawned a host of PC clones, all of which licensed Microsoft's operating system under the name MS-DOS. The most successful of these companies was Houston-based Compaq Computer Corp., whose engineers carefully (and legally) copied the IBM PC design through a process called "reverse-engineering," allowing them to produce a machine that ran nearly all the IBM PC's software.
The PC revolution forced publishers to respond, and titles devoted to the PC, such as PC, PC Week and PC Magazine, became some of the most profitable franchises in the magazine business.
While IBM's PC and its imitators remained the market leaders, the market held its breath throughout the early 1980s, waiting for Apple's response Apple responded with perhaps the most famous TV spot in history. Chiat/Day, working with director Ridley Scott, produced the spot, which ran only once?on the telecast of Super Bowl XVIII. It cost $1.5 million.
"1984," named for the George Orwell novel, featured a large screen from which the image of a man harangued a submissive audience. The scene was intercut with footage of a young female athlete carrying a large hammer. As the "Big Brother" figure reached the climax of his speech, the woman ran into the room and hurled the hammer at the screen, which exploded, showering the stunned audience in a white light. Voice-over intoned, "On January 24, Apple Computer will introduce Macintosh, and you'll see why 1984 won't be like '1984.' " The spot ranked No. 12 on Advertising Age's list of the top 100 ad campaigns of the 20th century.
Apple's Mac made possible entirely new computer applications such as desktop publishing because pages designed on its screen looked the same when printed.
The Mac, however, labored under some weighty burdens. Its relatively high price and the huge existing base of PC users in the business world restricted the Mac to niche markets, and in 1990 Microsoft's Windows Version 3.0 brought the capabilities of the Mac into the computing mainstream, so computer buyers did not need to trade up to the more expensive Mac to benefit from its functionalities.
By 1990, a formula for computer advertising seemed set: Marketers used TV for brand awareness and print (mostly magazines) to advertise features, while retailers used radio was used to bring customers into their stores. But that began to change after Gateway 2000 ran an eight-page magazine ad that featured a combination of its models and their features under the headline "PC saloon."
The early 1990s represented a golden age for computer magazines. Publications such as PC Magazine, Computer Shopper and PC Week printed hundreds of pages in each issue, most of them ads for computers and related equipment as well as venues where consumers could buy the products.
Microsoft became the dominant marketer in the computer category. The Redmond, Wash.-based software giant did not buy TV spots but instead concentrated on establishing its Windows operating system as an "ingredient" found inside boxes available from various hardware marketers. Those companies provided the marketing muscle behind Windows, promoting their computers as running Microsoft's operating system. That strategy allowed Microsoft to tag along on the marketing coattails of several big-spending companies, enjoying their largesse while spending considerably less on advertising.
Dell Computer Corp. led the big change in how computers were advertised and sold in the early 1990s: mail order. Early Dell ads emphasized features and price, but as the decade wore on the company's ads began focusing instead on the convenience of having a computer custom-built for each consumer. Chiat/Day, San Francisco, was Dell's agency at the beginning of the decade.
As computers became more powerful and Dell's direct sales channel grew, the marketer began to dominate business as well as consumer markets. In 1993, Dell grew 129%. The Internet supercharged Dell's growth. Dell could reach its buyers directly through Internet advertising rather than buying expensive TV time and could take orders directly via the Internet. By 1998, Dell was bringing in billions of dollars of sales per year through the new channel, and direct PC sales seemed ready to overtake those made through all resellers.
By 1995, even Microsoft was lured onto TV. It began with simple image ads but exploded in that year with the launch of Windows 95. Spots for the new operating system featured quick cuts of people in homes, offices and schools set to the Rolling Stones' "Start Me Up." (Reportedly the Stones were paid $12 million for the song's license.) Wieden & Kennedy, Portland, Ore., created the consumer campaign; Anderson & Lembke, San Francisco, produced the trade ads as well as ads for applications software such as Office 95.
IBM was still spending $150 million per year in 1994 on advertising, most of it product specific. Under CEO Louis Gerstner, IBM's strategy switched to a $1 billion branding campaign via Ogilvy & Mather Worldwide that was built around the theme "e-business." TV spots were presented in letterbox format, with blue bars across the top and bottom of a rectangular frame. Spots focused on making Internet hardware, software and services work together, implying that no company but IBM was up to the task.
In 1999, under the headline, "Where do you want to go today?" Microsoft launched a $500 million integrated marketing push from Wieden for its software in 1999. The ads focused on applications for business, home and school. In 2001, however, Microsoft changed course with a series of TV ads from McCann-Erickson Worldwide that focused on the flexibility of its enterprise (big business) software.
As the new millennium dawned, advertising about the Internet reached its apogee, and many of the ads on the Super Bowl XXXIV telecast in January 2000 were for new, Internet-related "dot-com" companies.
The collapse of the Internet stock bubble in 2000, however, had an impact on some of that advertising, but computer advertising remained strong. Television remained the focus of computer image advertising, while the Internet became the favorite medium for detailed promotions and much of the order taking. By 2001, U.S. ad spending in the computers, software and Internet category hit $2.67 billion, down 36.1 % from 2000.
Spending continued to drop in 2002, tumpbling another 18% to $2.2 billion with a slight rebound in 2003 when ad spending reached $2.4 billion in the computers, software and Internet category. The growing popularity of mobile computing contributed to the marketing dollars spent with big new campaigns from Intel for its Centrino mobile technology and millions more spent by Wi-Fi connectivity product makers.