Consumer Electronics

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Consumer electronics sales in the U.S. date to the introduction of the radio receiver by Radio Corp. of America in 1919. RCA acquired its best-known advertising mascot, Nipper the dog, 10 year later, when it purchased the Victor Talking Machine Co.

By the 1940s, RCA was far ahead of its smaller competitors in radio sales, but the radio began to lose ground to an increasingly popular rival—the TV set. Lord & Thomas handled some early RCA advertising, but lost the account in 1944 to J. Walter Thompson Co., which handled most of the RCA account for the next 11 years (sharing it with Kenyon & Eckhardt and Ruthrauff & Ryan). But the relationship between JWT and RCA was a difficult one, with the first split near the end of 1953 when RCA put its account into review, eventually settling on K&E.

In 1959, JWT won back the account, but by then RCA was losing market share in the TV segment to companies such as Zenith Radio Corp. Zenith, another pioneer in radio that went on to produce TV sets, got its start in 1918. Its well-known slogan, "The quality goes in before the name goes on," first appeared in 1929. Zenith's account, which was much smaller than RCA's, was handled by H.W. Kastor & Sons in the 1930s, then E.H. Brown Advertising and MacFarland Aveyard in the 1940s; all were Chicago agencies. The Zenith account passed from shop to shop during the 1950s, including Batten, Barton, Durstine & Osborn, which resigned Zenith to take on Philco, and Earle Ludgin & Co. Foote, Cone & Belding won the account in 1958 and held onto it for many years.

Motorola Co., a more diversified company, used Ruthrauff & Ryan as its agency beginning in 1953.

Arrival of the Japanese

The 1960s saw rapid growth in the popularity of portable transistor radios and color TVs, as Japanese companies such as Matsushita Electric Industrial Co. and a small newcomer, Sony Corp.—with a $500,000 ad budget and a small agency, Ellis Advertising—tried to gain a foothold in the U.S.

With World War II still fresh in many American consumers' minds, Matsushita used the Panasonic brand in the U.S. to avoid negative associations that might be made with a Japanese name. In 1966, Panasonic's agency, Ted Bates & Co., created campaigns with taglines such as, "Are you scared stiff your first color TV set will turn out to be a $500 dog?"

RCA and JWT scored a coup in 1964 with the publication in major newspapers of actual photos of the Moon taken from the Ranger 7 spacecraft. The pictures, appearing only days after they were taken, were used in ads that touted NASA's use of RCA TV technology.

Magnavox made headlines in 1970 with a decision to drop K&E as its agency of record and instead chose to buy advertising a la carte in an effort to save the 15% commission. The experiment lasted only two years, however, and in 1972 the $5 million account went to William Esty Co.

Motorola was one of the first U.S. companies to abandon the consumer electronics market, citing excessive advertising costs as the primary reason. In 1973, the marketer claimed ad costs of $4 million to $5 million were not justified based on its sales of $244 million. Motorola sold its TV business to Matsushita, which renamed the company Quasar.

Zenith remained No. 1 in consumer electronics—exceeding $1 billion in sales in 1973—but its products generally were considered to be of lesser quality than those of many of its rivals. Zenith, however, aggressively defended its leading position, going so far as to ask Sen. Frank Moss to prohibit rival Sony from using the results of a federal study in its ads. The study, on which DDB's "Sony. No baloney" ads drew, had found that Sony used rigorous standards in touting its technical achievements.

At the same time, newly popular minicalculators were starting to receive ad support. Sharp Electronics Corp., which had about a 30% share of the U.S. calculator market, spent about $1 million a year in TV and print via Wisser & Sanchez in 1973.

Sharp first advertised its TV sets in the U.S. in 1975 via Wisser & Sanchez, using the tagline, "One sharp picture is worth a thousand words

The following year, RCA broke again with JWT, moving its $100 million account to Leo Burnett Co.

In early 1976, Sony became the first marketer to offer consumers a home videocassette recorder. The VCR featured Sony's Betamax format and was supported with a $2 million in-house campaign that fall. (Michel-Cather, the shop that had handled Sony's Betamax account for five years, was lured away by JVC Industries when it went head-to-head against Sony with a competing, noncompatible, VCR format.)

By the end of the decade, Sony still continued its efforts to take over U.S. consumer markets. While its Betamax had failed, the marketer's portable Walkman was a success; it took off immediately when introduced in 1979 despite limited advertising.

The Walkman's use of cassette tapes made it popular with consumers who sought portability teamed with up better-quality playback, and its success breathed new life into audiocassette recordings, a category that had been dormant since its heyday in the mid-1960s to late in the '70s, when the relatively large size of the then-common eight-track tape resulted in slowing sales.

Sony also helped popularize the rival compact disc format for music, introducing it in 1983 in Europe and North America; the company's marketing clout helped the CD eventually become the most popular format for listening to music. Sony's U.S. ad budget climbed to $53 million by 1984, with McCann-Erickson handling its accounts. By 1986, Sony commanded 40% of a growing market.

New technology

In 1982, marketers began to offer innovations in the TV segment. Sony, Mitsubishi and Hitachi Ltd. introduced rear-projection TV sets, and by 1985, stereo TV sets also began to appear. Zenith advertised its sets' stereo capabilities via FCB with TV spots featuring the Preservation Hall Jazz band, taped and broadcast in stereo, of course.

At the end of the decade, with the U.S. suffering a recession, electronics companies scaled back advertising—all, that is, except Magnavox. The Dutch company hiked its targeted ad spending in 1988 to $30 million, a 50% increase from the previous year and double RCA's spending, in an attempt to grab market. At the same time, parent Philips began to began to introduce its Philips brand in the U.S. on high-end electronics products, maintaining it as separate from its Magnavox nameplate.

Toward the end of the 1980s, analysts began to question the viability of U.S.-based consumer electronics companies. U.S. marketers responded by boosting their ad spending: Zenith promoted its Chromacolor TV sets via FCB, RCA advertised its Colortrak sets using Burnett campaigns, and Quasar pushed its products with advertising from DDB Needham Worldwide.

In the 1990s, consumers demanded new levels of sophistication from marketers, which stepped in with new products as well. RCA, which in 1988 was acquired by Thomson Consumer Electronics, introduced a home-satellite system under the DirecTV brand to compete directly with cable TV. In 1993, RCA began a $120 million-plus marketing campaign for the $1 billion joint project with Hughes Communications and Hubbard Broadcasting. Agencies for DirecTV included Ammirati & Puris for RCA, Bozell Worldwide for Hubbard and Lintas Campbell-Ewald for Hughes.

In the early years of the decade, Philips tried to turn the tide on its poor financial performance with its first global image advertising campaign. The $40 million global effort was handled by Euro RSCG, London; D'Arcy Masius Benton & Bowles, New York, had Philips' accounts in the U.S.

In 1996, Thomson, Sony, Philips, Toshiba America and Panasonic spent a combined $150 million marketing digital videodisc players, which quickly supplanted the earlier LaserDisc format.

Toshiba and Warner Home Video teamed in late 1997 to promote the players and movies on DVD with $30 million in ad support. The following year, Philips created an infomercial for DVDs in conjunction with print, TV and cinema support produced by Messner Vetere Berger McNamee Schmetterer/Euro RSCG.

Older technologies also were supported. Sony, for example, reintroduced the Walkman in 2000 with a $30 million campaign created by Y&R Advertising, its largest ever for that brand.

Consumer electronics advertising continued strong into the new millenium with new products such as digital cameras, portable digital music players and digital TV sets being promoted with strong marketing efforts. Apple, for example, had spent almost $75 million through January 2004 in measured media for its iPod MP3 player, which launched in 2001.

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