IBM's strategy keeps it in and on demand

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Headquarters: Armonk, N.Y.
Brand established: 1924
2003 advertising: $427.8 million
Brand equity: $25.5 billion
CoreBrand ranking: No. 6
Roth: “This company has successfully reinvented its brand at least two times in the past 10 years.”
Ries: “The dominant brand in, first, mainframe computers and now high-tech
Gregory: “Their brand is obviously strong and valuable, but there is a great deal of arrogance with them. I don’t think any company can afford to be arrogant these days.”
Ries: “IBM needs to slim down by getting out of some businesses (personal computers, for example) in order to concentrate its resources on its more profitable products.”

IBM Corp., which was called a "big blue dinosaur" in the 1999 Fortune 500 issue, ranked third in this year's BusinessWeek /Interbrand report on top global brands, demonstrating a remarkable ability to turn its brand image around.

In the past decade, IBM has built its brand to a leading worldwide position by keeping its business relevant to changing times and effectively communicating its positioning through integrated marketing communications.

"Ten years ago, IBM was in pretty deep trouble with its brand and brand image around the world," said Lisa Baird, VP-worldwide integrated marketing communications for IBM. "It was a crisis time for the brand. The brand had become irrelevant."

As part of its strategy to reinvigorate the IBM brand, once known as a mainframe giant, the company consolidated all its global advertising business with Ogilvy & Mather Worldwide, New York, in 1994.

Under the direction of then-chairman-CEO Lou Gerstner and senior VP-marketing Abby Kohnstamm, IBM and Ogilvy set a new course that would define the company's brand strategy going forward.

Sam Palmisano, who was named CEO of IBM in 2002 and elected chairman in 2003, unveiled the new strategy of "e-business on demand" at a shareholder meeting in late 2002.

The strategy positioned IBM as a company that understands the needs of its business customers and can provide a total portfolio of products, services and consulting advice.

Working with Ogilvy on a 360-degree marketing communications strategy, IBM has effectively used TV, print, outdoor, events, sports sponsorships, online and non-traditional media to communicate its brand positioning.

"IBM has a heritage of being a traditional company, yet it has a radically progressive agenda," said Matt Ross, COO-IBM brand services worldwide at Ogilvy & Mather. "It presents some interesting brand challenges."

One of IBM's key media strategies is to deploy traditional media in radical new ways, Ross said.

For example, IBM is using video online to communicate its brand message to an audience of IT and business decision-makers. It has partnerships with, and other Web sites to deploy interactive video interviews with key IBM executives and other content to connect with its target audience.

"When we are trying to reach loyalists for a given server platform, it wouldn't be economical to deliver the message using traditional TV," Ross said.

IBM also uses sports sponsorships and huge events to build its brand. As the technology provider for the U.S. Open tennis tournament this year, IBM delivered real-time scoring on a large interactive billboard in Times Square, as well as on traveling vans in New York.

"It is a real live demonstration of our business consulting and technology expertise," Baird said.

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