How Qualcomm Is Trying to Make the Leap to Consumer Brand
Mobile computing cemented Apple and Samsung as household names while the company that made the processors powering their smartphones went largely unnoticed. But now Qualcomm is out to transform itself from a relatively obscure b-to-b company to a widely recognized consumer brand on par with Cisco, GE and IBM.
"More and more consumers are starting to care [about] and be interested in the technology in their devices," said Dan Novak, Qualcomm's VP-marketing, PR and communications. "You can say Qualcomm is an unknown brand, and we still are to an extent, but early adopters are still concerned about what's inside phones."
Qualcomm is trying to tap into that interest with marketing initiatives including a branded tech blog; native ads; Facebook campaigns; a partnership with Major League Baseball to enhance smartphone connectivity in ballparks; integrations with blockbuster sci-fi films; a smartwatch; and its first major video-advertising campaign -- a commercial for its Snapdragon processors that ran during the 2013 NBA Finals.
The San Diego-based company essentially wants to be to smartphones what Intel is to PCs. That's part of the reason why it hired 24-year Intel vet Anand Chandrasekher in August 2012 to be the first chief marketing officer in company history.
Advertising spending has shot up during his brief tenure. Qualcomm spent more than $9 million on measured media in the first half of this year, more than triple what it spent during the same period a year earlier ($2.49 million), according to Ad Age DataCenter. Qualcomm's media presence is likely to increase with DDB San Francisco, its first corporate image agency, expected to debut new creative in the coming months.
But questions remain whether these efforts can boost the image of a behind-the-scenes player. "We see the trend for how consumers choose devices going away from features and functions," said Gartner research director Brian Blau. "They're basing their choice often on who the manufacturer is. These are big hurdles for Qualcomm to overcome."
Its Snapdragon commercial aside, Qualcomm has not bought much traditional ad space. The company has instead opted to integrate its products into entertainment and news media, or create its own.
Qualcomm launched tech blog Spark in early 2012, its foray into the nebulous world of "brand journalism." The site has a four-person editorial staff that discusses news items each morning and contracts outside journalists for articles, Mr. Novak said. The company ran a native-ad campaign for its Snapdragon processor on Mashable earlier this year that drew the attention of the Council of Better Business Bureau's National Advertising Division -- for negative reasons. The self-regulatory body of the marketing industry, which is backed by agencies and marketers, investigated the 20-article series, called "What's Inside?", after Mashable removed the "sponsored by" label from the stories. The NAD ultimately determined that the series was properly identified. A Qualcomm spokesperson declined to comment on the series.
Qualcomm also ran co-marketing campaigns for "Pacific Rim" and "Star Trek Into Darkness," two of last summer's most high-profile films. It created mobile apps for both films and the robots in "Pacific Rim" were powered by Qualcomm technology.
"There needs to be a technology play [in its marketing decisions]," said Mr. Novak. "Qualcomm's approach is not to just go buy banners or a traditional sponsorship approach."
Qualcomm first noticed consumers researching its processors in 2010, said Tim McDonough, Qualcomm's VP-marketing for mobile and computing, when U.S. smartphone penetration was only 20.2%, according to eMarketing. Today, just more than half (50.1%) of Americans have smartphones, giving Qualcomm more reason to try to broaden its appeal.
"The tech elite, that's where we started." Mr. McDonough said. "When going for mainstream consumers, you need to not just make a technical connection, but an emotional connection with them."
Qualcomm fumbled an opportunity to do that when CEO Paul Jacobs delivered the opening keynote at the Consumer Electronics Show this year, an honor typically reserved for Microsoft.
The presentation began with actors portraying stereotypical millennials ham-handedly talking about their smartphone habits with appearances by Big Bird, South African civil-rights activist Desmond Tutu and Microsoft CEO Steve Ballmer. The tech blogosphere erupted, but not in the way Qualcomm had hoped it would.
"It was just odd," Mr. Blau said. Mr. Novak, who developed the programming, said the overall response was positive. "It's subjective," he said. "The opening isn't the entire keynote, it's the opening. ... There's going to be people who don't like it, and frankly, I'm not going to be afraid to try something."
Most consumers, whether they know it or not, are already taking advantage of Qualcomm technology. Qualcomm's processors run in many high-profile mobile devices, including Samsung's Galaxy S4 and Note 3 smartphones, G2 smartphone, Amazon's Kindle Fire HDX tablet, Google's Nexus 7 tablet, Motorola's Moto X smartphone and Apple's iPhone 5s.
In the end, the success of Qualcomm's consumer marketing is measured by whether consumers buy smartphones that use its technology. "If our OEM customers know that when they put a Snapdragon chip in their phone that it'll sell better or faster or at higher premium, my team has done our jobs right," Mr. McDonough said.
And if Qualcomm is successful at branding, more marketing dollars could flow from the usually b-to-b-focused chipmaker world. It could "force their competitors to have some kind of response to this," said Mr. Blau.