Apple expects to cut ad spending by less than 10% for the fiscal year starting in October, said David Roman, VP-corporate advertising and brand marketing. Apple this year will spend about $200 million.
Ad and marketing budgets will hold up well despite the mandate by new Chairman-CEO Gil Amelio to slash costs companywide, Mr. Roman said, explaining, "Marketing costs are one of the things that Gil doesn't want to cut."
CEO AMELIO'S THEMES
In advertising beginning this fall, Apple will promote three of Mr. Amelio's themes: Apple's "comeback"; how its technology fits with "industry megatrends" such as convergence of computing and communications; and how customers benefit from the uniqueness of Apple products.
The marketer may create a new tagline; it has used "The power to be your best" on and off since BBDO won the account 10 years ago.
Apple over the next year will try to convince customers, the media and Wall Street that it's on the road to recovery by highlighting its progress-improving profit margins or sales, for example.
FITTING IN WITH `MEGATRENDS'
With "megatrends," Apple will try to show it's compatible with the future rather than stuck on proprietary technologies.
Mr. Roman said Apple will promote alliances with tech leaders such as Netscape Communications, Oracle Corp. and Sun Microsystems.
"This is where we see a lot of the advertising dollars going," Mr. Roman said.
Apple will also claim its uniqueness with the "customer delight" theme, looking at how areas like superior industrial design benefit users.
Also, Apple may release a low-volume showcase product later this year that it will promote as an example of superiority.
Apple is considering whether to combine the three themes into one global corporate TV, print and Web campaign, or give each theme a separate campaign, said David Lubars, president of BBDO's Los Angeles office. In addition to corporate ads, the themes will be used in product advertising, Mr. Roman said.
Apple hopes for more focused advertising. Just 18 months ago, BBDO Exec VP Tom Hollerbach noted, Apple was diffusing its message with 30 U.S. campaigns.
Apple and the agency still are working on strategies, though Mr. Roman said ads could play into where Apple is going as the company enters its third decade. Its low stock price has fueled takeover talk.
The future of Apple and of the BBDO relationship appeared rocky earlier this year, but both now show signs of some stability.
Apple's sales fell 15% to $2.2 billion for the quarter ended June 28, better than pessimistic reports had predicted, and its $32 million loss was lower than expected.
In the strongest affirmation of BBDO in months, Mr. Roman said: "We are not open to considering any other agencies...If we were looking around today on the open market, I would say BBDO is as good as any other" shop.
BBDO ads promoting tie-ins with "Mission: Impossible" and "Independence Day" have been "outstanding advertising," he said.
Mr. Roman said he's been approached by "dozens" of agencies, but "There really isn't an opportunity at this stage" to get the account, though there may be chances for projects. Mr. Roman said he expects to sign a new contract with BBDO when the current one expires in September.