Interestingly, the world's top PC marketer will pay for the campaign with money from Intel Corp.'s co-op program, though ads won't mention Intel. Compaq may tap some of its own $100 million-plus product ad budget.
The initial campaign will target businesses, aiming to change the perception of Compaq from a "box company"-a source for computer hardware-to a "solutions" company that can deliver a package of hardware, software and services. In pitching solutions rather than just products, Compaq follows the lead of such rivals as IBM Corp.
"Customers are looking for companies that can put it all together," said VP-Communications Jim Garrity. "They don't think of us top of mind as a company they want to turn to for total enterprise solutions."
Compaq will aim to build consumer awareness during a second phase, the timing of which hasn't been determined.
The marketer entered the home PC market three years ago and set a goal to get half its business from consumer sales by the year 2000. Compaq this year is selling 25% of its PCs to consumers. With the convergence of computers and consumer electronics, Compaq finds itself competing with better-known brands; Sony Electronics is entering the U.S. home PC market this fall.
Mr. Garrity and Director of Advertising Kathleen Harrington cautioned that creative, media and budget plans haven't been finalized for the multiyear effort.
SPENDING $20 MIL IN FALL
Compaq is likely to spend $15 million to $20 million this fall and some $40 million next year; the two executives would not confirm the estimates.
Mr. Garrity said the campaign will include global print, TV in some countries and Internet ads linked to Compaq's World Wide Web site (http://www.compaq.com). Compaq began its first Web campaign last month.
Compaq quit the Intel co-op program in 1994, when Mr. Garrity complained the "Intel inside" logo detracted from the Compaq brand. But it put the Intel logo back in product ads early this year, leaving IBM as the only major Intel-standard PC marketer not to take the lucrative 6% co-op rebate on chip purchases.
Compaq will now use co-op money from product ads featuring the Intel logo to pay for brand ads that won't mention Intel.
The brand campaign will be done on a collaborative basis, with none of Compaq's four main global agencies taking the lead.
Ammirati Puris Lintas, New York, handles Compaq in North America; Bates Europe, London, manages Europe, the Middle East and Africa; Euro RSCG Ball Partnership, Hong Kong, oversees Asia Pacific; and Hakuhodo, Tokyo, handles Japan.
"It will be more than one agency initially," Mr. Garrity said, adding he has mulled the idea of selecting one global agency.
IBM, Digital Equipment Corp., Intel and Microsoft Corp. have turned to single agencies for global campaigns. Some computer media executives and an executive close to a Compaq agency think it's only a matter of time before Compaq consolidates.
Conflict from converging clients could drive the issue. Compaq agency Euro RSCG, for example, is the global agency for Philips Electronics, which markets computer monitors and Internet access devices.
Compaq has considered setting up a global communications function, but for now it is continuing its regional approach to ad management.
The global brand campaign will be coordinated by a worldwide marketing board made up of product and geographic marketing executives.