Dell gets down to specifics

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Dell Computer Corp. today launches a major ad push designed to convey the specific benefits of its direct sales model to medium and large businesses, many of which have stalled purchases of computer products and services given current economic conditions.

Ads appear today in Dow Jones & Co.'s The Wall Street Journal and other newspapers; a spot breaks tonight on Walt Disney Co.-owned ABC's "Monday Night Football."

The effort, promoting servers, storage systems, applications, operating systems and tech services, is the first creative campaign conceived wholly by Omnicom Group's DDB Worldwide, Chicago, which won Dell's more than $200 million consolidated ad account in April. DDB's work for Dell's Home and Small Business Division over the last few months, including the quirky "Steven" spots touting PCs, represented a continuation of a campaign created by Dell's previous agency, Interpublic Group of Cos.' Lowe Lintas & Partners Worldwide, New York.

Dell declined to disclose spending for the new enterprise effort in the U.S., which includes print, TV, online, direct mail and other media. However, the company spent $195 million in the U.S. in measured media in 2000, and $97.9 million from Jan.-June of this year, according to Taylor Nelson Sofres' CMR. The company plans to launch the effort in Germany in November.

"We own the [direct] model, everybody knows that, but customers want to know `how does the model benefit me?"' said Scott Helbing, VP-global brand strategy for Dell. The direct sales model, now widely adopted by major PC marketers, has long been Dell's hallmark. Now, the challenge for Dell, analysts say, is to hold or grow market share amid a sluggish economy and grow revenue in more promising segments such as storage. Dell derives about 80% of its sales from desktop and notebook PCs.

Dell's campaign targeting tech professionals and Fortune 1000 executives includes three product-as-hero TV spots; two more are in development. In "I Am," the Dell server speaks to the viewer, suggesting that by all appearances it is a server, "but look deeper, and you'll see that I'm an entire company." The spot suggests that Dell servers add value to businesses, not cost.

Another spot touts Dell's ability to customize, pretest and preload critical software applications onto companies' systems. A third spot promotes Dell's specialized service teams. The spots will run on cable news, sports and business programming; print includes technology titles and business magazines. Shot in black and white, the campaign continues the "Easy as Dell" tag line.

The weakened climate for tech spending makes Dell's campaign all the more relevant, according to Mr. Helbing. "The business model allows us to produce products cheaply, and if [customers have] less money, [they] have to make it work harder. That's when we think the direct model is at its best."

Salomon Smith Barney analyst Richard Gardner maintained PC and PC-server shipments related to the Sept. 11 terrorist attacks should be "largely immaterial for the industry." Mr. Gardner's post-attack report stated, "We also fear that further deceleration in corporate and consumer spending will more than offset this repair-related demand."

Others believe the services segment, including maintenance and integration, will grow. "This is spending that is not easily postponed or shut off, in spite of severe business disruption," said John Gantz, chief research officer at International Data Group's IDC, in a report after the attacks.

Dell's stock has slumped with the market, but the company's strengths and momentum give it an edge over rivals; Dell's $47 billion market capitalization is greater than the combined values of rivals Hewlett-Packard Co., Compaq Computer Corp. and Gateway.

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