Intel Inside at 10

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With the slowing global economy and sluggish sales of personal computers, where does Intel Inside go from here?

A decade ago this month, Intel Corp. formally launched a global marketing program to make people care about the microprocessor, a virtually unknown but essential piece of silicon that powers the PC. The task of branding the guts of the PC became known as Intel Inside, the world's biggest co-op advertising program with funds projected to reach $1.5 billion globally this year.

The program's war chest, funded by the combined spending of Intel and computer marketers, helped fuel growth of the PC industry. But with the slowdown in PC sales, the Intel Inside program has reached beyond tie-ins with PC marketers to server products and the e-commerce arena. Intel executives maintain the program is evolving to stay relevant.

For example, last year, the program entered the e-commerce arena where a majority of the largest PC marketers now have Intel branding in their online stores. Also new is the Intel Inside Online Network, an e-business system within Intel that helps the company transact business between it and 2,700 customers worldwide. The Network allows PC makers and other Intel customers to transfer co-op funds, process claims online, check fund availability and review monthly statements. The program was also extended to servers with Intel-based architecture.

"We're seeing one of the major trends is that there is a lot more volume in the server space now," said Dan Cohen, director of the Intel Inside program.

Indeed, in the last couple of years, server product advertising has exploded, and more than 20% of Intel Inside monies fund server-oriented advertising.

Dennis Carter, the architect of the Intel Inside program and now retired from Intel, was optimistic about it from the start. "The whole point was to draw attention to the ingredient that was buried deep in the computer," he said.

In 1989, Mr. Carter and a small marketing team including Ann Lewnes, now Intel's VP-consumer marketing, began a test in Denver -the "Red X" campaign-to jumpstart its slow-selling 386SX chip.

"He [Mr.Carter] said we had six months to demonstrate the program," Ms. Lewnes recalled. "We did this incredible guerilla marketing effort, print advertising, retail, billboards ... [I thought] `Oh my gosh, we can actually do this.' ... We were a traditional kind of business-to-business technology manufacturer and a lot of people probably looked at us and said `These guys are crazy,"' she said.

Success in Denver led to a formal launch of a co-op program in April 1991, when IBM Corp. ran the first ad-partly funded by Intel-featuring the "Intel Inside" logo.

Some industry analysts and observers think Intel should further segment the program, creating sub-programs for different types of processors that power a new range of devices beyond the PC. So, Intel Inside the fridge? The debate over whether to extend the Intel Inside program, the cornerstone of the Intel brand beyond PCs, is ongoing.

"Those are discussions that we always have," Mr. Cohen said. "We always are looking at new ideas, but we really see the Intel Inside brand ... [standing for] quality and reliability and technology leadership, it really focuses around computing services-PCs and servers. There's a limit to how far you can stretch the Intel Inside brand. ... To take it to every product that Intel makes would dilute the brand and confuse consumers."

Ms. Lewnes, too, says the possibility of extending Intel Inside to products other than PCs or appropriating the funds in a different way is "an issue we continuously explore." Both she and Mr. Cohen maintain there's plenty of growth left in the PC market and evangelize Intel's latest technology imperative-marketing the notion of the extended PC.

The concept, introduced by Intel and Microsoft Corp. in January, emphasizes the addition of peripherals such as digital cameras that allow consumers to get more utility and fun from a PC. The concept is celebrated in advertising for Intel's newest processor, the Pentium 4. Havas Advertising's Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York, handles Intel advertising.

Mr. Carter, the mastermind of the co-op program, left the company with its most enduring brand asset and some decisions to make in the future. "Would it be possible to expand [Intel Inside] to other devices? Certainly it would be. Would I advocate that? I never did; I didn't think that was appropriate," he said, adding, "During my tenure in the `90s it certainly was proposed often. ... The problem with that is it becomes a kind of watered down message. ... The more specific you are, the more value it has."

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