Philips powers digital line with $100 mil in ads

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Philips Electronics takes the wraps off a marketing arsenal in excess of $100 million as it shifts from broad, brand-building awareness efforts in North America to targeted campaigns that highlight emerging digital products.

The outlay continues the Dutch electronics and household giant's hefty financial commitment to brand efforts in North America, a market considered crucial to seeding acceptance for emerging digital consumer products and services.

The Philips brand, already well-established in Europe, was a laggard in the U.S. -- with the exception of its Magnavox brand -- until spending increased to back the Philips moniker in 1997. The "Let's make things better" campaign, via Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York, has helped make the Philips brand hip and cool, generally earning high marks from consumers and observers.


"Our awareness, image, purchase consideration, brand preference, aided and unaided awareness are up since we started," said Michael Keel, VP-advertising, Philips Consumer Electronics North America. Those preference indicators rose 15% from 1998 to 1999, he said.

"There's definitely been an increased consumer awareness of the Philips brand, where once there was none," said Mike McGann, editor in chief of E-Gear, a consumer technology magazine. "Now they have a lot of awareness, but if they can't get their products into a technology leadership position, it's going to be a waste of money.

"Their creative is on target. Product development isn't," Mr. McGann said. "Nothing they ever do [in product development] is at the head of the class."

This year, Philips will appeal to specific groups of consumers to highlight four cutting-edge product segments: digital MP3 music players and other digital recording solutions; widescreen flat-panel and direct-view TVs; home access devices, including Philips' Personal TV set-top with the TiVo interactive service; and PC peripherals, such as flat-panel PC monitors.


The multimedia push -- including TV, print, online and radio advertising -- will unfurl in the second quarter. It will start with support for cutting-edge home access solutions, such as the Philips Personal TV with TiVo service. Philips also expects to advertise its WebTV products and a set-top box for a premium America Online service at some point this year.

Last year, Philips ran 30-minute infomercials via Tyee Group, Portland, Ore., to explain the benefits of Personal TV, a set-top box that allows users to digitally record several hours of TV programming for viewing later. A forthcoming software upgrade will include advertiser-supported e-commerce capabilities. Philips and TiVo are collaborating on various advertising models.

Creative promoting new widescreen TVs will target 35-to-54-year-old affluent early adopters, while Philips hopes to lure consumers with home offices as well as small businesses to its 15-inch and 18-inch flat-panel PC monitors by the fourth quarter.

A youth-oriented drive is planned around Rush, the company's portable MP3 digital audio player that lets music lovers jam to their favorite tunes downloaded from the Internet. Philips will target trendsetting, tech-savvy 13-to-20-year-olds.

Further, executives are mulling adding two types of marketing little used in the past: outdoor and place-based media. Under consideration are media and product merchandising in venues such as health clubs and hip apparel retailers.


The breadth and proliferation of Internet sites, new distribution channels and marked shifts in consumer behavior have conspired to make media planning something of a challenge.

"It's a brave new world in media. There are lots of choices," Mr. Keel said, referring to hard decisions about media plans that will be finalized within six weeks. "People are on the go and they're not watching TV." In many ways, he said, "Media is starting to drive creative now."

Campaign creative is likely to maintain the same arty, stylized flavor.

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