How Steve Jobs' Apple Married Mass Marketing With Unabashed Creativity
A correction has been made in this story. See below for details.
Apple is a company inextricably tied to the word "new" -- new categories of consumer technology, new distribution models and, of course, when is the new iPhone coming out?
But when it comes to marketing, Steve Jobs has proven to be 100% old-school: back up great products up with creative advertising, big media spending and, don't forget, smart retail.
As Mr. Jobs, arguably the brand's beating heart, steps away from his role as CEO to become chairman, one can only hope his successor, Tim Cook, adheres to the marketing formula that , while far more rotary than iPhone, has helped propel the company to record revenue and profit.
"There's exceptional sentiment that [Apple is ] all about product design and proves that user experience is all that matters," said Noah Brier, cofounder of content discovery startup Percolate and former exec-director strategy at the Barbarian Group. "Then why does Apple spend $400 million on the most traditional kind of advertising?"
Among largest spenders
Apple is among the top 100 U.S. advertisers by spending with $420 million dedicated to advertising last year, according to Ad Age Data Center. What's more, the largest piece of that pie -- almost $200 million -- went to network TV.
Considering Apple billboards are a fixture in any high-traffic urban area -- near Penn Station in New York and along the highway heading east into Chicago -- it's no surprise that Apple is the No. 10 outdoor spender among all U.S. marketers with $33 million in 2010.
"You don't create a massive consumer company with just great product design," Mr. Brier added. "If it was true, they wouldn't go out and spend that kind of money."
To boot, as other advertisers and media buyers focus on performance and efficiency in online advertising, Apple's $24 million in measured internet media most likely went primarily to high-end home-page takeovers on newspaper sites belonging to the Wall Street Journal, New York Times and USA Today. These aren't budget banner buys, but high-profile real estate more akin to the back cover of a magazine.
In another old-school move, Apple has stuck with one ad agency, TBWA Media Arts Lab, for the better part of 30 years. That's a rarity in a world where marketers switch agencies just about as frequently as new iPads come out. Apple and TBWA have been together, on and off, since the "1984" Super Bowl spot.
Illustrating how closely linked Mr. Jobs has been to the marketing and the ad agency, TBWA was replaced by BBDO in 1986 -- that 's one year after Mr. Jobs was ousted at Apple. TBWA came back on the account in 1997, the same year Mr. Jobs rejoined the company.
More than just advertising
But Mr. Jobs' marketing genius embodies more than just advertising. Apple launched its first brick-and-mortar store in 2001, "designed and built to serve as high-profile venues to promote brand awareness and serve as vehicles for corporate sales and marketing activities," according to Apple filings. Since then, those stores have catapulted Apple to be a gold standard in retail, too.
"To go out and compare [Apple] to other retailers, there's not a lot of basis for a comparison," said Stephen Baker, NPD Group's VP-industry analysis for consumer electronics. After only 10 years in the retail business, Apple's more than $5,000 in gross sales-per-square-foot best all other U.S. chains, including high-end jeweler Tiffany's and leather goods retailer Coach, according to research firm RetailSails.
Apple's strategy has also meant retaining solid distribution through third-party retailers. When the iPad first came out last spring, Apple limited distribution to its own stores and Best Buy locations, motivating the big-box retailer to give the new device prime real-estate and promotion in stores.
By the holidays, after iPad had become Apple's fastest selling product in history, it added Target , Sam's Club and Walmart as distribution partners to keep sales rolling.
"People tend to think of Apple as a very pristine brand, but at the end of the day, they're retailers and sellers of stuff," said Mr. Baker. "Almost everything they do is with that view."
Even with such innovations as iTunes and the App Store, whose new channels to distribute content and software made the hardware that much more desirable to consumers, you can't help but think that Mr. Jobs took a page out of marketing's oldest book.
When the iPhone came out in 2007, the "App for That" ads were basically product demonstrations that showed off the apps and their benefits more than the phone. The move echoed a famous ad maxim that recalls how ad agency JWT crafted ads shilling grilled cheese sandwiches so its client could sell more Kraft Singles. In Apple's case, the same principle at play: It shilled apps to sell more iPhones.END OF STORY (ACTUAL CORRECTION)
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CORRECTION: An earlier version of this story said that Apple and TBWA had been together since the "1984" spot. While their relationship dates, back that far, BBDO was given the account shortly after Mr. Jobs was ousted from Apple in 1986. TBWA was brought back on when Mr. Jobs returned to the company.