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 user 2007-08-29 at 12:45:00 pm Views: 43
  • #18658

    HP’s Bold New Printer Marketing
    The company’s new ad campaign features Gwen Stefani and stresses self-expression. But will it boost sales?Can giving away designs and photos from a blonde bombshell get people to print more?
    Hewlett-Packard is betting big on it. In HP’s latest attempt to spur printer sales growth, the company on Aug. 28 is unveiling its largest-ever advertising campaign, anchored in part by singer and artist Gwen Stefani. Unlike past marketing strategies that have emphasized prices and hardware, the new effort plays up notions of “self-expression” and “communication” through printing. It features free online material developed by Stefani and other creative professionals.The advertising effort is part of a broader strategy within HP to keep the printer unit’s revenue increasing at a rate of 4% to 6% a year amid rising competition from digital technologies and a slowdown in overall demand for printers in some markets. HP’s printer division generated $26.7 billion in sales in the fiscal year that ended October, 2006. Within HP, the focus is not merely on “printer units sold” but on “share of pages printed,” executives say. That mentality, says Vyomesh Joshi, executive vice-president of the printer business, helps managers think broadly about the many kinds of materials that customers print, from photos and party invitations to business stationery to marketing and advertising materials. “It’s billions of pages,” he says. “We want to go after everything.”

    Stefani as Saleswoman
    Whether that shift in mentality actually helps HP ultimately boost sales volumes and profits is uncertain, but its new advertising clearly emphasizes the act of printing over the printers themselves. Using the tagline, “What do you have to say?,” TV and billboard ads play up the idea of creative expression and direct viewers to HP’s Web site, where, HP says, the heart of the campaign lies. On pages devoted to Stefani (hired by HP’s camera business as a celebrity endorser in 2005), customers can view and download photos that she has provided exclusively to HP. Consumers can use those free photos, some of which show Stefani performing, to create scrapbooks—say, of a particular concert they attended. The site also offers some of Stefani’s designs for birth announcements, greeting cards, CD covers, and paper dolls. At another page on the HP site aimed at small businesses, customers wanting to design stationery or business cards can download free fonts and templates provided by New York graphic designer Paula Scher.

    HP, which expects the printer campaign to last at least several years, is spending $300 million on the effort in the first year. The company as a whole spent about $472.1 million on advertising time and space in 2006, down 7% from the prior year, according to tracking firm TNS. The printer effort follows the company’s successful “The computer is personal again” campaign for PCs, which emphasizes how celebrities and other high-profile businesspeople, including wedding-gown designer Vera Wang, use HP equipment. That campaign began in mid-2006.Some analysts say playing up the HP brand and the experience of printing is a smart move. For a printer company, “it’s a tough proposition to be different, since all printers look the same,” says Allen Adamson, managing director of branding firm Landor Associates, a unit of WPP Group (WPP.L).

    A Crowded Field
    HP, based in Palo Alto, Calif., is the world’s top supplier of printers and printing supplies. But it is facing rising competition. An increasing number of upstarts are offering online photo printing and photo-bookmaking services. Then there are the digital photo frames that let individuals download photos directly to a frame, bypassing the printer altogether, says Michael Megalli, partner at New York marketing consultancy Group 1066. Some analysts point to competition from Eastman Kodak (EK), which earlier this year introduced printers that use lower-priced replacement ink (see, 2/6/07, “Kodak Launches a Printer Offensive”). Joshi, however, insists that HP hasn’t felt any impact from Kodak’s moves. In laser printers, HP holds a 55% worldwide market share as of the first quarter of 2007, according to research firm Interactive Data (IDC), far surpassing the 10% share of second-ranked Samsung. In inkjet machines, too, HP’s share is 45%, compared with second-place Canon (CAJ), which holds a 26% share.Those top rankings suggest that HP’s old product-focused advertising wasn’t ineffective. But HP is convinced it can cast printers in a different light. Says Steve Simpson, creative director at San Francisco ad agency Goodby Silverstein & Partners, which created the new campaign, “Our job is to change behavior and give customers more ideas on what they can print. It’s a very broad idea of printing.”