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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 BusinessWeek.com, 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.”
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