Indeed, we live in a world of change. Perhaps now, more than any other period in American history, we are experiencing life in a series of high-speed drive-bys. This applies not only to our increasing length of the workday, the decreasing number of hours we have or use for casual living, and the rapid decrease in traditional print and network media consumption. We live in a world that is rapidly rejecting the 30-second “spot” form of advertising because Tivo’ed programming, web-casts, and YouTube are taking our eyes away from the interstitials.
What advertisers and consumers alike are experiencing is a fundamental change in their relationship. Smart consumers use the internet to research a product prior to purchase. They no longer implicitly trust television commercials and know that there is more information to be gained by reading peer reviews, CNET ratings, and seeing nearly limitless side-by-side comparisons – all from the desk. The significance of this has been, until relatively recently, ignored by the major advertisers. While television commercials continue to garner attention, only those with real entertainment cache get watched.
Without television, what is an advertiser to do? Use the new-media outlets – and that means the internet. For one company, in particular, this could mean something quite significant. Apple Inc. (nee Apple Computer, Inc. ) has long been a significant player in the world of entertaining and innovative commercials. Like their products, Apple Inc. ’s television spots have resulted in critical praise, and the recent campaign of the two men playing “PC and Mac” stand solidly along with the iPod, “Think Different” and the “What’s on My PowerBook” campaigns.
But, as Apple itself has occasioned to observe, the television commercials are not really where the attraction to the product begins – but they act as a reinforcement for current customers. This seems an expensive way to increase loyalty. But, what really works for Apple, according to their own marketing materials, is word of mouth, the Apple Retail Stores, and co-branding of their own products. It is the purpose of this paper to explore how Apple Inc.
can advance it’s marketing cause over the next three years. Understanding the new consumer, rebranding the product line, rethinking advertising, and re-examining the nature of their relationship with advertising agencies are the critical components of this. The first thing that Apple Inc. needs to do, over the next three years, is to address the changing consumer. One has only to look at the web and see that there is an absolute dearth of Apple-related popups, link-ads, hub-sites, and spam.
Of course, most major companies do not engage in these kinds of advertising, but Apple, in particular, has a very limited advertising presence on the web beyond its own websites. What exists, then, in terms of advertising for Apple are the “Hi I’m a Mac, and I’m a PC” and iPod/iTunes/iPhone/AppleTV television ads, and targeted print ads presenting software products. It seems curious, then, that in a world of shrinking audiences for both television and print products, that Apple would put all of its advertising eggs in these two baskets.
But, one cannot argue with the fact that Apple’s market-share in the laptop world particularly has expanded significantly (it has gone from 3% to 6% of the worldwide laptop sales over the past four years) , and has the majority of the MP3 player market (75%) and the majority of legal online music sales (78%), (Apple Inc. , www. apple. com). The only thing that can explain this phenomenon of rising sales, rising market share, dominance in particular markets is the two-fold event of the Apple-Cult and word of mouth (or, in Jaffe’s words, “word of mouse”), (Jaffe, 34).
Today’s consumer does indeed “vote” by remote access – secondary, tertiary, and absolutely spurious sources sit right alongside legitimate primary ones in terms of information available about a given product. People tell lies, spin yarns, tell the truth, explain individualized experiences, and create mills and mini whirlwinds online about products. But, unlike the mass media, there is no truly central place for all of the world to gather information – there is no reliable central repository of the truth about a product beyond its own website – and even then such “truth” is modified by the maker.
Television reaches millions of people simultaneously, and advertisements are a way to reach a gigantic pool of potential customers. But, as has always been the case with advertising, there are very few products that are universally attractive, whose audience is “everyone”. Apple makes products that achieve that rarified position of having an unlimited potential audience and a very real attractiveness that keeps people interested and buying. The consumer, then, of Apple products is not likely to change greatly over the next three to four years.
Though Jaffe envisions significant changes in consumer behavior over that same time period, for Apple, the basic marketing approach of word-of-mouth has translated perfectly to the now and future internet saturated culture. Consumers make an association with cool, quality, and usability with Apple. Because of the long and demonstrated history of achieving these three aspects of their products, the introduction of new products brings the whole cache of the company to bear. Apple understands this, perhaps better than just about any other company in the world – cool sells, quality keeps customers coming, and usability creates a universal market.
Apple has, in effect, leapfrogged the competition. This has not always worked out, but Apple is an innovative company that offers products to the world that, when made in the Apple-way, have a tendency to become the standard by which others produce their own lines. Thus, consumers know now, have always known, and will know in the future that Apple is, even if it is not really, always ahead of the curve when it comes to innovation. No one, clearly, likes to feel left behind and jumping on the Apple wagon absolutely prevents that – without question.
Apple, and their advertising agencies, have proven themselves to be masters of branding. The majority of Apple advertising provides no detailed specifications about their products, and they contain absolutely no pricing information. Instead they present ideas, capabilities, and features about the product. Apple branding is not about individual products, but about the company itself. In the near future, this, also when looking at how Jaffe defines brands, “nothing could seem farther apart than volume brand Dell and the eternally hip Mac,” (Taylor, 32).
Branding means truly developing a unique identity, making sure that it remains unique and fresh, and never slacking off. Being Number One is difficult at best, but staying there, year after year, that’s a true feat. Jaffe suggests that rebranding product lines is a critical part of future advertising – making those products part of the new mainstream which is steeped in technology, is fast, mobile, and responsive – all of which Apple has been and has become. Again, Apple is already there. “Consumers choose brands, not just product attributes,” (Fleischer, 1599).
Advertising, then, is what begins to be the real challenge for Apple. Recognition exists, but getting the word out, and bringing in new customers cannot sustain rapid growth nor can it cause a revolution in how people use their computers – the vast majority of all computers world-wide are using Windows and that is not likely to change over the nest three years. What is changing, however, is the very nature of how products are and should be advertised. Apple, as has been stated, puts all of its advertising eggs in the single basket of traditional print and televised media.
But, it is the use of new advertising media that becomes critical for Apple’s future. Product differentiation exists for the Apple consumer, but much greater micro-targeting will greatly improve the overall position of the company. There was a short-lived but ubiquitous series of televised ads made by Apple in 2001-2002 that had individual people from a variety of backgrounds describe how they use their computers. That campaign did very little to Apple’s bottom line, but it underscored their recognition that targeted-marketing would be critical to their success.
Apple’s customers are not differentiated into many different categories: education, creative professionals, average consumers, and IT customers. In these four basic categories, Apple produces specific targeted promotions. The customer base of the future, however, may not pay attention to these broad categories of promotion. Instead, they may be spending more time looking only at the media outlets that have the greatest personal appeal – and that means specialization. The iPod appeals to everyone, the Macintosh OS, and Apple computers, perhaps, do not.
Advertising now focuses on the cool, ease of use, and power of the tools. So, in the world of increasingly shrinking audiences and the emergence of boutique distribution channels is paving the way for Apple to sell not en masse, but in small quantities among the unlimited number of sub-categories of consumers. “For small production crews wanting to shoot and edit in the field and those, like myself, who love the idea of being a one-person mobile video making band–camera in one hand, laptop editing suite in the other–the new MacBook may prove an excellent choice,” (Jones, 137).
Thus, creating custom systems, or at the very least custom marketing packages to present to small groups like independent filmmakers who edit in the field, or biologists, or teachers, or newscasters, etc, Apple will be able to reach the same number of people that currently watch television ads, but just in smaller groups and in many more instances of presentation. Another example of this kind of promotion opportunity is retraining people to think of a Macintosh as more than just an easy computer to use, but as a tool that they specifically can easily turn to their own individual unique use.
Apple has an excellent history with relationship marketing, and through that has experienced a high degree of Return on Investment and Return on Sales Enablement. What they don’t have, however, is an approach that seems on the surface to be splintered and perhaps even schizophrenic. Imagine a business model where instead of geographically divided regional marketing teams, there are market segment dived teams. Individuals or small groups of people dedicated to promoting the product to the smallest of organizations – tool and dye makers, ambulance companies, culinary schools.
Rather than advertising to broad categories of businesses and individuals, Apple will need to hyper focus on these smaller groups because, in the future, they won’t be paying attention to mass media, they’ll be watching their trade journals, their focused websites, and that word of mouth that exists in their own online communities. The advertising agency approach, too, must shift along with this changed reality. Individual companies are able to reach out to consumers, do their own market research, and examine their consumer base along some fairly broad lines.
But, in seeming opposition to the kind of marketing necessary now and tomorrow, advertising agencies are likely to need to be as large, as comprehensive in their scope as the behemoth agencies today, but will do so not with a bludgeon of television and print ads, but with a flexible, responsive staff of “integrators” (Jaffe, 10-17). Understanding how to leverage mass-appeal to the smallest of levels – the individual, and all of the cross-promotional opportunities that exist by tying product to group, means success.
“Apple officials have recently reached out to colleges to try to encourage educational uses for iPods. The latest example is iTunes U, a program that encourages colleges to distribute recorded lectures and other course materials using the company’s free iTunes software, which is used to manage and play music and video files and to transfer them to iPods,” and this was due to suggestions from advertising agencies thinking big and small at the same time (Young, 28).
Apple, in 2010, is likely to continue to be seen as the innovative, cool, exciting, and hip company to be associated with. It has a proven track record of success in all of these areas and its marketing does now and will in the future be responsive to the avenues of opportunity for those customers who are looking to be ahead of the pack. Apple is a relatively small company that thinks and acts very big – and has had major success in doing so.
Branding, marketing, and the use of smaller-scale but larger thinking advertising agencies will all go toward continued success for this company.
Apple Inc. www. Apple. com. “Hot News” www. apple. com/pr. Acc. 2 May, 2007. Fleischer, Victor. “Brand New Deal: The Branding Effect of Corporate Deal Structures”. Michigan Law Review June, 2006, 104:7, 1581(57). Jaffe, Joseph. Life After the 30-Second Spot. Hoboken, NJ: John Wiley & Sons, 2005. Jones, Mike. “Bearing Fruit: Apple Reinvents Itself Again”. Australian Screen Education Autumn, 2006; v42, p136(2).