COMPUTER REPORT: The Web Insiders - Four of the biggest online computer spenders discuss their strategy and offer insights into the potential of net advertising. By Robert Dwek

GATEWAY 2000 - UK web site: www.gateway2000.co.uk

GATEWAY 2000 - UK web site: www.gateway2000.co.uk



Gateway claims to have beaten Dell on to the net with its direct sales

model and delightfully named ’configurator’. This is a jazzy piece of

software that allows users to customise their purchase or add and remove

items from their shopping basket while viewing an instant read-out of

the total price.



Gateway’s global sales via the net are dollars 4.3 million a day.



Laurie Pick, the internet marketing manager at Gateway, says: ’We’ve

been advertising online in the US for more than a year and started

advertising in five key European markets this year.’ These are the UK

and Ireland, the Netherlands, Sweden, France and Germany. ’Our ads talk

about our products, their price points and the configurator,’ Pick

adds.



Gateway says its choice of website to run banners mirrors its print

advertising strategy, which means an online equivalent of computer

magazines.



Gateway is traditionally stronger than Dell in the consumer market and

weaker in the business market, but it is looking to strengthen its

position in the latter, and the internet will play a key role in this

new strategy. The company has created six different websites for

Europe.



Online work is handled by a US agency, New York-based Organic Media, but

it may be centralised into McCann-Erickson.



DELL UK - web site: www.euro.dell. com/intl/euro/countries/uk



Dell has been hogging the headlines lately with its dazzling figures for

direct sales over the internet: dollars 6 million a day worldwide and

dollars 1 million a day in Europe.



Dell’s European arm, which is based in Ireland, has been running online

ads since May last year and has remained with the same specialist

agency, Aardvark. ’The agencies that represented us in traditional media

weren’t strong on the internet, so we went for one that focused on web

technology and software,’ Aine O’Dwyer, the internet marketing manager

for Dell UK, says. ’It is also proficient in things like file sizes,

animation and analysis.



’Unlike a newspaper ad, the work doesn’t stop once you see your banner

ad on the website. This is a very technical area, which requires



constant monitoring.’



Dell UK’s online spend has increased in line with its overall marketing

budget but it has remained almost static for the past six months. ’We’re

not into massive spends for short periods but prefer to maintain a

consistent level,’ O’Dwyer says.



’Bear in mind that Dell is much more focused on the direct sales model

than many other brands, so the purpose of our banner ads is to generate

awareness of the website and its online store rather than simply to push

the Dell brand.’



Dell’s banners can be found on a mix of high-traffic websites such as

search engines (appearing when keywords such as ’computer’ are tapped

in), directories and IT-based websites. O’Dwyer says the last tends to

be a lot more expensive than the others, but it is a key market. Dell

also appears on ’portal sites’ (intended as a point of entry for the

web), such as MSN.



HEWLETT-PACKARD - UK web site: www.hp.com/uk



Ian Ryder, the director of brand management and communications at

Hewlett-Packard, is an Englishman who spends much of his time at the

company’s Palo Alto headquarters. But while he may have adopted the

Silicon Valley enthusiasm for all things wired, he remains resolutely

un-Californian when discussing the potential for online advertising.



’E-business is not to be confused with web advertising,’ he says. ’They

are two completely different things. Hewlett-Packard is evangelical

about the former, but using the internet as an advertising medium will

mean cutting the advertising cake into even smaller pieces rather than

replacing any other form of advertising.’



Although H-P is one of the biggest online advertisers, with an estimated

spend of dollars 5 million to dollars 6 million a year, it doesn’t have

a centralised internet advertising division. Responsibility for this

area is delegated to more than 80 different product divisions. ’We have

no overall strategy or policy regarding which websites to advertise on,’

Ryder says.



When pushed, he does list a few favoured websites: Cnet, Zdnet, Wired,

Pointcast, Microsoft, Pathfinder and CMPnet. He also reveals that the

company is developing a series of banner ads for use with search

engines. Recent H-P research shows its name appeared more often than

that of any other corporation as a keyword search. The H-P website

claims more than ten million hits a day, making it one of the most

visited sites.



Ryder’s scepticism about online advertising may subside, as he is now

’in the process of developing an overall brand strategy, which will

encompass web advertising’.



IBM - UK web site: www.uk.ibm.com



Big Blue is very big on the net, consistently topping the Fletcher

Research adspend tables (its notable absence from the April list was,

apparently, an error).



Brenda Jones, the director of marketing for IBM’s North Region, says

online spend is a key part of the marketing mix, although she won’t

reveal exact figures. IBM’s banner ads feature on 20 web sites,

including FT.com, Yahoo, Alta Vista, Lycos and the Evening Standard’s

This Is London. All online advertising is handled by the new-media

offshoot of IBM’s ad agency, O&M.



In addition to its ubiquitous banner ads, IBM has gone heavily into

website sponsorship, particularly during major sports events such as

Wimbledon and the Nagano Winter Olympics. ’These bigger projects have

been very useful for testing the scalability of our software (its

ability to cope with increased numbers of hits),’ Jones says. This

year’s Wimbledon helped IBM break its own world record in terms of hits

per minute - 146,000 on 3 July - which it had previously set during

Nagano.



IBM’s recent TV and press advertising has highlighted its new focus on

e-business, encompassing software and service technology as well as

IBM’s traditional hardware bias. The internet is ’absolutely core’ to

this strategy and a bespoke website has been set up at

www.ibm.com/e-business.



For Jones, like many of her industry colleagues, banner ads are not so

much an alternative to traditional ads, but rather a supplement. ’You

have to go back to the original objectives of your marketing campaign to

see which medium is best suited to your needs,’ she says.



’While banner ads are demonstrably easier to evaluate than TV, the

latter is still the best way of establishing and reinforcing brand

image.’



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