Reuters Summit-Tech execs say advertising back in style
Friday February 27, 1:44 PM EST
By Michele Gershberg
NEW YORK, Feb 27 (Reuters) - Technology advertising, which slumped with the dotcom bust, is back in vogue as U.S. computer and networking companies regain revenue growth and venture into new product categories.
Technology executives attending the Reuters Technology, Media and Telecommunications Summit in New York this week said they have increased ad spending this year, but are much pickier about how those dollars are used.
They said well-focused marketing will be key to spurring growth in an improved environment for business technology spending, as well as explaining to consumers products that range from security for computer networks to printers for digital cameras.
Advertising spending for technology is dwarfed by that for traditional consumer products like automotive and packaged goods, but its revival is part of an ad industry rebound. Telecom ad spending is expected to grow 5 percent to 6 percent this year, according to industry analysts.
Xerox Corp (XRX) Chief Executive Anne Mulcahy said the office equipment company has raised advertising spending by 5 percent to 10 percent, with a focus on direct marketing targeted for customers and brand campaigns.
"We pick our shots these days," Mulcahy said. "Marketing now is always about return on investment. There's very little 'trust me" kind of spending in marketing any longer."
Mulcahy said Xerox would end its sponsorship of the Olympic Games after this summer's event in Athens, capping off a decades-long relationship in favor of a variety of marketing events.
Dennis Powell, chief financial officer at Cisco Systems
Cisco's ad budget is estimated at $160 million, with new ads under the tagline "This Is The Power Of The Network. Now." Powell said marketing outlays could rise with the rollout of consumer products through Cisco's Linksys home networking unit.
"It does help create demand generation, and that's what we're concerned about," Powell said.
WIRELESS, TECH AND MEDIA PACTS FUEL RISE
Spending will get added momentum from this year's battles in the telecommunications and technology sectors, including competition for wireless subscribers, the cable and satellite wars, and new deals to integrate entertainment with consumer devices, advertising executives and industry analysts said .
Julia Mee, director of global advertising at Hewlett-Packard Co. (HPQ),said HP has overhauled its brand message over the last year to explain to business customers and consumers the breadth of products available since the company's 2002 acquisition of Compaq.