Persuasive positioning: Geeks leading the way

August 3, 1998

BY MICHAEL KRAUSS

Mr. Trout, meet Mr. Sviokla.

Positioning, as we all learned from Jack Trout and Al Ries, is the battle for share of the customer's mind. Positioning is about securing a worthwhile place in the mind of the prospect.

These days, when differential advantages last for just milliseconds and competitors seem to copy your moves and countermoves almost before you've conceived them, positioning may be the most potent form of differentiation left to marketers. When product differences get scarce, your image may be all that counts.

Technology marketers-not fast food providers, beverage brewers or shoe makers-seem to be showing us the way these days. Some of the hottest ads and most sought-after accounts on Madison Avenue are those of technology companies. The Internet itself is proving to be a vital tool to position all kinds of products and services, high tech and otherwise.

It sure wasn't always this way with the techno-crowd. Product used to be the only thing.

Take the Digital Equipment Corp. Back in DEC's heyday when they ruled with their VAX minicomputers, I sat next to DEC's founder and then-CEO Ken Olsen at dinner one night in Boston and asked him why he didn't advertise. Olsen said, "I don't need to. Our products sell themselves." He admitted to doing a few print ads and some tasteful things on PBS.

Ten years later, a floundering DIGITAL sold itself to Compaq, the upstart personal computer manufacturer. Positioning itself as the lower-cost personal computer company, Compaq knocked IBM off its throne in the '90s, and with the help of computer retailers, established itself as the No. 1 PC provider.

Unlike Ken Olsen in the 80s, Compaq's current president and CEO, Eckhard Pfeiffer, believes in positioning. He recently hired DDB Needham to run the merged company's rumored $300-million advertising and positioning effort-an account that Keith Reinhard's team at DDB Needham fought for as if it were the McDonald's account.

So why are all these ad moguls pursuing the high tech crowd? One agency CEO told me that he "learns from the technology group." The message was, "They're smart and they're rewriting the rules."

According to Harvard University Associate Professor John J. Sviokla, our market- place is being transformed into a marketspace, an information-defined space where our previous investments in brand equity and positioning may be supplanted by technology- based upheaval. For example, as ATM networks proliferate, is my brand loyalty going to rest with Citibank or with the Cirrus network? That's a thorny question for Citibank's global advertising agency to chew on.

Sviokla points out that traditionally, content (what we offer), context (how we offer it) and infrastructure (the means we use to produce the product or service) all were integrated. In the new age, these three items can be separated and brand equity built around each. So tomorrow, I may get my content, branded by the Chicago Tribune, distributed in the context of the Internet from AOL, to which I connect over the Sprint "Ion"(Integrated On-Demand Network) infrastructure. Whew, it must be a good time to own ad agency stock.

Then there's the halo effect. Just wrapping my product or service in the high-tech blanket of the Internet provides a positive spin for my brand. Anyone who watched the Chicago Bulls play the Utah Jazz in the NBA finals last spring kept hearing announcer Bob Costas say you could get fuller coverage after the game on the Internet. Sure, some of the hybrid high-tech jock crowd probably hit the NBA.com Web site, but all of the audience came away with the impression that NBC is at the cutting edge. The network is a leader because it's in the Internet game.

During the same series you would have seen yet another way the Internet is changing the rules of positioning: "Web tune-in" advertising. Barnesandnoble.com spent millions introducing and positioning their answer to Amazon.com via prime time broadcast advertising.

Michael Dell, the $7-billion dollar personal computer visionary, also used broadcast television advertising for his "Be Direct" campaign. This cute, clever program features a mouse burning down the maze to get to the cheese. The ads are part of a $70-million campaign to draw viewers to Dell's Internet site to browse and buy. J. Walter Thompson is Dell's advertising agency.

And, we haven't broached the subject of Internet advertising yet. Just for fun, go to www.dilbert.com. You'll read the latest cartoon, and see some Internet billboard advertising.

Thanks to DART (Dynamic Advertising Reporting & Targeting) Technology from DoubleClick Inc. in New York, the ads you see at Dilbert.com will be tailored for you based on your IP (Internet protocol) address and DoubleClick's database of 500,000 mapped networks.

In other words, advertising on the Internet is growing more targeted.

So what does it all mean? It means that technology marketers are rewriting the book on positioning. Extracting value from our products and services is growing more difficult. Technology marketers are showing us future models of how to use positioning and differentiation to improve our value propositions.

It's no longer just the occasional breakthrough Apple commercial or the Intel Inside ads that you should watch. The Internet itself is providing a positive halo for products as diverse as Levi's jeans, Geffen Records or the latest Hollywood feature film.

If you care about positioning trends, keep watching the Internet. There's lot's more to come.

Knowing Jack Trout and Al Ries, I wonder if a new book is in the offing. Could Positioning in the MarketSpace be far behind?

Better add Prof. Sviokla as a co-author, guys.

Michael Krauss is a partner with Diamond Technology Partners in Chicago.
He can be reached at news@ama.org.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 


 

 

 

 

 

 

 

 

 

 








 







 

 


 

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