Analyst Opinion - We seem to be awash in both negative campaigning and stupidity this fall season. I am sure that, at least here in the U.S., there is little on all our minds other than how this historic election will turn out. There a better opportunity to weave that into this week’s column and draw comparisons to the IT world.
I am not a fan of negative advertising. I believe that negative advertising trades trust for tactical advantages and trading a strategic advantage for a tactical one is, in my book, both short sighted and stupid. Sure, negative advertising has its place and for the first year these were done I was actually a fan. But the market has gone south, the Republican presidential candidate has, at this writing, virtually lost because of them, and, frankly, I would like Apple to move on and focus on getting people into stores and sell its PCs as well as Apple sells its iPods.
Apple’s aims at Microsoft and shoots itself in the foot
Apple’s latest Mac vs. Windows spots argue that Microsoft is spending all of its money on advertising and Microsoft is eliminating the Vista name to hide Vista’s problems. Both are not only untrue, but they actually relate more to Apple’s own behavior than Microsoft’s. Microsoft is about to release its second major service pack for Vista to beta and just showcased the follow-on product Windows 7. In fact, Microsoft is spending billions to move its platforms forward. On the name, Microsoft has a consistency problem. We went from Windows NT to Windows 2000 to Windows XP to Windows Vista and now we are moving to Windows 7. It just reflects that Microsoft lacks the same marketing consistency that Apple has.
Now, on the other hand, Apple spends, as a percentage, more on marketing than any other vendor. This means, in reality, that Apple spends more on marketing than it does on fixing its own problems, which has actually turned out to be an advantage. In addition, Apple uses unique names to designate its operating systems, too. And just because Apple calls one Tiger and the next Leopard doesn’t mean Apple is trying to hide problems with MacOS (they used to use numbers - remember MacOS 9?) or Tiger. Apple is just more systematic and better in this discipline than Microsoft.
In effect, these latest ads make fun of Microsoft doing similar things to what Apple has done historically. The subtle message is that you should avoid companies that spend more money on marketing or change their product names - both of which Apple does more regularly than Microsoft does. Apple must truly think people are stupid.
To me that is actually pretty stupid and that is why Apple’s quarter may not be one for the record books. The lesson here is that focusing on the negative is just a bad strategy regardless of who does it. I actually think we’d like the world that Obama envisions better and would like to drive to that. What is funny is that Apple, and every tech vendor's employees (including Microsoft, by the way) support Barack Obama - who hasn't been exclusively negative and tried not to go in that direction at all. That, of course suggests that if he were to run Apple, he might disagree with Apple’s current approach, or at least disagree with Apple going nearly 100% negative.
The real problem with negative
Part of what makes Apple successful is that the company typically has the strongest demand generation marketing in the segment. Hyundai is one of the few firms that succeed in this discipline as well (check out this French ad). Hyundai’s ads are elegant fun and drive people into stores or dealerships. Negative ads don't. They get people who are already thinking of buying something else to consider you. But right now, folks aren't thinking of buying much of anything.
In addition, negative ads tend to focus on what the other guy does badly. The new Apple laptops are not only too expensive for the current market, especially when compared to most other offerings. They have issues like bad keyboards and being more prone to scratching and damage (the downside of soft metals like aluminum). For instance, the difference between a Lenovo laptop and an Apple device in hardware is that the Lenovo is much better built and the Apple is much more attractive visually. The goal is to be both well built and good looking.
Finally, Sun also focused on taking shots at Microsoft and, for a while, it worked for them. But look at them today. For instance, while Apple is focused on Microsoft's negatives, other PC vendors came out with Netbooks that provide high margins and very aggressive $500 prices - and Apple is focused on spending lots of money pointing out Microsoft practices that mirror Apple’s own market leading practices.
In the end, you need to tell people about your advantages and not constantly point to the other guy's faults, particularly when you start to pick things that also reflect badly on you. I believe that Apple should take a page from its own iPod campaign and emulate the candidate they apparently like the best and go more positive.
Frankly, no matter how funny these ads are, after this election I'm simply sick of negative untruthful advertising.
Rob Enderle is one of the last Inquiry Analysts. Inquiry Analysts are paid to stay up to date on current events and identify trends and either explain the trends or make suggestions, tactical and strategic, on how to best take advantage of them. Currently he provides his services to most of the major technology and media companies.