IBM's Magic Moment

Brandweek, August 9, 1999 by Todd Wasserman

After ceding the market for PC servers to the likes of Dell and Compaq in the mid-1990s, IBM has resorted to "magic" as it intensifies its assault on the high-margin segment, which uses Microsoft's Windows NT operating system and Intel microprocessors as a cheaper alternative to the traditional host/server systems that IBM has dominated. "We missed this one so badly, I don't want to think about it," CEO Lou Gerstner lamented to analysts in 1997, just as IBM was readying the launch of its Netfinity server line. "We let Compaq run out and grab the PC server business." Even after playing catchup with redesigned machines named Netfinity in striking black boxes, new technology, more competitive pricing and the benefits of a broader, $100 million global marketing initiative for the small to midsize business market launched in April, IBM still trails Compaq and Dell.

Now, IBM is stepping up the pressure with an ad campaign via Ogilvy & Mather, N.Y., that plays off information technology (IT) managers' fervent desire for systems that run reliably and with minimal maintenance, a thesis it is trying to bang home emotionally by styling Netfinity as a "magic box." It's the latest off-kilter move from the former Squirt soda marketer, Mike Liebow, who joined IBM just in time to orchestrate the Netfinity launch in fall 1997.

Liebow began that effort with $40,000 worth of focus group research to find out who it is who actually buys servers and why. The answer: IT managers--not CEOs and chief information officers--who are looking for a powerful, reliable computer with minimal maintenance requirements, given the dearth of qualified IT workers. Those insights have informed most aspects of the brand's development, from its name to the latest ads.

For the launch, Liebow moved quickly to give the line a name more in keeping with its striking visual identity, ditching the bland "IBM PC Server" for NetFinity, a name retrieved from a free software product IBM had offered. When the capital "F" in "Finity" was found to connote "finite" in focus groups, a lowercase "F" was chosen. And while the IBM bureaucracy prohibits logos, Liebow enlisted design shop Desgrippes Gobe, N.Y, to develop a unique "visual treatment," an infinity sign that dots both "i" letters in Netfinity.

While resellers say Compaq's ProLiant line has a strong following, IBM's careful pricing and positioning moves have helped establish it in the white-hot category. "They're certainly making a great entry," said Shawn Bakhtiar, technical sales manager for Omni corp., Reston, Va. "The sales are increasing, but the server market's growing so fast it's hard to tell if they're taking away customers from Compaq."

Now, IBM hopes to offer a more distinctive ad message than competitors' rational appeals to performance and reliability. Its new ads extend the insights from the 1997 focus groups in a more emotional direction by positioning Netfinity as an almost mystical panacea for an IT manager's headaches. Taking a cue from 2001:A Space Odyssey, TV ads airing on national news programming and print ads present Netfinity as a "magic box" that shows up reassuringly in city streets, hospitals, even a bowling alley, while asking, "What if there was a box? A magic box?" The campaign will run at least through year-end, adding Asia, Latin America and other international markets this fall.

The idea, said Chris Wall, O&M senior partner/executive director, was to emphasize the server's ubiquity and importance. "If you look at the way the world is going, there's more going on at the server level than there ever has been. There's seldom been a component as important. You only know it's there when it's not there," he said.

The ads play up that Zen spirit. Against a raga-chant with a World Music beat (via Machine Head, Venice, Calif.), scrawled captions cite such magic box uses as "knowledge box" (uniformed students at school) and "music box" (a hardcore punk band onstage.) They conclude, "A box with amazing powers. Always there for you. IBM e-business servers are the magic box."

While the flight of fancy inherent in magic box might seem to strain the credulity of battle-hardened IT managers, Lauren Flaherty, vp of international marketing for IBM servers, said research showed the Web brought out a strong sense of optimism in people. "It's really the aspect of what you can now do and what's possible [with the servers] ," she said. "It's a pretty simple thought."

The ads also try to take fear out of computing. "The pitch was always, 'You'd better watch out,"' she said. "But we did the reverse; a very different spin, much more positive."

Program:

Netfinity server marketing

Marketer:

IBM, White Plains, NY

Agency:

Ogilvy & Mather, NY (ads)

Key players:

IBM: Michael Liebow, strategy dir (Netfinity); John Collies, vp-mktg; James Gargan, dir-prod mktg; Lauren Flaherty, vp-intl mktg, IBM servers; Ogilvy: Michael McLaren, exec grp dir; Todd Arata, acct exec; Chris Wall, worldwide creative dir; Tony Arefin, co-creative dir/art dir; Tom Bagot, sr copy writer