January 26, 1998
ADVERTISING / By DANIEL M. GOLD
Iomega Buys Name-Recognition
ven as computer technology becomes more embedded in
mainstream culture, it remains uncommon for a branded product to
command the loyalty of the garden variety customer. Those achieving that
status are, of course, some of the world's most powerful brands: Apple's
Macintosh; Microsoft's Windows; Intel's Pentium chips.
Iomega Corp., a leader in the formerly arcane
computer technology niche called portable data
storage, aspires to that level of branding power.
Iomega markets the Zip drive, a data-storage
system with disks holding 100 megabytes of data,
the equivalent of 70 standard floppy disks.
As peripheral products that attach easily with
cable hookups to PCs, the sleek, stylish blue Zip
drives have become almost ubiquitous in the last two years at workplaces
heavy with computer graphics, which rely on multimedia files that don't fit
on the 1.44 megabytes of a traditional floppy disk and overwhelm a hard
drive's storage capacity.
Iomega has already shipped 12 million Zip drives in less than three years
and makes no secret -- one might say the company relentlessly promotes
the idea -- that it intends to become the new storage standard.
Now, in a commercial that is the centerpiece of a multimedia campaign
estimated at $10 million or more, Iomega is promoting the drive as
something else to ask for when buying a computer: Zip Built In.
The spot, which has run in the nation's top seven markets for PCs since
mid-November, features a burly crew of airplane cargo handlers, poised
to tackle the assignment of unloading a Russian-built Condor.
The Condor "is the world's largest
cargo plane," an announcer intones,
"yet it's nothing compared to the
unlimited capacity you get with this
amazing drive. Get one in your next
computer." As the crew peers into
the hold, all they find is a computer
with a built-in Zip drive and a Zip
disk popped out. "Hey, you need a
hand with that?" one mover asks the
foreman, who paws the disk as he exits the plane.
The spot has run on popular prime-time shows like "Seinfeld," "NYPD
Blue" and "Frasier"; print advertisements have appeared in computer
magazines and general-interest publications like Newsweek and USA
Today.
Sunday night, the 30-second Condor commercial even ran during the
Super Bowl festivities. That decision, according to David Henry, vice
president for worldwide marketing at Iomega in Roy, Utah, came after
research showed that early awareness of the spot -- in what had already
been the company's biggest consumer campaign -- had been strong. In
addition to the Condor spot, the company introduced two new
commercials Sunday night.
"It's relatively big bucks," Henry said of advertising during the Super
Bowl, because each 30 seconds costs an average of $1.3 million. But the
international spotlight the game offers "is expanding the audience" for
Iomega "to another level." Indeed, Iomega told analysts last week that it
planned to triple its advertising budget, to $100 million, this year to help
build its brand.
A commercial on the Super Bowl, the ultimate consumer-culture
showcase, is indicative of how Iomega has risen from the ashes of earlier,
outmoded products by fastening onto a consumer focus.
"They took that category to the masses," said Kathryn Dennis, a senior
editor at MC, a trade publication covering technology marketing, by
conducting "a lot of market research to determine what was needed to
make this product attractive to consumers."
One result was a price that would not put off customers. An external Zip
drive now sells for about $149; a built-in one costs about $99. The disks
can be had in three-packs for about $15 each. Daniel Kunstler, an
analyst at J.P. Morgan Securities in San Francisco, estimated that
Iomega would sell about $1.5 billion worth of Zip drives and disks this
year.
Disk/Trend, a disk-drive market
research firm, estimates that Zip
drives constitute about 90 percent of
what it calls the high-capacity floppy
drive market, meaning disks that can
hold 100 to 200 megabytes of data.
That niche is about to experience
precipitous growth: from slightly less
than 4 million drives sold in 1996 to
almost 9 million in 1997 and more
than 15 million this year, Disk/Trend
said.
If anything, Zip sales to computer makers promise to outshine Iomega's
achievement on external Zips. A year ago, Zip drives installed in PCs
constituted 10 percent of all Zip sales; today, that share is 35 percent and
growing. According to Iomega, the top 12 PC manufacturers all offer
models with Zip installed. By 2000, Disk/Trend forecasts, 20 percent of
PCs will ship with a Zip drive installed, compared with as little as 5
percent today.
If the Zip Built In "ingredient branding" strategy sounds like the "Intel
Inside" campaign that made the chip maker a household name, it's more
than a coincidence. Iomega's agency, Euro RCSG DSW Partners, a unit
of Havas Advertising in Salt Lake City, created that campaign for Intel.
Alan Reighard, senior director on the Iomega account, conceded that
"Zip Built In" bore some similarity to "Intel Inside."
"But they are also very different consumer propositions," he said. "'Intel
Inside' guarantees greatest performance from your computer; 'Zip Built
In' extends the capabilities of what you can do on that computer."
"Ingredient branding is a tricky thing," Reighard said. "It doesn't work
with every proposition. You have to look at each product separately."
By pushing Zip as an installed feature, Iomega hopes to end any debate
about its status as a new standard.
"If the Zip would remain separate from the platform," Kunstler of J.P.
Morgan said, "that would allow someone else to drive a wedge between
it and its goal."
Indeed, using their instincts for consumer marketing, Iomega executives
have given Zip primacy in a field in which it may not even have the best
technology. Syquest Technology's EZ Flyer holds twice as many bytes
per disk as Zip. And Imation's LS-120 system has "backward
compatibility" -- that is, the ability to run floppy disks -- a highly prized
attribute that Zip lacks.
"The relevance of that is somewhat limited," Kunstler asserted, since the
Zip is so dominant and "Iomega has done a superb job of marketing."
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