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Technology Stocks : A.T. Cross Company (Amex: ATXA)

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To: Jacob Williams who wrote (9)4/30/1998 8:40:00 AM
From: Gus   of 21
 
April 30, 1998

Advertising
Cross, IBM Use Pen and Notepad
To Convey CrossPad's Technology


By ANDREA PETERSEN
Staff Reporter of THE WALL STREET JOURNAL

Tucked into techies' favorite computer magazines, hidden among ads for
high-tech gizmos, is a retro, almost quaint, image: a yellow notepad and
pen.

That anachronistic duo is the focal point of a new advertising campaign for
the CrossPad, a joint venture between Cross Pen Computing Group, a
division of A.T. Cross, and International Business Machines. The Cross
Pad, introduced last month, allows users to make handwritten notes on an
ordinary notepad, upload them to a personal computer and then
manipulate chunks of the handwritten text, such as pasting them into other
documents or faxing them.

Small Budget

The advertising challenge, Cross said, was to create a campaign that can
convince people such a combination of old and new technology will work,
as well as conveying the cool things the CrossPad can do without being
mind-numbingly wordy -- and all that on a relatively small ad budget of
about $2.3 million.

So the ad campaign, mainly using print,
pre-empts consumer skepticism by
acknowledging it: "A notepad that uploads
right into your PC?" and "A notepad with a
memory chip?" are the taglines the campaign
uses. The product's primary functions are
boiled down into five pithy soundbites.

"One of the great fears of technology is that it's not going to live up to your
expectations," says Richard Ellenson, president of Ellenson Group, the
New York-based agency that created the ads. "We needed to convince
people that something this simple will ultimately work."

Ellenson also needed to convince people that A.T. Cross, the
152-year-old pen company, is hip enough for the digital world. Most
people associate the Lincoln, R.I., company with high-end pens, or those
pen-and-pencil sets proffered by grandparents at college graduations --
not high-tech gadgets. To make the break, Cross Pen Computing is even
using a separate ad agency from its parent -- scrappy start-up Ellenson
instead of Boston-based Pagano, Schenck & Kay Advertising.

Nothing Hip Here

But the Ellenson ads shirk the hip, self-conscious lingo and graphics that
often plague ads for electronic products. Instead, they simply convey the
link between high-tech and low-tech: a traditional-looking Cross Pen is
poised to write, but three little red marks depicting radio waves show that
this pen is wired. A thin blue line, intersected by the word "upload,"
connects the pad to a PC monitor. The same notes written on the pad are
displayed on the computer screen.

Of the simplicity, Mr. Ellenson says, "We're probably proudest of the
discipline we showed in getting out of the way of this wonderful thing. We
realized we had a dancing bear and we didn't want to overwhelm the bear
with the trainer."

Cross, which is doing all the advertising and most of the marketing for the
product, says it is targeting PC-savvy professionals who go to a lot of
meetings. "It is for anybody who has to take notes but for cultural reasons
can't use a notebook [computer] or a laptop," says Brian Mullins, Cross
Pen Computing's director of marketing. "For sales people, it's still
culturally unacceptable to sit in front of a customer and type away at a
keyboard."

Though some ads will appear in business publications as well as
newsweeklies such as Time and Newsweek, the company is allocating
almost half its budget to ads in major computing magazines like PC World
and Wired.

Flying High

Cross also hopes to lure jet-lagged professionals trapped in airplanes. The
company is allocating about 15% of the budget to ads in in-flight
magazines such as Delta Sky and American Way. Cross also is producing
a three-minute video to air on United Airlines' in-flight monitors. And
hands-on customer displays of the CrossPad, which sells for $399, have
already been shipped to big retailers such as CompUSA and Staples.

The CrossPad works like this: The user writes notes on a conventional
paper pad with a special Cross pen that houses a radio transmitter, which
beams the handwriting to an electronic clipboard behind the notepad and
stores it. Notes can be uploaded to a PC and then viewed on the screen in
handwritten form; or the notes can be converted electronically into
computerized text, though the software doesn't read the handwriting
perfectly.

The CrossPad is the third product launched by Cross Pen Computing.
A.T. Cross began the division two years ago to "move the company more
into the 21st century," says Robert Byrnes, the division's president and
chief executive.

While the division contributed only $2.8 million to the company's revenue
in 1997, Cross expects it to bring in about $25 million this year. That
could be good news for a company that reported a loss of $1.3 million for
the first quarter, compared with net income of $806,000 a year earlier,
partly because of poor pen sales in Asian markets beset by recent turmoil.

"The whole luxury-pen market is in a bit of a funk," says Sheldon
Grodsky, director of research at Grodsky Associates, a South Orange,
N.J., research firm that follows Cross. "If anything good is going to happen
for A.T. Cross in 1998, odds favor it happening on the computer side of
the business."

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