SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Dell Technologies Inc.
DELL 133.59-1.8%Dec 3 3:59 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Mohan Marette who wrote (49130)6/26/1998 10:35:00 AM
From: Gabriel008  Read Replies (2) of 176387
 
To one & all:This DELL investor below has an extensive advertising background and has taken the time to analyze the DELL's incremental $70mm advertising campaign and determine its spending impact on future earnings.

Hi Gabriel:

I'm not a member of SI, so I thought I'd send this to you to post if you think it's worthwhile.

I did some checking regarding this campaign and my source is someone from JWT (Toronto).

The $ 70 MM advertising spend for this campaign will run from June 14 to December 31, 1998 in Canada and the U.S. The primary media are TV and print. The only information that wasn't absolutely clear before is that the campaign will run to Dec. 31st.

There are two executions planned, "Mouse" which is currently running and "Elephant" which is scheduled to break this fall.

Impact on EPS for the balance of 1999 assuming 700 MM fully diluted share is $ 0.10. I think it will likely break-out as follows::

Q'2 1999: $ 0.03
Q'3 1999: $ 0.04
Q'4 1999: $ 0.03

The break even point for this campaign assuming an ASP of $ 2500.00 and Gross Margin of 22.27% is $ 314 MM or 125 K units.

Based on your P&L model, the 125 K unit represents about an incremental 3% in worldwide sales volume during Q'2 - Q'4, 1999.

The only question that one might still ask is from a devil's advocate perspective, "Do Dell managers think that sales are softening or will soften and they're really doing this to achieve current unit sales projections?"

The press release spins the advertising campaign as an expansionary one.

Clayton
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News