Dude, You share top Billing with the Holstein cow and Steven. When will you cover your gonads, before or after Thursday?
Mick (_☺$☻_)
~~~~~~~~~~~~
Gateway's Waitt, Talking Cow Tripped by Dell Dude in Ad Battle
By Peter J. Brennan
Poway, California, May 11 (Bloomberg) -- The Dell Dude is doing a number on Ted and his talking cow.
Dell Computer Corp. has a hit with its youthful television ad character, Steven, who helps confused PC buyers with feature-filled patter and exclaims ``Dude, you're getting a Dell!'' Gateway Inc. tries to charm customers with a talking cow that gives advice to Chief Executive Ted Waitt and goes ski-jumping in one ad.
The Gateway spots give no good reason to buy from the company, while Dell's are specific, said Zain Raj, chief growth officer in Chicago at ad agency Foote, Cone & Belding. The result: Dell's first- quarter U.S. market share rose 3 points to 26 percent from the year- earlier period, while Gateway's fell to 5.8 percent from 8.5 percent, market researcher Dataquest Inc. said.
``That's a big strategic difference that's helping Dell win and hurting Gateway in the marketplace,'' Raj said.
Both campaigns insult PC buyers, said Bill Fleckenstein, head of $70 million Fleckenstein Capital Inc., which has sold Dell stock short, a way of profiting on falling share prices.
``You're talking about a battle of wits between two unarmed opponents,'' Fleckenstein said. ``The talking cow thing is nonsense. It's totally asinine. The Dell dude is marginally above that.''
Ad Budgets
Dell, the world's second-biggest PC maker, spent $361 million on ads in its last fiscal year, a 16 percent reduction. No. 3 Gateway pared its ad budget 27 percent to $240 million. Dell was dethroned Friday as the biggest PC maker by Hewlett-Packard Co.'s purchase of Compaq Computer Corp.
Gateway's ads are made by Siltanen/Keehn of El Segundo, California. Dell's are produced by the Chicago office of Omnicom Group Inc.'s DDB. The Waitt-cow and dude series began in the second half of last year.
``We were going for something that was memorable and people watch more than one time and are fun,'' said David Turner, Gateway's executive vice president for sales.
The Gateway campaign has increased brand awareness among consumers and small-business owners, the company's two main target markets, Turner said. There's a lag as a customer becomes aware of a brand and decides to buy, he said. More Waitt-cow ads are planned, Turner said.
Shipments Fall
The rapping, ski-jumping cow has more work to do. Gateway's first-quarter unit shipments fell 30 percent, and sales fell by more than half to $992.4 million. Dell's consumer sales jumped 38 percent in its fourth quarter ended Feb. 1.
More ads featuring Steven, played by actor Ben Curtis, will appear within weeks, Dell spokeswoman Colleen Ryan said. Curtis, a 21-year-old Tennessee native, is a New York University student.
Shares of Gateway, the third-largest U.S. PC maker, fell 14 cents to $5.11 yesterday. Dell fell $1.36 to $23.88.
Gateway should ignore the critics and rely on customers to tell them whether the ads are effective, said Stan Majcher, a fund manager at Hotchkis and Wiley Capital Management LLC, which manages more than $4 billion and has increased its stake in Gateway to 17 million shares from 14 million in December.
``Financial analysts are the worst focus group for advertising,'' said Majcher, who likes the talking cow.
Gateway's Holstein cow first appeared in October during the introduction of Microsoft Corp.'s latest operating system, Windows XP. Gateway began its biggest ad campaign ever in February, with the cow ski-jumping in TV spots during the Winter Olympics.
The black-and-white pattern of a Holstein appears on boxes from Gateway, based in North Sioux City, South Dakota, until moving to San Diego in 1998 and to that city's Poway suburb last year.
Early Results
Three weeks into the second quarter, Gateway's sales were ahead of a seasonal trend in which consumer demand tends to decline in April, Turner said. He credited the ads.
``We're seeing the momentum stay up,'' Turner said. Gateway's second quarter may show the biggest percentage growth ever in unit shipments compared with the first quarter, he said.
That still won't make the PC maker profitable. Last month, the company said second-quarter sales would be about even with first quarter, when it had a loss and reiterated a forecast for losses until next year.
The Waitt-cow ads have two purposes, selling more of Gateway's restyled computers and more peripherals such as digital photo and video cameras that attach to PCs. The latter goal is intended to make up for a 1999 promotional effort that failed after customers complained that items weren't available in the company's stores.
``The people who watch our ads remember our ads more,'' Turner said. ``Our competitors run the same ads over and over again.''
Dell will soon begin new ads featuring Steven, who became the company's pitchman in the past year.
``We're absolutely delighted with that campaign,'' Dell's Ryan said. ``The `dude' campaign has helped us to connect to our business customers as well (as consumers).''
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