Bingaman Says iSeries Marketing to Focus on Business

by Timothy Prickett Morgan

Peter Bingaman took over as the top marketing executive at IBM for the iSeries line of servers in November last year, and very quickly got into the good graces of the OS/400 server installed base, as well as the independent software vendor community that makes OS/400 applications, by launching a series of TV advertisements promoting the iSeries. Is this the beginning of a new push for the iSeries, or a measure to quiet critics?

Just as 2004 was winding down, Bingaman had a chat with me on the phone and explained, in as much detail as he was permitted to, what his plans were for iSeries marketing this year.

Timothy Prickett Morgan: First, I wanted to touch base on the iSeries TV ads. I was kind of surprised that the TV ads went national. I talked to Cecelia Marrese, your predecessor, at COMMON in the fall, and she basically said that the TV ads didn't pan out, compared with the control groups, and therefore IBM was not going to market the iSeries in this way. I am happy to see these ads, and everyone I am talking to is happy as well. What changed?

Peter Bingaman: It's the right thing to do. We tested an integrated marketing plan, with a number of different vehicles--TV, print, radio, and other things--and we really measured them against their ability to drive responses. The plan was more like a direct-response vehicle, and it was measured against a short response time to get people into events. And when measured against that particular metric, the TV ads did not pan out that well. But, as you probably know, TV is a great awareness builder. It has probably the most immediate and certainly the broadest impact, particularly with running in primetime, that you can get with any advertising vehicle. And that is what we need right now. We need awareness in the market.

TPM: I don't think you're going to get anyone to argue with you about that. This is something the OS/400 community has been screaming about for a long while.

PB: Absolutely. This is about rebuilding market presence for the iSeries.

TPM: The TV ad did not have a very heavy emphasis on the i5 and i5/OS. It doesn't say something like, "You can shoot i5/OS with a rocket and it still works, it has 4,000 applications, it can do Web stuff, blah, blah, blah." This is how most people use their OS/400 servers. You can talk about Java, Linux, server consolidation, and all of this other stuff--and that technology is all great, and it is a good strategy to include it--but that's not how most people use the platform. Most people have a lot of custom RPG or COBOL code, or third party code that they have modified to the point where it is impossible for them to get support from the vendor; there are others who run packaged software. But they all run applications, usually written in RPG or some high-level language or 4GL that gets compiled down. And that has got to be the message. You have to say that there is this thing called OS/400, and it has subsystems, partitions, and all of this heavy technology. We think it is great that there is an i5 ad, but there is not enough of the i5 in the ad.

PB: I think you are right regarding the direction we need to take, and the development of a new campaign is more in line with the "business solutions" message that we need to be associating the iSeries with.

TPM: Is this the beginning of a sustained marketing campaign? Or is this just six shots across the bow with an ad you had already developed and paid for?

PB:This is IBM getting something out there quickly to start building awareness for the iSeries. And we are going to use this to our advantage as long as we can, until we come up with a refreshed campaign that really gets more at the advantages of using the iSeries in a business context.

TPM: How do you lick what networks to put what ads on? If it were me, I would put them on Comedy Central, because that's the only thing I watch regularly, aside from SpongeBob.

PB: I am usually watching SpongeBob with the kids. But, seriously, we have our goals, and we know who we want to target, and we rely on the media agency [Ogilvy & Mather] to figure out where we should be.

I think one of the things we have been struggling with over the past couple of years is this move away from the business solutions message, consistently associating ourselves with the business application on top of the server, and the advantages of running it on top of the iSeries. We have been moving in a direction recently where we are focusing on the technology in the box itself, and we are almost playing an "Intel war," which is a game we are not going to win. That's not our game. So this ad that is on TV is more in line with that: it's the consolidation message. And while there is great business value in it, in terms of cost reduction, it is not necessarily where we are going to win.

We believe we need to be more closely associated with a "business value" message, and we need to target more of a C-level executive--CIOs, CFOs, and even CEOs, the latter particularly at midsized companies--or at bigger companies' line of business managers. We believe this for a couple of reasons. One, that are making business decisions and the server is absolutely critical to that business decision. We have to help them understand that. Two, there are also a lot of IT managers out there who are iSeries evangelists that we need to help bridge the gap with their own C-level executives. We need to help them have conversations with their CIOs about the value of the iSeries. These AS/400 and iSeries boxes may have been sitting around for years and years, and are really worthy of upgrading.

What's your reaction to that?

TPM: The focus on C-level executives is certainly something I hear about. But I think you have to have the C-level manager, programmers, and system administrators in line. If you buy something the system administrators don't want or understand, it just isn't going to run efficiently. But at the same time, you can have all of the system administrators and programmers in the world that love the box, and if you can't get the C-level guy with them, he is not going to cut the check and you are not going to get that iSeries server.

PB: The decision-making for servers is being made more and more at a C-level, and it is very complex now. It is not just an IT decision. So we need to help bridge the gap between IT and C-level executives, to help them understand the business value the iSeries brings.

TPM: So these guys are watching television and listening to drive-time radio?

PB: Absolutely, and we are reaching them.

TPM: Talk to me about radio and print. Cecelia said that the combination of drive-time radio and print was very effective at getting people to events. So what are your plans with these media?

PB: We're always looking at our media plan for ways to strengthen it. Radio, print, and TV are all being considered in the new campaign. One of the great things we introduced this year that we are really going to take advantage of is an ISV co-advertising program, which we have in place through PartnerWorld's industry networks, where ISVs who are in the advanced level of PartnerWorld can receive significant updates on advertising their solutions on our iSeries servers. We'll be using print media specifically in this case to get the iSeries business solution message out there.

TPM: I know you can't talk about your marketing budget in absolute dollars, but are you shifting how you spend for iSeries marketing when you move from what IBM did in 2004 into 2005, or are you making incremental increases in the iSeries marketing budget?

PB: We are increasing our marketing budget for the year, and we are shifting it along with the priorities that we are just now setting for the year.

TPM: What is the goal of the marketing campaign? Is messaging enough? Is branding enough? Or is there a tight lock on the money, that you need to see X percent increase in sales by the end of the year or IBM isn't going to spend money this way anymore? I know from personal experience that most advertisers understand the notion of a sustained marketing campaign and that if your ad is in a slot, your competitor's isn't, but there is a minority that expects miracles after running one ad.

PB: You are absolutely right. We have a framework that we have mapped out for the new year. And at the highest level is rebuilding the iSeries image, the brand, and its value proposition. What we are trying to do with the new campaign--and we will probably move away from the TV ads at some point--is clarify, once again, what the value proposition is behind the iSeries. Why? I think we are suffering from an identity crisis right now. We need to bring a real crisp understanding of what the iSeries is and what it brings to the market.

Then, I have another layer underneath that, which is all about demand generation for our partners. That is where we are going to attach every dollar spent to every lead created. Without the top level, you can't really do the second level very successfully. And then I have a whole set of foundational competencies that we need to be investing in to even make these two higher-level parts of the campaign work.

One of the things I have been promoting internally within IBM as a whole and for the iSeries brand specifically is the idea that we are promoting for our partners as much as making customers aware of the iSeries. By advertising, we are showing our partners that we are making markets for them, and, ideally, that recognition that we are making markets for them remobilizes the partners to once again push the iSeries. It is that business that the partners create over time that I will not necessarily be able to connect to the marketing campaign and its advertising. But I will tell you something: it will have a whole heck of a lot to do with it.

TPM: If you are fired up, those ISVs and partners get fired up.

PB: That is absolutely right. Everyone at IBM recognizes this, and that is all goodness. And that is why this will be a sustained campaign.