new lineup of chips is ready for action, the company is revving up the marketing machine.
Intel officially launched a new advertising campaign for its Core 2 Duo microprocessors Monday, the main thrust of a multimillion-dollar effort to build brand awareness for the new product.
Dubbed "Multiply," the new advertising campaign will highlight the "multi-dimensional benefits" that consumers get with dual-core processors and feature music from up-and-coming bands.
The ad campaign comes at a tricky time for Intel, which is fending off fierce competition from
Advanced Micro Devices
and is weathering a period during which demand for personal computers appears to be sagging.
Meanwhile, Intel has undertaken a
broad restructuring of the company designed to save $2 billion in costs next year, with marketing and advertising among the parts of the business targeted for cuts.
An Intel representative would not say exactly how much Intel is spending on the campaign, but noted that it represents the most significant marketing campaign in size and scope since the company's 2003 introduction of the Centrino mobile platform, for which Intel invested $300 million.
Intel is investing hundreds of millions of dollars for building the brand for Intel Core 2 Duo between now and the end of the year," said spokesperson Agnes Kwan.
Intel, which has a more than three-quarters share of the PC microprocessor market, began shipping the various versions of its Core 2 Duo processors in the summer. Until now, the company has advertised the chip -- the company's most significant processor upgrade in years -- in a piecemeal fashion geared toward specific markets.
The Multiply campaign will deliver a broader message about Intel's Core 2 Duo, irrespective of computer types like desktops, laptops or servers. Instead of focusing on the chip's technical features or performance merits, the ads will highlight the end-results the technology offers.
"It's really building an emotional connection back to end-users," says Kwan.
One TV spot features quasi-hip-looking individuals, cloned with special effects, dancing around to funky music as phrases like "multiply your intensity" flash on screen. Bands like the U.K.'s New Young Pony Club and Sweden's Teddybears are featured in the ads.
It's a striking contrast to the billboards AMD has blanketed many cities and airports with, touting its chips' energy-saving capabilities.
The differing marketing messages reflect each company's standing in the market, says Insight64 microprocessor analyst Nathan Brookwood.
"The only way Intel is going to increase sales of its chips is if the market grows. AMD has the luxury of being able to steal market share from a competitor," Brookwood says.
Unfortunately for Intel, it has the burden of convincing consumers to buy new PCs at a less than ideal time.
new operating system, has been delayed until 2007, taking away one of the major reasons for consumers to upgrade their PCs. It also means Microsoft is unlikely to open its wallet with its own big marketing campaign depicting the wonders of a new PC.
What's more, an expanding roster of consumer electronics like cheap flat-panel TVs and multifunction cell phones are competing for consumer dollars this holiday season.
According to a recent report by industry research firm Gartner, worldwide PC revenue will decline by 2.5% in 2006, the first year of negative growth since 2001. Much of the decline is attributable to lower prices, as PC makers slash prices to generate sales.
Convincing the average consumer that now is a good time to buy a new PC is going to be tough, says Brockwood.
And once Intel lures PC buyers to retail stores with its marketing campaign, it's still at risk of ultimately losing sales to AMD, which can focus its marketing efforts on differentiating itself from Intel.
Intel's ad campaign, created by McCann Worldgroup, will include print, online, TV and radio.
The initial campaign is designed to run through the winter 2006 holiday season, although Kwan says Intel senior management views the campaign as something with long term potential.
Shares of Intel closed up 0.7%, or 14 cents, at $19.65 Monday. AMD shares closed up 3%, or 79 cents, to $27.32.