PC rivals band together in $70M ad effort to convince consumers they need a new machine

Dell, HP and Lenovo join Intel and Microsoft in push to shave replacement cycle

PC Does What ad

Microsoft, Intel and the world's three largest computer makers -- Dell, HP and Lenovo -- have banded together for the first time in a joint marketing campaign to convince consumers they should replace their aged personal computers with new systems.

The campaign relies on the tagline "PC Does What?" and will launch Oct. 19 with television, print, Web and social advertisements, along with "native" ads, a new term for the old-school label "advertorial." Native advertising is specially-designed digital content that looks nothing like a traditional ad but is more akin to a news story or blog, and is created or commissioned.

PC Does What? will run for six weeks.

According to Advertising Age, the campaign has a $70 million budget. The companies will limit the campaign to the U.S. and China, which account for more than half of the global PC market.

The gist of the campaign is that consumers who have older PCs -- those bought four or five years ago -- have no idea what a new machine can do. "We want to let them know how much better today's PCs are than the PCs they're using," said Steven Fund, Intel's chief marketing officer, in a live-streamed presentation where the head marketing executives of all five firms appeared.

"Millions of people are still using outdated systems," echoed Karen Quintos, Dell's chief marketing officer, in a statement. "For consumers and business users alike, entirely new benefits and features come standard in the latest devices. Now is the perfect time to experience what you've been missing."

Interestingly, the host of Thursday's presentation, Patrick Moorhead, principal analyst at Moor Insights & Strategy, posed a viewer-submitted question to the marketing execs that appeared to be a preemptive strike against doubters.

"Some pundits may say this showing is the last gasp of the PC industry," Moorhead said, reading a question which spoke to the long-running theme that the personal computer is now a dead end.

"I say that an industry that sells a couple of hundred million PCs a year is not a dying industry," retorted Quintos.

What Quintos did not say was that her industry once sold considerably more PCs than that. According to IDC, OEMs (original equipment manufacturers) like the three banding together for PC Does What? shipped about 375 million PCs in 2011, the most ever. For 2015, IDC recently forecast shipments of 282 million -- a 25% decline in four years -- with zero growth through 2018.

The campaign is a nod to that reality, said Stephen Baker, an analyst with the NPD Group. With the PC industry suffering shipment declines over the last 15 straight quarters, the business is now almost entirely one of replacing existing machines.

"It is a replacement market," said Baker, citing data from his research firm that pegged household ownership in the U.S. at 80%, a number that's held steady for quite some time.

What's been hampering PC sales, even replacement purchases, has been the massive shift toward mobile, primarily smartphones but to a lesser degree tablets, with which most consumers now spend the bulk of their time. Although they probably still own a PC, consumers use it much less than before, and so see little reason to spend money on a brand new device that they would use just as infrequently.

"The thrust [of this campaign] is to find a way to shave the replacement cycle," argued Baker, referring to the time between PC purchases. "This is more about why you need to keep up with your PC even when you spend most of your time on your phone."

When the PC Does What? blitz ends, the individual companies plan to pick up with separate marketing campaigns, which will pitch their own products to consumers as the holiday sales season gets serious.

Copyright © 2015 IDG Communications, Inc.

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