Promoting Intelligence: IBM’s direct response effort touts business services

On the off chance anyone worried that IBM was lacking in business intelligence, the company has decided to spend $30 million to make sure we all know the score.

Earlier this fall, Big Blue kicked off a massive direct response effort promoting various hardware and software and consulting services to banking, insurance and retail executives interested in managing customers, products and transactions.

The campaign, which will eventually encompass Europe and the Asia/Pacific region, began with DRTV spots airing during prime-time programming. A 250,000-piece mailing to top executives in the targeted industries was completed, and the company is running national direct response print efforts in such business publications as The Wall Street Journal and Business Week as well as airing DR radio commercials in major markets.

Banner ads on Web sites likely to draw the kind of executives IBM wants to attract – including marketing vice presidents and their staffs – are also being purchased, says global marketing operations executive Vince Jones.

Jones isn’t overtly disclosing IBM’s revenue goals for these efforts, but he admits the company is hoping to make back three times the $30 million it’s spending.

This month, IBM is beginning the European leg of the campaign, which will be followed by the Asia/Pacific Rim effort “probably by the end of January,” he says.

>From all this IBM generally wants to increase awareness of its business >intelligence consulting services, hardware and software because, Jones >maintains, “people don’t think of IBM” as providing them. Usually, he >says, they look to companies like Hewlett-Packard or NCR for hardware, >Oracle Corp. for software and Arthur Andersen and KPMG for consulting.

But don’t feel too bad for IBM: Jones admits Big Blue already has a nearly 20% market share in all these areas. According to IBM, business intelligence is the fastest growing part of the information technology sector, increasing at a more than 50% a year on average and expected to reach $113 billion by 2002.

IBM chose to aim at banking, insurance and retail because collectively they account for 40% of the business intelligence market. Jones says the company could have widened the campaign to include a couple of other areas but decided it wasn’t worth the extra $5 million to $6 million.

IBM recently initiated “Y A,” a program that delivers relationship marketing systems for small and medium-sized businesses. Prices start at $60,000. Also debuting was the RS/6000 S80 enterprise server, which processes large amounts of data for bigger outfits. IBM’s slightly less powerful S/390 Multiprise 3000 is being pitched to smaller firms.

Given the mammoth market projections for business intelligence, IBM will be advertising next year – probably starting with TV coverage of the Olympics in Sydney, Australia. “But we probably won’t be spending $30 million,” says Jones. Time will tell if that is an intelligent decision.