Commodore Pins Hopes on Amiga Ad Campaign
Remember the Commodore television ad about the fat kid who flunked out of college because he didn’t have a computer? To critics, it exemplified the overselling of the virtues of the home computer that hastened the market’s decline.
“A lot of people saw that ad and said, ‘Screw this. I’m not going to buy that thing,’ ” said Ralph Gilman, a senior vice president at Infocorp, a market researcher in Cupertino, Calif.
Heaven forbid if the public has that reaction to Commodore International’s advertising blitz for its newest machine. This time, the very future of the company rides on the success of the Amiga, a computer that’s going to seem omnipresent in the next few months.
Commodore said Thursday that it will spend $40 million to market the Amiga during the next year, most of it on advertising and most of that before Christmas. The whole thing is starting this week on such television shows as “Dynasty” and “Miami Vice.”
The company wouldn’t say exactly how much of the budget will be plowed directly into advertising. But the Amiga campaign appears to be in the same ballpark as IBM’s $32.5-million effort to publicize the ill-fated PCjr computer in 1984.
“These days, that’s a pretty big advertising budget,” says Efrem Sigel, publisher of Communications Trends in Larchmont, N.Y., which has recorded a sharp slowdown in the growth of computer-ad expenditures that mirrors the industry’s troubles. “That’s one of the questions: Where’s the money coming from?”
Sigel was referring to Commodore’s financial troubles. Wednesday, the West Chester, Pa.-based company reported a worse-than-expected $124-million loss for its fourth quarter. The company has fallen out of compliance with terms of its loan agreements and is having to renegotiate with its bankers.
But Commodore’s Robert B. Trukenbrod, a marketing vice president, said the $63-million inventory write-down and other one-time charges that helped make the fourth quarter so bleak also have served to put the company’s troubles behind it. For now, he said, the problem will be to build enough Amigas and Commodore 128 computers to meet demand.
Gear Up Production
Earlier this year, Commodore said it hoped to sell 150,000 Amigas by Christmas. Trukenbrod now says the Japanese subcontractor who is building the Amiga couldn’t make that many that fast and that Commodore now sees sales of 50,000 to 100,000 by year-end and 300,000 to 500,000 during the next 12 months.
To achieve just the lower goal, Commodore--which just began shipping the Amiga--will have to do better than Apple did with its Macintosh or IBM did with the PC in their first years on the market. The Amiga, which starts at $1,300, is intended to compete with more expensive personal computers such as those two.
The company said it has exceeded its target on one important front, with about 620 U.S. dealers--87 in California--signed up to handle the machine. Commodore’s publicly stated goal had been 500 dealers by about this time.
Dealer willingness to stock the Amiga is one of the big question marks facing the computer, as Commodore hasn’t yet been able to crack the biggest computer-store chains with it.
Because the Amiga, which has won praise from technical reviewers, is a more sophisticated and expensive machine than the more familiar Commodore 64 and the newer Commodore 128, the company isn’t peddling it through K mart and other discount or toy-store chains.
Selling through specialty stores also serves to upgrade the company’s current image as a maker of cheap computers to play games on, which is the part of the computer market hit hardest during the industry’s current weakness.
The stores that have so far agreed to handle the Amiga represent only about 12% of all U.S. computer-retail outlets, so Commodore is pressing hard to win a central purchasing agreement with ComputerLand, the biggest chain with 800 stores worldwide.
Several dozen individual ComputerLand stores, including about 35 in California, are listed as Amiga dealers.
A spokesman at ComputerLand’s Hayward, Calif., headquarters said the chain is “taking a good look at” the Amiga. “We’re interested.”
As for the new advertising campaign, created by Ted Bates Advertising of New York, it will de-emphasize technical details and won’t feature kids flunking out of school.
Though Apple Computer still uses that idea in some ads, it’s out of vogue to plant the fear in parents that their children will be disadvantaged without computers, ad watcher Sigel said.
“Commodore wasn’t the only one harping on that theme,” he said. “It was a fad. The people who were most susceptible to that (pitch) have already bought computers. We’re now at the stage where the computer has to make it on its merits.”
According to Commodore’s Trukenbrod, the new ads will depict the Amiga as “a positive tool to help you.” The television campaign will include homey 1950s and 1960s childhood scenes in black-and-white film with splashes of color generated by the Amiga’s graphic capabilities. He said it will speak to viewers who already have “got their piece of the pie.”
If that sounds like a pitch to Yuppies, Trukenbrod resolutely denies it: “We’re consciously avoiding putting a label on anybody.”