The technology firm posted its first quarterly profit slip in a decade yesterday (23 April) as investing in innovation and increased competition from its Android competitors ate into margins. Apple is still the most profitable technology company in the world – and its first two quarters tend to be “quiet periods” for the company as it gears up for its annual summer hero product launch – but investors and fans fear the profit slump could indicate demand for its products has peaked.
Ken Segall, former creative director at Apple’s ad agency TBWA/Chiat/Day and one of the brains behind the iMac and Think Different ad campaigns, says Apple’s brand and product are intertwined in a way unlike many other companies, so its product line is responsible for any hits the company is currently taking. He adds it would be good for Apple to “recognise the market has matured” and prove it still has an ability to reinvent categories with something completely different, rather than another iterative iPhone or tablet release.
He says: “Apple needs to create a watch, a TV, a new iPhone family to show it is still innovating. People believe the new iPhone is the 5s, which seems to me like they’re shooting themselves in the foot; they’re broadcasting ‘this isn’t a real update’. I don’t think any other company tells their customers ‘this will be an off-year upgrade’.”
Once a new product is unveiled, Segall says Apple must increase its investment in marketing and “shake things up” creatively to compete with Samsung, which is reported to have spent $2bn on advertising last year alone.
He adds: “Samsung is openly running circles around Apple in marketing. People sometimes fail to give credit to Samsung’s budget, their ads are so perpetual and at a certain point people start believing [some of the ads’ open digs at Apple]. A budget that size feeds the hype machine [that Apple has lost its way]. Samsung were at the Superbowl, the Oscars and they’re being really creative and people are talking about it. Apple is still sticking with an ad with a screen that does a lot of different things but that’s several years old and not exciting.”
“Perfection” is hardwired into Apple’s DNA, which can make it difficult to continue building its brand in a more open world – given the rise of social media – which allows consumers to openly converse with companies, according to Ije Nwokorie, managing director at brand consultancy Wolff Olins, which has recently worked with the likes of EE, Spotify and Microsoft.
He adds: “Apple has to squeeze value out of a model of branding that is starting to run out of steam because a change would mean fundamentally rethinking what Apple does and it could jar. That said they still need to find a way to get involved in the conversation. Their showpiece product launch events [follow the same formula]: CEO on stage, big screen. They created that but that’s the bit they need to reinvent too. Less of the ageing rockers on stage telling us about cool stuff, it has to be a more human conversation, not just saying ‘look how clever we are’.”
A way to be more participative in advertising could be to attempt to repeat its famous Superbowl ad of 1984 (see below) or its “Here’s to the Crazy Ones” campaign in 1996 to signal a new direction of the company and open up a conversation around what is next in the world of technology and explain again to the world what the Apple brand stands for, Nwokorie says.
To ensure long-term growth, Apple must get back to promoting the attributes where it outperforms the competition beyond its hardware story, according to CCS Insight director of devices and software platforms Geoff Blaber.
He says: “Apple still has the advantage in the breadth and quality of third party apps, a service infrastructure that connects all its different products together in iCloud and still has by far the best content offering through iTunes, which others are still a long way off rivalling.”
When sentiment is working with Apple its formulaic marketing approach supports its position, but now perception towards the company is slipping towards the negative end of the spectrum, it is time for its marketers to adopt the mantra of one of its most famous ad campaigns and “Think Different”.