Contagious_IBM

IBM /
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CASE STUDY
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SUPER SMART
case study / ibm /
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Smarter Planet, IBM’s pioneering business
strategy, has removed the brand from the
category norm of safe and stuffy business-to-
business advertising. Colourful icons, sports
sponsorships, fast-talking films and long-copy
iPad ads have all communicated one clear
concept: progress. What’s more, the return on
investment of moving away from product-led ads
to this focused agenda has been staggering: in
2011, Smarter Planet paid for itself more than ten
times over in directly attributable profit.
So how did big data turn into big bucks for
Big Blue? /
By Lucy Aitken
Brand DNA
Founded /
1911
HQ /
Armonk, New York
Employees /
433,362
Product /
Technology and consulting
Promise /
Let’s build a smarter planet
WHY CONTAGIOUS /
Since 2008, Smarter Planet has
proved an effective way to connect
with both a business and a consumer
audience. Colourful, informative
communications highlight how
smarter systems can help achieve
objectives of universal benefit,
such as economic growth, energy
efficiency and sustainability
CASE STUDY
IBM / SUPER SMART /
Michael Dobak,
Ogilvy & Mather New York
'IBM isn’t as sexy as
Apple but it is probably
contributing more to the
world’
66 / 67contagious

case study / ibm /
‘I, for one, welcome our new com-
puter overlords.’ Former Jeopardy
champion Ken Jennings sportingly
penned this phrase after being
defeated by IBM’s super computer
Watson on the US quiz show. The
2011 man-versus-machine show-
down saw Watson sandwiched
between Jennings and fellow former
champion Brad Rutter, outsmarting
them both. It made for edge-of-your-
seat TV while also introducing the
next era of computing to a mass
audience: 9.1% of US households
watched Watson’s victory. Ann
Rubin, IBM’s VP brand expression
and global advertising, comments:
‘Such a well-loved show was the
perfect platform to show this tech-
nology because Jeopardy is all about
understanding the questions, not
searching for the answers. Millions
of people saw how Watson could
understand nuance, sarcasm and
unstructured data.’
Watson, named after IBM founder Thomas J. Watson, was
on Jeopardy as a poster boy for cognitive computing. This
is where machines not only learn data but also refine it and
expand on it, growing smarter with time. They can also
understand human behaviour. IBM CEO Ginni Rometty
has stated that we are entering an era of cognitive comput-
ing, and, at Fortune’s Most Powerful Women Summit, she
predicted: ‘Everybody’s job – the front office, CMO, mayor,
chief of police – will be redefined by this.’ Since Jeopardy,
Watson has provided diagnostic support for oncologists and
helped finance giant Citigroup analyse data. There’s even
talk of Watson one day powering your smartphone as part of
IBM’s wider objective to drive its business analytics division
to $20bn by 2015.
Forbes magazine dubbed it ‘Siri on steroids’.
We believe in progress,
that the application of
intelligence, reason and
science can improve
business, society and the
human condition.
IBM mission statement

contagious 68 / 69
A brief history
Founded in 1911, IBM has been at the forefront of techno-
logical innovation for the last 101 years (see boxout p.54
on the centennial for highlights) and today has three areas
of specialism: services, software and systems. It suffered a
turbulent start to the 1990s when there was a question mark
hanging over its future: computing at that time was starting
to refocus around the desktop and personal productivity, not
on enterprise-wide business applications, a former revenue
powerhouse for the company. Annual net losses reached a
record $8bn in 1993.
In the new millennium, IBM changed tack, focusing more
on what runs on computers as opposed to the machines
themselves. It acquired PricewaterhouseCoopers Consult-
ing for $3.5bn in 2002 and sold its hardware division for
$1.25bn to Chinese giant Lenovo in 2004. Today, having
successfully reinvented itself over the last two decades, it
leads new markets such as enterprise social software which
helps companies improve relations between employees and
with clients. Intelligence firm IDC estimates that this market
is expected to reach $4.5bn by 2016 and with IBM growing
nearly two times faster than the overall market. Thirty five per-
cent of Fortune 100 companies have adopted IBM’s social
software.
IBM’s switch from hardware to consulting is widely
credited with saving the company. In a well-documented
turnaround, former CEO Lou Gerstner recognised that
IBM’s strength was in its client relationships, not in selling
desktop computers.
IBM in numbers / IBM is 19th in the Fortune 500 (two places
behind Apple) and its 2011 revenue was $106.9bn. Q3
results for 2012, however, showed a 2% dip in revenue to
$24.7bn, with IBM’s big services business declining about
5%, to $14.5bn. The company has flagged up cloud com-
puting as a growth area in its 2015 Road Map which also
identifies growth markets, business analytics and Smarter
Planet to drive $20bn in revenue over the next three years.
But analysts suggest that this might cannibalise its software
revenues. Then there’s the issue of the competition, which
is no longer confined to obvious players such as Oracle,
Accenture or Microsoft, but now encompasses Google, and
Amazon’s Web Services.
Today, Interbrand estimates IBM’s brand value at more
than $75bn, ranking it as the world’s third most valuable
brand, behind Coca-Cola and Apple. As Michael Dobak,
managing director of Ogilvy & Mather, New York (O&M), its
roster agency since 1994, says: ‘It isn’t as sexy as Apple but
it is probably contributing more to the world.’
Smarter marketing
Jon C. Iwata, an IBMer since 1984, became senior vice
president of marketing and communications in 2008 with
a remit to reveal what makes the company tick. With the
help of employees, Iwata came up with the following mis-
sion statement: ‘We believe in progress, that the application
of intelligence, reason and science can improve business,
society and the human condition.’ Dobak adds: ‘IBM wasn’t
after a campaign, it wanted an agenda that would help drive
Using data science changes
how you do your job.
Ryan Blank,
Ogilvy & Mather, New York

case study / ibm /
business back through the enterprise. Jon really wanted to
show that IBM’s mission is to make the world work better.’
Susan Westre, the worldwide creative director on IBM at
Ogilvy & Mather, New York, who has worked on the account
since 1995, remembers that Iwata brought Ogilvy staff into
IBM offices to broaden out their sense of the company and
its strong sense of values. ‘Before Jon was on board, we’d
work with IBMers in marketing. Jon allowed us to come into
contact with other IBMers, such as the research and devel-
opment guys.’
The result was Smarter Planet, an initiative that high-
lights how smarter systems help to achieve objectives of
universal benefit, such as economic growth, energy effi-
ciency and sustainability. Interbrand describes it as ‘a
ground-breaking business strategy... it remains a textbook
example of how to create, build, and deliver a world-leading
business-to-business brand.’
Visit the Smarter Planet website and you’ll see a refer-
ence to the 3 Is: Instrumented, Intelligent and Interconnected.
In other words, how we use data, how industries collabo-
rate and how we make the world
smarter. Meanwhile, the ‘People
for a Smarter Planet’ page on
Facebook, which has 238,278
Likes, offers information such
as how IBM is using precision
weather forecasts to help farm-
ers, or advice on how energy
can be saved within buildings.
Crucially for a business brand, it
talks to a broad range of people,
from its core audience (C-suite
decision-makers) to people with
an interest in sustainability, technology or innovation.
For the love of data / IBM estimates that 2.5 quintillion bytes
of new data are created daily, 90% of which is unstructured
and incorporates emails, tweets and videos. Smarter Planet
is intended to help navigate that data constructively and has
been successful in growing IBM’s business by creating new
markets, selling its services to clients such as city mayors by
showing how it can assist with tasks such as sanitation and
water-management. Creek Watch, for instance, is an iPhone
app by IBM Research that enables citizens to play a part
in contributing to water management. Already in use in San
Jose, California, the app invites people to monitor and report
water levels and flow rates. Every update enables local water
authorities to track pollution, manage resources and plan
environmental programmes.
Smarter Planet aims to show how expert data-manage-
ment can impact our daily lives, from information collated via
a smartphone app to improve an irritating stop-start drive to
work, to helping the 884 million people in the world who lack
access to safe water supplies.
Chief Executive Customer
Future-facing, it also incorporates initiatives such as Smarter
Commerce, which aims to redefine the value chain in the
age of the consumer, or the Chief Executive Customer, as
IBM likes to put it. Smartphones play a big role here: in July
2012, IBM Research scientists in Haifa, Israel, piloted an
augmented reality app to offer shoppers a retail experience
personalised with product tips, recommendations and cou-
pons as they scan the shelves with their smartphones. In a
long copy ‘op-ad’ called ‘The mobile world is open for busi-
ness’ IBM flagged up smarter analytics that not only predict
what consumers might buy but also when, where and how. It
ends by pointing out that ‘on a Smarter Planet, the future of
business is quite literally in our hands.’
CEO Ginni Rometty is also eager to sell IBM’s portfolio
of services to marketing chiefs, seeing as, according to a
2012 Gartner report, by 2017, the CMO will spend more on
IT than the CIO (chief information officer).
Ryan Blank, group creative director at Ogilvy & Mather,
New York says: ‘People are voluntarily giving out data and it
is essential that marketers listen to it. That’s your customers
trying to talk to you! And that’s where IBM comes to the
table. Five years ago, why would an IBMer talk to a mar-
keter? Using data science changes how you do your job.’
Mutual benefit / Ogilvy and
IBM benefit from each other’s
expertise. In September, eCom-
merce@Ogilvy, O&M's global
ecommerce practice, announced
the formalisation of a partnership
with IBM Smarter Commerce
which benefits its other clients,
for instance Kimberly Clark. Miles
Young, worldwide chairman and
CEO of O&M, made clear that
the 18-year relationship is mutu-
ally beneficial: ‘IBM’s technology solutions in this space
are unequalled and will add to the solutions eCommerce@
Ogilvy delivers. At the same time, we will also provide IBM
with an expanded base of potential clients.’
Smart equals effective
Thanks to Smarter Planet, IBM is the world’s most effec-
tive brand, according to the Effie organisation. A 2012 Effies
entry, which in May scooped 18 Effie awards including
five Golds, claims that the Smarter Planet media invest-
ment has paid for itself more than ten times over: IBM has
attributed a 37% increase in sales directly to the campaign.
Considering that IBM spent $1.37bn on global advertising
and promotions in 2011, Smarter Planet has clearly been
responsible for creating billions of dollars worth of new busi-
ness for the company. Ginni Rometty even singled it out in
the annual report, estimating that Smarter Planet revenue
grew by almost 50% in 2011. IBM’s vice president of cor-
porate marketing, John Kennedy, adds that Smarter Planet
has helped the company to establish new markets, citing
Smarter Commerce as an example: ‘We describe the poten-
tial that companies have to instrument their value chain, how
they transact with a customer on the front end, all the way
through to their supply chain on the back end.’
IBM's 2011 global
ad spend
Quintillion bytes
of new data are
created daily
$1.37bn
2.5
People are voluntarily giving
out data and it is essential
that marketers listen to it.
That’s your customers trying
to talk to you!
Ryan Blank,
Ogilvy & Mather, New York
2011 revenue
$106.9bn

contagious 70 / 71
Smarter commerce aims
to redefine the value chain
in the age of the Chief
Executive Customer

case study / patagonia
2011
rare look
back
c-suite
game
changer
innova-
tions
inter-
active
iPAD
case study / ibm /
Centennial
In 2011, IBM celebrated its centenary
with what Ogilvy’s ECD Susan Westre
describes as ‘a rare look back’.
Three films racked up combined YouTube
views of more than a million. Directed
by Joe Pytka, 100 x 100 ticked off
IBM’s many achievements, including the
personal computer and the barcode.
They Were There featured IBMers such
as Patty McHugh, ‘the mother of the
motherboard.’ Directed by Errol Morris,
this film also noted IBM’s strong track
record in employee rights. Thirdly, Davis
Guggenheim created a 14-minute film
called Wild Ducks, which interspersed
an animated story with mini-profiles
of exceptional people such as Carolyn
McGregor, who used her skill in
spotting number patterns to improve life
expectancy for premature babies.
Other content included WSJ and NYT
supplements, books and events. ‘After a
century of innovations, we’re just getting
started,’ was the take-out.
SPorts Sponsorship
IBM is TV sponsor and technology partner
for Masters Golf and Grand Slam tennis
events, bringing data to life for both
participants and spectators. Under
the header ‘data is a game changer,’
IBM shows information such as what
happened last time tennis player x met
tennis player y on grass, and what player
x needs to do to win. At the US Open, IBM
launched an iPad app which enhanced
the experience of watching a live game.
Linking its immense data capabilities to
spectator sports means that it hits its
core C-suite target – as well as a more
mainstream audience. It also collaborated
with New York-based independent digital
design agency HUSH on an interactive
visual experience that presented the
data in a fun and accessible way. David
Schwarz, creative partner at HUSH,
comments: ‘This project was about using
design and interaction to cut through
the data complexity and create visual/
informational insights that the average
tennis fan can understand.’ IBM now
plans to extend data visualisation into
rugby and football. Susan Westre says:
‘Since Moneyball came out, interest for
this extends beyond sports junkies.’

contagious
Follow-up work included Outcomes, a colourful, graphic-
led series of posters, cross-tracks and print ads that boasted
strong design credentials. This showed a fresh, agile, mod-
ern brand, a million miles from the lumbering dinosaur image
that had haunted it in the early 1990s.
A programme called Access To Expertise enabled peo-
ple to contact IBMers or other experts. ‘I get emails every
day from IBMers who want to be in the advertising,’ says
Ann Rubin. If they’re not on TV or YouTube, they often write
blogs or they can be contacted via social media. ‘There are
more than 400,000 IBMers and most of them have a very
strong digital footprint,’ adds Hahn. Rubin says: ‘When we
say access to experts, we mean it.’
Focus on reinvention / As 2011’s centenary made clear,
IBMers are keen to be at the vanguard of technological inno-
vation. The company recently stated its intention to target
medium-sized enterprises with cloud computing services.
It will increase its global footprint in growing and emerging
markets, particularly in Asia and Latin America. It will also
continue to build on its annual research and development
investment of $6bn. As CEO Ginni Rometty told Fortune’s
Most Powerful Women’s conference in October 2012:
‘You’ve always got to focus on reinvention.’
The IBM of 2012 is very different from the IBM of 2002.
Not even Watson could predict what it might look like in
2022.
72 / 73
Op-ads and iPads / Flick through a copy of The Econo-
mist and it’s striking how much B2B advertising is stuck in
a time-warp. A Smarter Planet ‘Op-ad’ stands out, not only
for its colourful icon but also for its commitment to long
copy, intending to create a seamless segue from editorial to
advertising. This offers IBM a means to break down complex
subjects such as predictive maintenance (using data to flag
up when infrastructure problems might occur).
More recently, the brand has turned to the iPad to make
its op-ads in global media such as The Wall Street Jour-
nal more interactive, encouraging readers to participate in
polls and share their opinions. Michael Hahn, group creative
director at Ogilvy & Mather, New York, says: ‘We often hear
people say ‘‘I don’t really see ads like this anymore.” In a
world where everything is a tweet, we wanted something
with real substance and a point of view.’
Op-ads have catapulted IBM into conversations around
board rooms, in governments and on websites and blogs all
around the world. IBMers like Jeff Jonas, IBM Fellow and
chief scientist of the IBM Entity Analytics Group, suddenly
became powerful figureheads for the company, blogging
about data and offering thought leadership.
The beauty of beta / IBM’s marketing strategy is linked to
a broader set of business objectives, specifically the 2015
Road Map, which identifies four growth strategies (growth
markets, business analytics, cloud and Smarter Planet) to
drive $20bn in revenue. Yet there is also room for sponta-
neity. Ann Rubin says: ‘If a beta project supports Smarter
Planet and enables the story to be told in a relevant way, we
take advantage of that. We are aligned to the Road Map, but
if additional things come up we go for it.’
Examples of this in action include Smarter Cities. This
started out as a $70,000 web project, a computer-generated
web city that aimed to incorporate the best elements of cit-
ies all over the world. Hahn reflects: ‘We sought to combine
the buildings of Chicago, the policing of London and the
traffic management of Singapore, so we built a computer-
generated Smarter City that showed how IBM systems can
change how cities manage their utilities. This small web proj-
ect turned into print and outdoor advertising, as well as our
first iPad and touchwall projects for IBM.’
Access to experts / IBM also invested in TV spots starring
employees describing what they do with the proud tagline
‘I’m an IBMer’. Fast-talking 30-second spots saw the brand
whizz through how data systems could help control traffic or
manage healthcare. As Ryan Blank explains: ‘The ads were
about helping IBMers translate their big brain supersize
stuff. We would say: “Tell us what you’re working on and
pretend I’m in third grade.”’
2015 Road Map target
$20bn
In a world where everything is
a tweet, we wanted something
with real substance and a point
of view.
Michael Hahn, Ogilvy & Mather New York
IBM's Research &
Development budget
$6bn
IBM's estimated brand
value (Interbrand)
$75bn

contagious
analyst insight / IBM
By Ian Stephens, Saffron Brand Consultants /
Analyst
Insight IBM = IQ + EQ
EQ (emotional intelligence) is the secret of IBM’s recent
brand success.
Successful branding is quite straightforward: find a
brand idea with the right mix of rational and emotional
messages (IQ & EQ) and build it into absolutely every-
thing you say and do in the marketplace.
Well, it’s easy in theory but doggedly difficult in
practice, because almost all organisations have such an
IQ-biased business culture that they find it extremely
hard to embrace the EQ part.
IBM’s Smarter Planet brand concept has both,
whereas the brand strategies of close competitors like
Accenture and Oracle are more or less ‘pure IQ’ driven
and consequently fail to engage their audiences nearly
as well.
By identifying the single-minded brand idea of ‘prog-
ress’, which connects tightly to the substance of their
business strategy, the IBM team gave themselves a head
start. The bright and optimistic visual identity also helps
tell the story.
Smarter Planet is an idea confidently rooted in
thought-leadership, even though, in reality, most of what
IT companies like IBM actually get paid to do is pretty
functional – the 21st century equivalent of laying train
tracks.
This is effective because their research shows that
IT customers tend to believe that any one of the big
firms has the capability to actually deliver the work they
are looking for. But they still have to choose one, so
intangibles like thought-leadership become much more
important in the decision making process than might
otherwise be justified in a purely rational (IQ) world.
So it gets at least 9 out of 10 in our book.
But it’s not perfect. The long copy adverts are well
written but they are still ‘adverts’, competing for the
reader’s attention alongside unbiased editorial, so are
probably rarely actually read. And whilst the Smarter
Planet concept and the visual identity contain plenty of
EQ, the rest of the content is often quite bland, corpo-
rate business-speak, which takes some of the shine off.
Finally, the future may not be quite so bright. Whilst
IBM’s traditional competitors are unlikely to find it in
themselves to respond effectively, many of their potential
next-generation competition (Google, Amazon, Face-
book?) come with EQ booster rockets already fitted as
standard. When it comes to branding in IT, companies
like Google and Apple make old-school firms like IBM and
Accenture look flat-footed. Perhaps IBM will anticipate
this and move things on again whilst they still have time.
History isn’t on their side though.
Ian Stephens / Principal / Saffron Brand Consultants,
London / ian@saffron-consultants.com
case study / ibm / 74 /75
'You’ve always got to focus
on reinvention.’
Ginni Rometty

case study / ibm /
Brand Map / IBM
Challenge / Solutions /
ExpertsReplace IBM’s disparate and product-led
marketing
Define IBM’s purpose in the world by
showing that it stands for progress
Drive new business
Enter new markets IBMers have played a leading role in
communicating Smarter Planet, thanks
to their digital footprint. A few have
starred in films or TV ads, while others
write blogs or communicate via Twitter,
LinkedIn and Facebook.
‘When we say access to experts we
mean it,’ says IBM’s Ann Rubin.
IBM’s super-computer Watson defeated
two human champions in US quiz show
Jeopardy in 2011. Millions of people
saw how Watson could understand
unstructured data and were introduced
to the concept of cognitive computing,
where machines can learn and refine
data, as well as understand human
behaviour.
Watson
The ads were about helping
IBMers translate their big brain
supersize stuff. We would say:
'Tell us what you’re working on
and pretend I’m in third grade.'
Ryan Blank, Ogilvy & Mather, New York
Centenary
In a ‘rare look back’, three films racked
up a million YouTube views and showed
what IBM had achieved between 1911
and 2011. Key milestones included its
partnership with the space programme
in the late 1960s, the personal computer
and the barcode. It also promoted IBM
as a progressive employer.
Smarter Planet op-ads break down
complex issues such as smarter
commerce and predictive maintenance
and provide a launching pad for
discussion. Recent iPad executions have
enabled user participation, too.
The ads have helped to catapult IBM
into conversations around boardrooms,
in governments and online.
Op-ads 2015 Road Map
IBM’s 2015 Road Map is a set of
business objectives focusing on four
areas: Smarter Planet, cloud, growth
markets and business analytics.
While Smarter Planet is aligned to the
Road Map, it can also be spontaneous,
as in the case of Smarter Cities which
evolved from a web project.
At Masters Golf and Grand Slam tennis
tournaments, IBM is a sponsor and
technology partner. It shares data in
real time and, this year, at the US Open,
enhanced the spectator experience
through an iPad app and touch wall.
Sponsorships

contagious 76 / 77
Takeouts /Results /
Establish an overarching premise that
you stand for. In IBM’s case, this is
Progress.
Have one message for shareholders,
customers and employees. After all, they
are united by being stakeholders in the
future success of your business.
Business audiences and consumers
aren’t mutually exclusive. IBM shows
you can target both, particularly through
sports sponsorships that enhance the
spectator experience.
Find simple, original and memorable
ways to demonstrate your product. A
documentary on cognitive computing
would not have attracted the millions
of viewers that Watson on Jeopardy
achieved.
Invite agency partners into your
organisation. Confining them to the
marketing team will restrict the quality of
the communications they can create for
your company.
$78bn
IBM’s stock price rose from $125 to $167 from September
2010 to September 2011, a 38% increase, representing
an increase in market cap of $78bn
28%
Smarter Planet was credited with directly
generating 28% more leads in 2011, representing
32% more potential revenue
$75bn
Interbrand ranks IBM as the world’s third most valuable
brand, behind Coca-Cola and Apple, with a brand value
of more than $75bn
Smarter Planet
revenue growth in
2011
Q3 2012 revenue
Years that IBM has
been with Ogilvy
50%
$24.7bn
Ogilvy & Mather, North
America was ranked by Effie
as the most effective agency
in North America
The Smarter Planet media investment has paid for itself
more than ten times over in directly attributable profit
18
37%
Sales attributed by IBM to Smarter Planet increased
by 37% in 2011
18 awards
IBM was named the most effective brand at the Effies
in May, picking up a total of 18 awards
IBM wasn’t after a campaign,
it wanted an agenda that would
help drive business back through
the enterprise. Jon really wanted
to show that IBM’s mission is to
make the world work better.
Michael Dobak, Ogilvy & Mather, New York

Contagious_IBM

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