Gateway ads target small business

The PC maker best known for its folksy ads and consumer PCs is kicking off a new "Gateway@work" advertising campaign to bulk up business sales.

The campaign, developed by Interpublic Group's McCann-Erickson Worldwide, aims to boost awareness of the company and its products among medium-size businesses, says Ron Smith, vice president of marketing for the company's Gateway Business division.

Half of Gateway's (NYSE: GTW) $9 billion in annual revenue comes from business, but most of that is from small business. The San Diego PC maker hasn't been a significant supplier to large corporations, where rivals Dell Computer, Compaq Computer and IBM lead.

The Gateway@work campaign begins Monday in business-related publications including Fortune, Forbes, Business Week and Inc. magazines, and in technology and government-oriented trade publications, Smith said. It may be expanded to broadcast outlets in the second quarter.

Keeping up
The new business and government marketing effort comes as rivals such as Dell and Hewlett-Packard Co. are making strides in Gateway's mainstay consumer-PC market. In response, Gateway has recently introduced new business-oriented products, such as servers prepackaged with Internet access and e-mail programs.

Smith said the business division's marketing budget, including the ads and direct-response mailings, will increase by about $20 million, to $50 million, this year. As part of the new campaign, Gateway will revamp its existing business-specific eSource Web sites by adding testimonials and service information, and it will expand direct mailings to larger companies. Gateway@work marketing materials also will be on display at the company's Gateway Country brick-and-mortar stores.

Print ads aim to establish Gateway's business credentials with servers for "networking the enterprise," expanded telephone support lines for technology managers, and dedicated sales and support teams that "want to go one-on-one with you," according to the ads.

Other print ads will showcase business services, such as a laptop-replacement program. That service lets travelers with a damaged laptop PC obtain repairs or a temporary replacement at any of its 200 Gateway Country stores, says Tom Hume, director of marketing communications for Gateway Business.

This isn't the first time direct-seller Gateway has tried to crack the corporate market. In 1997, it paid $240 million for PC server maker Advanced Logic Research Inc. to anchor a corporate sales push. That drive fell short and Gateway pulled back from corporate sales.

One sign of its struggle: Gateway's share of U.S. PC server shipments declined in the third quarter to 2.3% from 4.3% in the year-earlier period, according to International Data Corp.

Still, the PC company never abandoned the corporate market. Early last year, it began recruiting corporate PC dealers and later signed General Electric Co.'s GE Information Solutions to carry its products to corporate customers.

Hume says the Gateway@work campaign is intended to stretch "across businesses," aiding GE's effort with corporate giants, while smoothing the way for its own sales force to court small and midsize companies.