CES introduces new marketing reality

More tech companies view CES as a platform to reach more audiences than ever.

More and more tech companies view CES as a platform to reach more audiences than ever

The Consumer Electronics Show (CES) in Las Vegas in January broke records, with more than 150,000 attendees and 2,500 companies. While a fair share of those companies don't sell a thing directly to consumers, they're starting to market as if they did.

Many of the companies are suppliers, several degrees removed from consumers: their products and logos are components, buried within laptops, cell phones, PDAs, and other members of the digital-appliance phylum. And while purists will tell you that the CES show has always been a place where b-to-b and b-to-c companies come together to do business, not just show off the latest gadgets, many of the b-to-b companies are also there to talk about how their technology makes gadgets a reality.

Companies ranging from Cisco Systems to Intel to Seagate Technology are making greater investments in consumer marketing, because with the b-to-b market consolidating, they see consumers' ravenous appetite for gadgets as their best growth opportunity.

The Consumer Electronics Association (CEA), which produces CES, predicts that consumers will spend $135.4 billion on electronics and technology this year, up 8% from 2005, and 11% over 2004.

Consequently, the consumer electronics market, and in particular the digital lifestyle category, is the "next great white hope" for the technology industry, because it is showing the most robust growth, and garnering more and more media coverage, says Rob Enderle, principal analyst with the Enderle Group.

"These companies are not just showing current partners and investors that they're part of the consumer market," says Enderle. "[They're also] showing potential partners and investors that they're playing a pivotal role [in that market]."

As the tech industry goes, so goes the media. Burghardt Tenderich, North America GM for Bite Communications, which recently acquired virtual boutique agency Parachute Marketing to enhance its own consumer skills, says that since media is now less focused on pure technology and more devoted to consumer products, b-to-b companies have figured out it is time to follow. "You either join in or get left out," adds Tenderich.

That constitutes a big change in marketing culture over a few years ago. During the tech boom, many of the companies making headlines were b-to-b firms, Tenderich points out. But since the bust, corporate spending has been sluggish. Meanwhile, the promises made during the boom are now coming true, in terms of usability and affordability for consumers.
So those b-to-b companies are eager to position themselves in the digital lifestyle stories, whether it's Intel talking about its new digital media technology platform, Viiv, or companies with less familiar brands such as PortalPlayer, which makes chips for Apple Computer's iPod.

Freescale Semiconductor is one such company that has chosen to join in. The Motorola spinoff attended CES for a third year, part of the company's branding and awareness efforts, explains Matthew Piette, global branding director.

"We wanted to meet with customers, and our customers' customers, and show that we are a key player in [the consumer electronics] market," explains Piette. "The business reality of this market is that there is a lot of competition, so you must find a way to rise above the noise. We wanted to show that semiconductors is where it all starts, and showcase that technology.

"All consumers care about is that the device works," says Piette. "It's implicit that the device will work. We're contributing a lot of R&D dollars to get that experience right for consumers. So we need to make sure we're seen as a key player in this market making that experience possible."

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