Talk about the recent evolution of the corporate brand, specifically from the time the company acquired IBM. What are you focused on at the moment?
Roman: We ran into that whole downturn in the PC space and the economic downturn in 2008 and 2009. One of the consequences was we pulled back a lot on the marketing side. The focus was more on the short term: building the supply chain, making sure we had the right products, and going after the right distribution agreements in various countries around the world.
We've outgrown the market for six or seven quarters in a row. We've seen a very significant growth in our business and we've reached major milestones, but we haven't seen that same parallel growth in the brand.
As of a year ago, we started to view this as a major priority for the company. A lot of our growth is coming from the consumer space and as we move into some of the new categories, such as tablets and other mobile inset devices, it becomes crucial for us to have a brand people recognize. We want to bring the Idea and Think brands together much more consistently under the Lenovo brand.
We also want to make the Lenovo brand more relevant to some of the new markets we're going after, especially in the consumer and small business space. That's all part of the rationale for my coming in. We had not filled the CMO role for a couple of years because that wasn't really a company focus. However, I was brought in last year with a specific mandate to build a stronger branded presence of the company worldwide.
You brought on Saatchi & Saatchi last September and launched a new campaign in April. Is a lot of the company's marketing investment geared more toward traditional than social?
Roman: Advertising is one part, but a bigger focus was on building the Lenovo brand and being more consistent, so it's in terms of industrial design, PR, and everything we do. On average, the Web-based activities account for significantly more than half of the total spend. Whether you're promoting some social media activist, joint promotional activities, or Web advertising, the online component in some countries is as high as 80% and in others it's around 50%.
Our business is not one that allows us to have a huge advertising budget, so our share of voice is still somewhat limited. We must be very thoughtful in terms of how we build a presence in each of our global markets.
Does PR account for more than 20% of your marketing spend?
Roman: PR certainly is the area growing the most. We have a lot of growth, some very strong products, and we're moving into new spaces. However, I don't think we've been as successful as we should be in terms of getting coverage on the biggest brand story of Lenovo.
We're adding a lot of resources, both externally and internally. We certainly are boosting our PR spend percentage-wise much more than we're increasing our average marketing spend.
Does that include social media?
Roman: Social media is a major investment. We do have a social media team in PR, but we also have a social media team on the Web team. It's one of the fastest-growing areas. We look at it as the mechanism that allows us to interact with our customers and prospects, so we try and keep it not as something we drive in the same controlled way we do PR.
Consumers are getting more tech savvy at a younger age. Does that change your target audience and how you market to different demographics?
We're totally focused on the youth market. We look at college students as the sweet spot within the youth market. In the tech space, they might not necessarily be the only ones buying the products, but they're the ones who determine a brand.
The youth market is a totally global market, so it allows us to be very global. It's also a market that's not as receptive as other markets to traditional advertising. That's why we're more focused in terms of some of the marketing partnerships and use of social media.
That audience also takes its brands and values very seriously. It requires our company to be more focused in terms of what we really do with our products' design, some of the sustainability issues around the products, and our product packaging. That's actually making us rethink many things we do in a very positive way. As we strive to be relevant to that audience, it forces us to rethink a lot of the things we do as a company.
How do you compete with the Apples and other tech companies rolling out tablets?
Roman: A key metric for us is purchase consideration. It's being on the shopping list, getting people to think of us as offering something relevant and different from others. So it's a combination of all sorts of things.
For a product launch, probably the single most impactful component is the PR; it's the reviews of the products. Word of mouth has always been the key driver of interest, and it will remain so in the foreseeable future. So whatever it takes to simulate that word of mouth, that is what we do.
Advertising also plays a role in that. With a new category like the tablet market, we really look at some longer-term investments in building the perception of who Lenovo is in that space. So now we have a mixture of longer- and shorter-term investments.