HP has done many PR agency reviews in the past year. What's driving this?
Mendenhall: What we continue to see with audiences, consumers being one of these key audiences, is fragmentation. They continue to fragment across the digital landscape, across networks, across social platforms, and across communications platforms. As we see this fragmentation, we also see different levels of engagement taking place.
There are the more brick-and-mortar companies that have great influence. Then there is the informal world, which we believe includes key bloggers, social sites, and Twitter. These become equally as important to engage with and manage. When we think about the partners that we'll bring in to help us manage this, we look for more specificity and more expertise.
How much of the marketing budget goes to digital? How integrated is digital throughout HP?
Mendenhall: It's approximately 40% of the marketing budget. I think digital is not just a marketing and communications strategy, I think it's a company strategy. There is fundamentally good consumer and customer insight coming out of customer-created forums, as well as a high degree of accuracy of customers helping each other with issues. We help them dialogue with each other and with us.
For HP Labs, we're engaging research institutions and univer- sities to further their ability to innovate much quicker. Having a very smart digital strategy for a company goes beyond marketing communications and certainly can lend itself to R&D, customer support, and service, so it becomes an overall strategy for a company.
Did the downturn alter your role or the marketing function at HP?
Mendenhall: No. There are segments of our business and portfolio pieces that were actually countercyclical to the recession. Revenue was actually up in our enterprise group in the solutions, services, systems area, so it's countercyclical to a consumer downturn.
HP is very well positioned in terms of its mix in portfolio to manage through this recessionary period. But you don't wait for a recession to manage your operation in a more efficient and productive manner.