In what could be called an unconventional choice by a company struggling to stay relevant in the mobile space, Palm chose to launch the first shot of its campaign to market the Pre smartphone on Facebook.
More than 4,000 people who signed up to view the ad, and many were left wondering why Palm chose to use a Zen-like approach to show how the Pre -- seen as an iPhone contender -- makes it a breeze to manage life rather than hammering home the features. While Palm would not comment on the campaign's ad spending, some ad executives estimate a price tag of between $50 million and $75 million.
The launch is arguably the most important in Palm's 17-year history, as the company that gave the world the Palm Pilot aims to regain its former stature as a leader in mobile computing. The Pre matches iPhone's $200 price tag after a mail-in rebate, and will go on sale Saturday exclusively from Sprint. The No. 3 U.S. carrier will launch its own Pre advertising campaign Saturday.
Zen-like 'Flow'The 60-second spot, titled "Flow," hints at the ways Pre can manage a user's life, showing the Zen-like ease with which a user can glide among photos, calendars and e-mail and among social, personal and work life. The commercial, shot in China, features a young woman holding the phone, surrounded by concentric rings of hundreds of Chinese dancers who represent the people in her life. If the spot is reminiscent of the 2008 Beijing Olympics, it's because Sun Yupeng, who directed the commercial's choreography, was also responsible for the Olympics opener.
But whether this spot will fire up consumers to head to their nearest Sprint store is an open question.
"They're leading with an emotional offering, which I think will be a disconnect," said Jon Kaiser, a former ad executive turned independent consultant. "People are emotionally attached to their phones, but they also have a rational set of criteria about a phone's features set, its applications and functionalities."
"[Palm has] taken a metaphoric and emotional approach to introduce the product. I think people will say, 'What a pretty ad,' but later they won't remember what it's for," Mr. Kaiser added.
While some viewers applauded the approach, a sampling of opinions on Facebook bears out Mr. Kaiser's observations. One fan wrote, "I am in love with the phone, but tomorrow, I will not remember this ad at all." Said another, "Show the features of why it is the best phone out there."
Relaunching the brandThe first salvo was meant to relaunch the Palm brand, hence the high-concept approach, said Gary Koepke, co-founder and executive creative director of Modernista, the agency that executed the campaign.
"It's a good-feeling ad," Mr. Koepke said. "We're not trying to be everyone else. It's celebrating that Palm is back and they have something new. We're trying to make a splash."
Future spots will provide more close-ups of the phone and its features, Mr. Koepke said, since the fan base naturally will want to see a features-driven campaign.
"Flow" is expected to air on TV on June 22, according to Modernista. TV and digital will be the campaign's primary media channels. TV buys will focus on prime-time and cable fare such as "Mad Men," "Burn Notice," "Numb3rs" and "Southland." Digital executions will include home-page takeovers on AOL, YouTube and Wired, with digital outdoor placements in office buildings, airports and coffee shops.
The Zen-inspired campaign theme belies the troubled states of Palm and Sprint, which are scrambling to reverse their fortunes, having posted losses for the last several quarters.
Palm has seen competitors Apple and BlackBerry maker Research in Motion erode its market share. Palm has just 4% of the U.S. smartphone market, according to IDC, while RIM leads with 55%, followed by Apple with 20%.
Sprint, which lost more than a million contract customers last quarter, is hoping the Pre has the star power keep its customers from fleeing and lure new ones.
Demand vs. availabilityMerrill Lynch expects Palm to ship 2.5 million phones by year-end, noting that its forecast is about 30% higher than consensus estimates. In contrast, Verizon said it sold a million of its exclusive BlackBerry Storm touch-screen phone in less than three months, and Apple said it took only an opening weekend to sell that many 3G iPhones. Both Palm and Sprint said they are looking to manage demand against availability. Sprint CEO Dan Hesse told an investor conference last month his company does not intend to advertise heavily due to anticipated shortages.
In the absence of a teaser campaign, Palm has banked on early buzz and word-of-mouth since unveiling the product in January, but some analysts said that could prove to be inadequate.
"I don't think outside of the [gadget-following] base and Wall Street, the average consumer even knows what the Pre is," said Matt Thornton, an analyst with Avian Securities. "They should have launched advertising sooner."
The strategy to use Facebook for Pre's soft launch dovetails with Palm and Sprint's fight to reclaim relevance, and what better way to get there than to ride the buzzworthy coattails of social media, especially when the Palm lacks the deep pockets to fund a big-media teaser campaign?
"It's not a surprise. This is an inexpensive, viral channel, and the demographic of the users are early adopters who are receptive to technology," said Bill Ho, wireless director at Current Analysis.
Sprint is plugging Twitter in its latest "Now Network" campaign, and the company is hoping its Facebook association can earn it some relevance points. And without the extensive developer network of the Apple iPhone, it has to rely on a few high-profile app partners such as Facebook, which, incidentally, will have a starring role in Sprint's Pre commercials.
