Jerry Gibbons, President of Doyle Bane Bernbach Advertising met with client Bill Gates of Microsoft in 1982.
‘Our feeling is that you’re not spending at a level that’s appropriate for your company right now’ Gibbons told Gates, whose advertising budget was $250,000. Gibbons took a bar napkin, drew a circle – ‘this is your industry today’ – marked out a pie section, saying ‘this is your current share, and as you know, the industry is going to be growing’. Gibbons drew a larger circle to represent the difference between $1.5 billion and $5 billion. ‘This is how it’s going to be growing in the next few years, and good strategy for your company would be to capture as much share of the market as you can now while share points are cheap. Share points are cheap because the market size is small. As the market grows the cost of acquiring share points is going to increase greatly. If you can increase your share, then when it becomes more competitive, all you’ll have to do is protect your share.’
‘He grasped that concept pretty quickly’. Gates went back to Seattle and doubled his advertising budget.
Source: Chuck Pettis, Technobrands, p145
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