Inside Steve's Brain (14 page)

The photos were run without identifying labels, a strategy previously used by the agency for a 1984 Nike campaign featuring famous athletes. The lack of labels challenged the viewer to figure out who the subject was. This strategy makes the ads inclusive and involving. It rewarded those in the know. If you knew who the ad featured, it saluted you as an insider, part of the cognoscenti.

Jobs was involved from the beginning, submitting personal heroes like Buckminster Fuller and Ansel Adams. He also used his extensive contacts and formidable persuasive powers to secure permissions from the likes of Yoko Ono, John Lennon’s widow, and the estate of Albert Einstein. But he declined the agency’s suggestion to feature Jobs himself in one of the ads.

Advertising has always been extremely important to Jobs, second only to the technology. Jobs’s long-stated ambition is to make computers accessible to all, which to him means they have to be advertised to the public. “My dream is that every person in the world will have their own Apple computer. To do that, we’ve got to be a great marketing company,” he has said.
¹⁹
Jobs is immensely proud of Apple’s advertising. He often debuts new ads during his Macworld keynote speeches. If he’s giving a product presentation, there’s usually an ad to accompany the new product, and Jobs always shows it off to the public. If the ad is particularly good, he’ll show it twice, obviously delighted.

More than anyone else in the PC industry, Jobs has strived to create a unique, non-nerdy image for computers. In the late 1970s, Jobs hired Regis McKenna, a Silicon Valley advertising pioneer, to help make Apple’s early machines appeal to ordinary consumers. The advertising had to communicate to consumers why they needed one of these new PCs. There was no inherent demand for home computers: the ads would have to create it. McKenna drafted colorful ads showing computers in domestic settings. The ads were written in simple, easy-to-understand language, with none of the technical jargon that dominated competitors’ ads, who, after all, were trying to appeal to a completely different market—hobbyists.

The first magazine ad for the Apple II shows a preppy young man playing with the machine on a kitchen table, while his wife, washing the dishes, looks on adoringly. The ad’s sexual politics may have been old-fashioned, but it conveyed a message that Apple’s PCs were useful, utilitarian machines. The kitchen setting made them seem like just another labor-saving appliance.

The importance of advertising to Jobs is clearly illustrated by his choice of CEO to run Apple in its early days: John Sculley, a marketing executive from PepsiCo who had used advertising to build Pepsi into a Fortune 500 company. Sculley was Apple’s CEO for ten years, and though he made some strategic mistakes, he was stunningly successful at using marketing to grow Apple. When he took over in April 1983, Apple had $1 billion in revenues. It was a $10 billion company when he left a decade later.

In 1983, Apple was one of America’s fastest growing companies, but it needed an experienced executive to manage growth. Just twenty-six, Jobs was judged by Apple’s board to be too young and inexperienced to handle the job himself, so Jobs spent many months finding an older executive he could work with.

He chose Sculley, the thirty-eight-year-old president of PepsiCo, who’d masterminded the “Pepsi Generation” advertising campaign, which helped unseat Coke as the number-one brand for the first time in its history. Jobs spent several months courting Sculley, an experienced executive and a marketer extraordinaire, to run the company.

During the “Cola Wars” of the ’70s, Sculley massively boosted Pepsi’s market share by spending huge sums of cash on savvy TV advertising. Expensive, slick campaigns like the “Pepsi Challenge” transformed Pepsi from an underdog into a soda giant on equal footing with Coca-Cola. Jobs wanted Sculley to apply the same advertising chops to the fledgling market for personal computers. Jobs was especially worried about the Macintosh, which would debut in a few months. Jobs felt that advertising would be one of the major factors in its success. He wanted the Mac to appeal to the general public—not just electronics freaks—and advertising a weird and unfamiliar new product would be key to that. Sculley had no technology experience whatsoever, but it didn’t matter. Jobs wanted his marketing expertise. Jobs wanted to create an “Apple Generation.”

Sculley ran Apple in partnership with Jobs. He became Jobs’s mentor and teacher, applying his marketing expertise to the nascent but rapidly growing PC market. Sculley and Jobs’s strategy at Apple was to build sales rapidly and then out-advertise the competition. “Apple hadn’t yet realized that as a billion-dollar corporation it had immense advantages we hadn’t exploited,” Sculley wrote in his autobiography,
Odyssey
. “It’s almost impossible for a company with sales of $50 million or even $200 million to invest in the kinds of effective television advertising campaigns you need if you’re going to leave any impression at all.”
²⁰

Jobs and Sculley immediately boosted Apple’s advertising budget from $15 million to $100 million. Sculley said their goal was to make Apple “first and foremost a product marketing company.” Many critics have dismissed Apple’s advertising flair, rejecting it as trivial and unimportant. Pure flash; no substance. But at Apple, marketing has always been one of its key strategies. Apple has used advertising as an extremely important and effective way to distinguish itself for the competition. “Steve and I were convinced we had the secret formula—a combination of revolutionary technology and marketing,” wrote Sculley.
²¹

Sculley’s ideas have been very influential on Jobs, laying the groundwork for many of Jobs’s marketing techniques at Apple today.

At PepsiCo, Sculley was responsible for some of the earliest and most successful examples of lifestyle advertising— emotionally charged spots that tried to reach people’s minds through their hearts. Rather than try to market specific attributes of Pepsi over other sodas, which were negligible, Sculley created advertising that articulated an “enviable lifestyle.”

Sculley’s “Pepsi Generation” ads featured wholesome American kids engaged in idealized leisure pursuits: playing with puppies in a field or eating watermelon at a picnic. They portrayed uncomplicated vignettes of life’s magic moments, set in a mythical middle America. They were designed to appeal to baby boomers—the fastest-growing, wealthiest consumers in the post-World War II economy—by portraying a lifestyle they’d aspire to. They were the first “lifestyle” ads.

The Pepsi commercials were treated like miniature movies, shot with the highest production values by Hollywood filmmakers. When other companies were spending $15,000 to shoot a commercial, Pepsi spent between $200,000 and $300,000 for a single spot.
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Jobs does exactly the same thing at Apple today. Apple is famous for its lifestyle advertising. It never loads its ads with speeds and feeds, functions and features, like everyone else. Instead, Apple engages in lifestyle marketing. It portrays hip young people with “enviable lifestyles,” given to them courtesy of Apple’s products. Apple’s highly successful iPod ad campaign shows young people grooving to the music in their heads. There is never any mention of the iPod’s hard capacity.

Sculley also perfected big splashy marketing events, like Macworld, as news. Sculley dreamed up the “Pepsi Challenge”— a blind taste test that pitted Pepsi against Coke, staged at grocery stores, malls, and big sports events. These challenges often caused such a splash that they would often attract local TV crews. A spot on the local TV news that evening was worth far more than any thirty-second commercial. Sculley upped the stakes: organizing celebrity challenges at big sports games that would often garner massive publicity. “Marketing, after all, is really theater,” Sculley wrote. “It’s like staging a performance. The way to motivate people is to get them interested in your product, to entertain them, and to turn your product into an incredibly important event. The Pepsi Generation campaign did all this in scaling Pepsi to epic proportions and making a brand bigger than life.”
²³

Jobs uses the same technique to introduce new products at the annual Macworld Expo. Jobs has turned his trademark “one more thing” keynote speeches at Macworld into massive media events. They are marketing theater, staged for the world’s press.

The Macworld speech is just one part of much bigger, coordinated campaigns that are executed with a precision that would impress a general. The campaigns combine rumor and surprise with traditional marketing, and rely wholeheartedly on secrecy for their effectiveness. On the outside it can look somewhat chaotic and uncontrolled, but they are tightly planned and coordinated. Here’s how it works.

Weeks ahead of a secret product announcement, Apple’s PR department sends out invitations to the press and VIPs. The invitation gives the time and location of a “special event” but contains scant information about its nature or any upcoming products that might be revealed. It’s a tease. Jobs is effectively saying, “I’ve got a secret, guess what it is.”

Immediately, tongues start wagging. There’ll be an explosion of blog posts and press articles speculating on what Jobs will announce. In years past, the speculation was limited to specialist Apple websites and fan forums, but more recently the mainstream press also reports the rumors. The
Wall Street Journal
, the
New York Times
, CNN, and the
International Herald Tribune
have all written breathless articles looking forward to Jobs’s product presentations. The rumor-mongering surrounding Macworld 2007—where Jobs introduced the iPhone—even made the nightly news on all the cable and TV networks, which is unheard of for any company in any industry. Not even Hollywood can garner as much attention for its movie premieres.

This kind of worldwide publicity is worth many hundreds of millions of dollars in free exposure. The launch of the iPhone in January 2007 was the biggest to date. Standing onstage in San Francisco, Jobs single-handedly eclipsed the much larger Consumer Electronics Show in Las Vegas, which was happening at the same time. The CES is more important economically than Macworld, yet Jobs and the iPhone handily stole its thunder. Jobs’s iPhone launch also overshadowed announcements from much bigger companies, including the introduction of the consumer version of Microsoft’s Vista, and became the biggest technology story of the year. Harvard Business School professor David Yoffie estimated that the iPhone rumor reports and follow-up stories were worth $400 million in free advertising. “No other company has ever received that kind of attention for a product launch,” Yoffie says. “It’s unprecedented.”
²⁴

It was so successful that Apple didn’t spend a penny to advertise the iPhone before its launch. “Our secret marketing program for the iPhone was none,” Jobs told Apple employees in a companywide address. “We didn’t do anything.”

Of course, there wouldn’t be this kind of attention if the product plans were known ahead of time. The whole stunt relies on secrecy, which is tightly enforced. At San Francisco’s Moscone Center, the Apple booth is shrouded in a twenty-foot-high black curtain. The curtain’s only entrance, at the back, is manned by a guard who carefully checks the credentials of all who try to enter. Two more guards are stationed at opposing corners of the rectangular booth, monitoring the sides. Everything inside the curtain is also wrapped, including the tops of the display stands. Even the main presentation stage, which sits in the center of the booth, is completely wrapped with fabric on all sides. All the advertising banners hanging from the ceiling are wrapped on all sides. The banner wrappings have elaborate pulley mechanisms to remove the curtains after Jobs makes his announcement. There are big banner ads upstairs at the entrance, which are also wrapped in black canvas. The banners are protected 24/7 by guards. One year, the guards caught some bloggers taking pictures and forced them to erase their memory cards. “The urge to clamp down on information sometimes borders on paranoia,” wrote Tom McNichol in
Wired
magazine.

Several weeks before launch, Apple’s PR department sends the new gadget under strict nondisclosure agreements to three of the most influential technology product reviewers: Walt Mossberg at the
Wall Street Journal
, David Pogue at the
New York
Times
, and Edward Baig at
USA Today
. It’s always the same three reviewers, because these three have proven track records of making and breaking products. A bad review can doom a device, but a good one can make it a blockbuster. Mossberg, Pogue, and Baig prepare their reviews for publication on the product’s launch date.

Meanwhile, Apple’s PR department contacts the national news and business magazines offering a behind-the-scenes “making of” peek at the product. This “making of” is usually anything but—most details are withheld—however, it’s better than nothing and the magazines always take Jobs up on it. Putting Jobs’s face on the cover moves magazines on the news-stands. Jobs plays off old rivalries. He pits
Time
against
Newsweek
and
Fortune
against
Forbes
. The magazine that promises the most extensive coverage gets the exclusive. Jobs uses this same trick time after time, and it always gets results. Jobs started this practice with the original Mac and called them “sneaks,” as in sneak peeks. Familiarizing a reporter with a new product ahead of time usually guaranteed a more favorable review. When Jobs launched a new iMac in 2002,
Time
magazine got the exclusive behind-the-scenes story, and in return Jobs got the front cover and a glossy seven-page spread inside. It was timed perfectly for the machine’s introduction at Macworld.

During the speech, he always saves the biggest announcement for last. At the end, he’ll say there’s “one more thing,” almost as though it were an afterthought.