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SAP for small business prompts company to "go long" on TV

Your next conversation with your CEO or CFO about a new ERP system might go a little easier, thanks to a new ad campaign by SAP. The software giant is wooing your boss during NFL games. The ad is catchy, but to some experts, SAP's strategy is questionable.

Here's the commercial: A 30-something guy with stylish glasses, a decent haircut and no pocket protector in sight is reciting a testimonial for the camera. "We can afford SAP software on a midsize company budget," he says confidently, pausing for a split second before the doubt creeps in. "This better not be another prank by the guys in procurement."

Cue the music and the tagline: "SAP is great for companies. Not just great big companies."

The German software company has expanded to network television its effort to woo midsized businesses, running a national campaign during the NFL season aimed at dispelling the notion that its first-class software is just for big league companies. (Maybe the subliminal feel-good message is that midsized companies are big league players too!)

SAP AG has advertised on cable sporting events before, said Costanza Tedesco, vice president of global advertising at SAP, but this is the first year the company has bought time during network football games. The spots, which launched Oct. 30 and run through the NFL season, tackle what the SAP advertising team calls the "four toos," Tedesco said.

"When we go about planning a campaign like this, we talk to customers and prospects, in this case, midsize company decision makers, about why they either were or were not considering SAP," Tedesco said. "Over and over, we heard the same four reasons: SAP is too big, SAP is too expensive, SAP is too complex, and SAP is too slow."

Sandwiched between the familiar Bud Light and Chevy truck ads, the 15-second spots seem a bit incongruous, even to a reporter who covers IT. Surely for many in the viewing audience on any given Sunday, they must be downright mysterious. But that may be the point, analyst Peter Kim said.

"A software company pops up, and you say, 'Huh!' That's the premise behind behavioral targeting. You see ads in places that are unexpected yet may be relevant to you," said Kim, who covers advertising for Forrester Research Inc. in Cambridge, Mass.

SAP hopes so. The intent of the ads is to demonstrate "an understanding and sympathy for these midsize enterprise leaders and where they are coming from," Tedesco said. "We're hoping that if we can show a realistic portrayal, it will spark some kind of recognition and that we will also demonstrate that SAP is a company that understands them."

Classic waste of money

In addition to "Prank," the spot described above, the campaign includes three more versions. Aimed at a new generation of IT executives, the ads feature men and women of various ages and races and demonstrate a subtle, if insider, humor not usually associated with the software company.

In one, a middle-aged man passes on the "juicy tidbit" overheard at the company's recent "offsite" that SAP has software for midsized businesses. "Trust me, it's juicy," he whispers. In another, a 50-ish man learns that thousands of other midsized companies use SAP software. He responds: "Does this mean I'm not the maverick nonconformist I thought I was?" An attractive woman stars in the fourth spot. Pleased to learn that SAP can "grow" with the company, she says emphatically, "That's great! Because we are definitely going global." Pause and wince. "Just as soon as we go national."

Sympathy for the IT insider notwithstanding, running the commercials during NFL games, when a CEO or COO is likely to be watching TV, is no accident, concedes Michael Shubra, director of global advertising for SAP. "That was definitely our strategy from a messaging standpoint -- to hit the CEO and secondarily the CFO, the business-side decisions makers. So, yes, the assumption is that when the CIO or other IT-responsible people come to their CEO with this recommendation, that we have warmed the market for that conversation," Shubra said.

CIO reaction to the ads was decidedly mixed.

Larry Rencken, CIO of Welch Foods Inc., the Concord, Mass.-based jam and jelly maker, said the ads resonate with him. "If I were a plumber, I'd probably be cracking another beer instead of paying attention to the ad. Truthfully, I might be cracking another beer anyway, but still be focused on the ad," he quipped.

But Rencken, who uses ERP software from SAP archrival Oracle Corp., said he believes SAP will "see some lift" from the campaign, "and will very likely get a reaction from Oracle, too."

Likewise, Howard Roundy, director of IT for the New Hampshire State Liquor Commission, pronounced the ads "a good step for SAP."

"Because of their past history they are perceived as being large, expensive and difficult to implement, and therefore not suited to the midsized market," Roundy said. "I see this campaign as a complement to their efforts in the IT and Finance trade magazines and shows. I also applaud them for recognizing that the midsized market is a viable growth area."

And both Roundy and Rencken said the ads will have "warming" effect on CEOs. CIO Zeke Duge, on the other hand, dismissed the campaign as a "classic waste of money."

"Holy moly, the last thing I want to think about when I am watching a football game is the in-depth impact of either accepting a new vendor or changing vendors on a system that is critically important to my success," said Duge, who oversees IT at Smart & Final Inc., a Los Angeles-based warehouse grocer. He said the ads "trivialize the relationship" between a vendor and an enterprise resource planning customer.

"You don't enter into these contracts lightly, and you certainly don't enter into these things with the same abandonment that you try a new beer during the commercials," he fumed. "I can think of a 100,000 ways to spend that money far more effectively. There are a limited number of people who will make these decisions. Find out who they are, what they need and go after them, but don't try to sell me a six-pack of beer."

Ego trip

Indeed, advertising on national TV is much less efficient for business-to-business companies than targeting potential customers through print or mail campaigns, said Forrester's Kim. SAP will connect with "a lot of 16-year-old kids looking for their football idol to score a touchdown."

But Kim was impressed that SAP approached the campaign with a strategy in mind.

"A lot of times the real reason is to appease the ego of the CEO or the head of marketing, because they like to see their logo on TV. That happens a lot more often than you think," he said.

"I worked in a pretty big company that spent a lot of money on the NFL, and one reason was that the COO was going to be watching the Patriots game every Sunday on CBS, so they buy 30 seconds in that game," Kim said. "It's the wrong reason to do it, but it happens more often than people like to admit."

Holy moly, the last thing I want to think about when I am watching a football game is the in-depth impact of either accepting a new vendor or changing vendors on a system that is critically important.

Zeke Duge, CIO, Smart & Final

Also, reaching a mass audience can bring benefits other than the next customer, Kim said, citing a study done by Hartford, Conn.-based United Technologies Corp. showing that 27% of the company's total market value was driven by external communications. Southwest Airlines Co., in a similar study, tied a certain percentage of its stock price to public relations and ads. "So the SAP campaign may not be so much to reach procurement people, as reaching the financial markets -- getting the company's brand name out there," Kim said.

The wildly popular AFLAC commercials are another example of a primarily business-to-business customer that has reaped benefits by advertising in a consumer space, Kim said. "The consumer can't do anything about AFLAC; your company has to buy the insurance, but it's a way of building brand awareness."

SAP declined to disclose numbers on how well the campaign is going, except to say, so far so good, according to the SAP dashboard that measures traffic to the company's Web page after the commercials air.

"I can tell you that just based on historical data, we are very, very pleased with the results of this campaign so far, not only in terms of the number of folks that are coming to the page in general but also the amount of time they are spending on the landing page and looking at the different customer success stories," Tedesco said.

Since the campaign launch on Oct. 30, SAP's stock price is up 4.4% to $51.64, as of close of day Monday, from $49.46. The magic of football?

Let us know what you think about the story; email: Linda Tucci, Senior News Writer

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