Case Study: Apple iPod Silhouette Ad Campaign

Released by Apple Computer, Inc., in November 2001, the iPod rapidly grew in sales and by 2005 had become the world’s top-selling MP3 player. With a 1,000-song capacity, the first iPod worked only with Apple computers and retailed at $400. From 2003 to 2005, however, Apple ferociously promoted five new Windows-compatible iPod models, along with the company’s digital music store, iTunes. In an attempt to define the fun associated with the iPod brand and to steer advertising away from the Apple computer, the company released its ‘‘Silhouette’’ campaign.

In October 2003 ad agency TBWA\Chiat\Day (TBWA\C\D) introduced outdoor ‘‘Silhouette’’ ads in Los Angeles, followed by a nationwide print and television launch. All ads displayed black silhouettes of people listening to white iPods and dancing in front of radiant green, yellow, fuchsia, and pink backgrounds. The television spots were accompanied by upbeat music from bands like N.E.R.D. and the Black Eye Peas. The band U2 shocked fans and critics in 2004 by endorsing iPod through the release of a new single, ‘‘Vertigo.’’ Shrugging off criticism, U2’s front man, Bono, stated that the iPod was ‘‘the most beautiful object art in music culture since the electric guitar.’’ Seventy-two hours after the U2 endorsement, Apple stock reached a 52-week high of $53.20 per share. Apple reportedly spent $49.6 million on the ‘‘Silhouette’’ campaign between January and August of 2004.

Apple iPod Silhouette Ad Campaign

Not only did ‘‘Silhouette’’ earn TBWA\C\D a Global Effie from the New York American Marketing Association and a Kelly Award from the Magazine Publishers of America, the agency was nominated as the U.S. Agency of the Year for 2004 by Adweek. Even though analysts’ early forecasts for iPod sales were $400 million, product improvement and the Silhouette ad campaign helped Apple reach an incredible $1.2 billion in net sales during the first quarter of 2005 alone. Despite the fact that iPod’s market share had dropped from 92 percent in October 2004 to 87 percent by March 2005, demand still overshadowed supply.

Historical Context of iPod Silhouette Ad Campaign

Led by CEO Steve Jobs, Apple held a meager 2.5 percent share of the worldwide computer market in 2001. Learning from its proprietary mistakes in the 1980s, the company released Windows-compatible iPods in 2002. Apple also allowed third-party companies like BMW, Bose Corporation, and Griffin Technology to create iPod accessories, which led to more than $100 million in sales in 2004. Apple even allowed Hewlett-Packard to release the Apple iPod from HP.

The first commercial for iPod, also created by TBWA\C\D, aired in 2001. It showed a bespectacled man huddled over an Apple iBook. At first the audience heard only the man’s clicking keyboard, until music from Propellerheads’s ‘‘Take California’’ grew louder. By the end of the spot it became apparent that the man was downloading music onto his iPod. Next TBWA\C\D shifted away from computer-centric ads to develop spots with people singing out loud while wearing iPods. One commercial, which featured a young boy singing Eminem’s ‘‘Lose Yourself,’’ resulted in a lawsuit by Eminem, but it was settled amicably.

Apple needed success from the iPod Silhouette ad campaign. By 2002 the company still had only 5 percent of the computer market. ‘‘The history of Apple is a long, complicated business story with a lot of mistakes made,’’ Lee Clow, worldwide chairman and chief creative officer of TBWA\C\D, told Advertising Age. ‘‘Particularly the decision to stick with a proprietary system for PCs which resulted in Microsoft’s dominance.’’ In 2004 iPod contributed 23 percent of Apple’s earnings. Jobs said that iPod sales ‘‘should also help introduce Windows users to Apple’s clever and stylish designs, thus encouraging more PC users to switch to Macintosh computers.’’ Apple hoped that the fun-oriented, carefree format of the ‘‘Silhouette’’ ads would appeal to a more inclusive audience than past campaigns had. Instead of pitting itself against Microsoft or PCs, Apple wanted to focus solely on the fun associated with the iPod in order to solidify its position as the top-selling MP3 player.

Target of iPod Silhouette Ad Campaign

According to Beth Snyder Bulik of Advertising Age, iPod’s target market ‘‘is wide, including current iPod owners looking for a second device; Gen X parents now willing to bankroll the $100 to placate their teens; and consumers with more modest income.’’ Experts like Seth Godin, an author of marketing books, explained to the Dayton Daily News that the target demographic was much larger: ‘‘It’s unusual for a product like this to cross all the gender and age lines right away, but iPod is doing both.’’ U.S. President George W. Bush, singer and songwriter Tom Petty, Queen Elizabeth II, and even the late motionpicture star Marlon Brando all owned iPods. ‘‘The new ads do a terrific job of seducing and selling, of making the target turn on and want the product, now,’’ Marian Salzman, executive vice president and chief strategy officer of Euro RSCG Worldwide, told USA Today. ‘‘Interestingly, the ads also transcend nationality and age. They are about an Apple state of mind.’’

Ad Track, USA Today ’s weekly consumer survey, stated that across age groups the iPod silhouette ad campaign was most popular with 25- to 29-year-olds. For consumers between the ages of 50 and 64, 19 percent gave ‘‘Silhouette’’ ads the highest possible rating. The iPod’s compatibility with illegally downloadable music drew criticism from some, however. Eric Garland, president of Big Champagne, told the Irish Times, ‘‘If anything, the illegal MP3 user base makes up a large part of the target market.’’ By using contemporary pop music, the iPod Silhouette ad campaign directly targeted fans of N.E.R.D., the Caesars, Daft Punk, Jet, the Black Eye Peas, and, most famously, U2. This last group, notorious for turning down multimillion-dollar endorsements, not only gave Apple consent to use its music but actually released its single ‘‘Vertigo’’ in a 30-second ‘‘Silhouette’’ spot.

Competition

South Korea’s ReignCom Ltd., trying to move into an MP3 market dominated by iPod, which had 92 percent of sales in 2004, launched an outdoor, print, and Web campaign for its iRiver player; the campaign featured porn star Jenna Jameson. The iRiver PMC 140 boasted video capabilities but was priced $200 above Apple’s iPod Photo. Earlier versions of iRiver MP3 players had featured radio tuners and voice recorders that were not available on iPods. For the promotion of iRiver’s H10 model, print ads showed people listening to their MP3 players and biting into apples along with the tagline ‘‘Sweeter One.’’ In 2005 iRiver ranked second in terms of market share.

By 2002 Sony Corporation, which had dominated the portable music market during the 1980s and 1990s, had lost considerable ground to the Apple iPod. In 2004 Sony released the Network Walkman, an MP3 player resembling the iPod in price and features and that was user-friendly. Sony’s U.S. advertising, lead by Young & Rubicam, featured music by Macy Gray. Advertisements in Europe, however, used edgier music by bands like Teddy Bears STHLM. One commercial featured the painter Liam Yates listening to a Sony MP3 player and working on an image resembling a ‘‘Silhouette’’ ad. In 2005 Sony released its Play Station Portable (PSP), a handheld gaming device that played MP3s. Early on industry analysts had forecast that the PSP would be an ‘‘iPod killer,’’ but its release had little effect on iPod’s market share.

Marketing Strategy

TBWA\C\D introduced outdoor ‘‘Silhouette’’ ads in Los Angeles during the second week of September 2003, immediately after Apple had announced earnings of $2.15 billion for its third fiscal quarter. On September 15 TBWA\C\D launched ‘‘Silhouette’’ print ads in newspapers. In October ‘‘Silhouette’’ ads appeared in music, sports, and men’s magazines. The campaign’s first television spot, with Duncan Milner and Eric Gunbaum as creative directors, featured silhouettes of people wearing iPods and dancing to the Black Eyed Peas’s ‘‘Hey, Mama.’’

The first three commercials were directed by Dave Myers, who, Milner told Adweek, ‘‘was great in that he knew the best choreographers, knew the dancers and knew a lot about the music.’’ In fact, it was Myers who had originally suggested that TBWA\C\D use ‘‘Hey, Mama.’’ In later television spots Myers used Jet’s ‘‘Are You Gonna Be My Girl’’ and N.E.R.D.’s ‘‘Rock Star.’’ ‘‘Silhouette’’ print ads used taglines such as ‘‘Welcome to the digital music revolution’’ and ‘‘More than 1 million iPods have been sold.’’

According to Advertising Age, Apple’s U.S. advertising budget from January to August 2004 was $49.6 million. Later in 2004 Apple spent $20 million worldwide to promote its 30-second U2 ‘‘Silhouette’’ spot using ‘‘Vertigo,’’ a single from the band’s new album, How to Dismantle an Atomic Bomb. The commercial starred U2, partially silhouetted against fuchsia, green, yellow, and blue backgrounds. In addition to the commercial, U2 cobranded with Apple by releasing the single exclusively on iTunes. Apple then released a special red and black iPod U2, with the band members’ autographs engraved on the back casing.

The iPod U2 shipped with a $50 coupon toward the download of iTune’s The Complete U2, a collection of 25 years of U2 albums. Explaining why U2 had chosen iPod for its first endorsement, Bono told the Chicago Tribune, ‘‘We looked at the iPod commercial as a rock video. We chose the director. We thought, how are we going to get our single off in the days when rock music is niche? When it’s unlikely to get a three-minute punk-rock song on top of the radio? So we piggybacked this phenomenon to get ourselves to a new, younger audience, and we succeeded.’’ The band was not paid for the ‘‘Vertigo’’ ad.

Apple continued using the ‘‘Silhouette’’ campaign well into 2005 to promote variations of the iPod, not only the iPod U2 but also the iPod Photo, iPod Mini, and iPod Shuffle, as well as its 99-cents-per-song online store, iTunes.

iPod Knockoffs

The iPod silhouette ad campaign drew an outpouring of knockoffs. One came from a Fuse TV outdoor ad that showed a silhouetted Iraqi war prisoner next to a bomb resembling Apple’s logo and with the copy ‘‘iRaq.’’ Apple was reportedly infuriated by the ad. Fuse TV also produced an ad with a silhouetted stripper who pole danced next to the tagline ‘‘fuse music television. watch different.’’

Even U.S. President George W. Bush owned an iPod. A 2004 birthday gift from his daughters, Bush’s 10,000-song-capacity iPod only held 250 songs when its existence became known in 2005. The president’s iPod consisted of a song list predominantly made up of male artists. Busy with other things, Bush did not have time to set up the iPod himself, and he instructed an aide, Blake Gottesman, to purchase the songs from iTunes. Notable songs on the president’s play list included ‘‘Fortunate Son’’ by Credence Clearwater Revival and ‘‘Don’t Drink That Wine’’ by NWA. Joe Levy of Rolling Stone quipped, ‘‘One thing that’s interesting is that the president likes artists who don’t like him.’’

Outcome of iPod Silhouette Ad Campaign

Despite critics who accused Apple of overusing the campaign, ‘‘Silhouette’’ dramatically helped iPod move to the forefront of the market for portable music. The U2 spot alone bolstered Apple’s stock to a 52-week high in 2004, which added $2 billion to Apple’s overall market value. In 2004 sales of the iPod peaked, with 92 percent of the market share; this slipped to 87 percent by March 2005. Andrew Shafer, a writer for the Iowa State Daily, wrote, ‘‘[iPod’s] popularity may be attributed, at least in part, to a simple dancing Silhouette. The Silhouette, although faceless and unidentifiable, has given an identity to the iPod.’’ Despite losing ground to emerging MP3 players, in 2005 Apple reported its 16 millionth iPod sold, and iTunes was providing 82 percent of the world’s legally downloadable songs. Accessories for the iPod alone yielded $100 million in 2004.

The iPod Silhouette ad campaign earned TBWA\C\D a number of prizes, including the $100,000 Kelly Award, presented by Magazine Publishers of America for the best ad competition. It also helped TBWA\C\D earn Adweek ’s honor as Agency of the Year in 2004 and a Grand Effie in 2005. ‘‘One can look at the iPod ads and easily see it’s a very good campaign,’’ Eric Einhorn, executive vice president and chief strategy officer at McCann Worldgroup, stated in the Iowa State Daily. ‘‘It really finds an iconic way to represent the musical freedom that the iPod delivers.’’

Reference: Encyclopedia of Major Marketing Campaigns. Thomas Riggs

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