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Ad Battles: Apple’s Non-Response to Disparaging Ads

A recent article in Variety titled “Apple, Once A Maker Of Ads With Bite, Gets Bitten By Rivals” ponders why Apple hasn’t responded in kind to the ads poking fun at it by Samsung, Microsoft, and Google’s Motorola unit. The article rightfully points out that as the world’s most valuable brand, Apple doesn’t have to stoop to the level of its competition—no matter how annoying they may be.

But there is more to it than that.

As Mom always said, “If you have nothing good to say about others, don’t say anything.” That is a good rule of thumb to remember in advertising too. Just like in presidential elections where the challenger always wants more debates and the incumbent wants as few debates as possible, Apple is now the incumbent as far as mind share is concerned. Apple no longer sees any need to give free airtime to its competitors.

Also, Steve Jobs had the chutzpah and in-your-face attitude to mock Microsoft. Comparative advertising, in which competitors are named, is always a gamble: It has to be hard-hitting but done tastefully enough so as not to be seen as belligerent and off-putting. You must be able to walk that fine line or things can blow up in your face. Tim Cook’s personality appears to be quite different and he may have decided not to go there.

According to Wikipedia, in the UK, most of the use of competitor’s registered trademark in a comparative advertisement was an infringement of the registration up till the end of 1994 and the current rules on comparative advertising are still regulated by a series of EU Directives. It is not an open field in the U.S. either. An article titled The Law of Comparative Advertising in the United States by John E. Villafranco states that the FTC permits disparaging advertisements “so long as they are truthful and non-deceptive.”

Although FTC doesn’t care about it, from a marketing perspective what the ads mock must be something the consumers care about. Steve Jobs in a refreshingly honest, thoughtful, and profound answer in a 1997 video to a rather blunt, in-your-face question, says, “You have got to start with the customer experience and work backwards to the technology. You can’t start with the technology and try to figure out where you are going to try to sell it. And I have made this mistake probably more than anybody else in this room and I got the scar tissues to prove it and I know it’s the case. And as we have tried to come up with a strategy and vision for Apple, it started with what incredible benefits can we give to customers. Where can we take the customer?”

Now, a lot of CEOs chant the same “customer-first” mantra. But not very many in recent memory have believed in it so wholeheartedly and executed it with such a ferocity as Steve Jobs and Apple have. That alone explains why Apple is the world’s most valuable brand today, not to mention a nearly half a trillion dollars in market cap. What was Apple’s market cap when Steve Jobs uttered these famous words in 1997? $2.3 Billion! Apple’s market cap has gone up more than 200 times since then and is still at a very reasonable P/E ratio of 12.84. (Compare that to the P/E ratio of 111 for Facebook or 1,227 for Amazon!)

Most importantly, and I believe the Variety article misses this point, Apple’s comparative ads in the past were geared toward boosting its fledgling Mac brand against the then-dominant yet clumsy and buggy PC or against IBM in the earlier days while positioning itself as elegant, hip, and cool. To the best of my knowledge, Apple has not taken the same approach with mobile entertainment or in mobile computing—fields in which Apple virtually reinvented and reinvigorated the customer experience with iPods, iTunes, iPhones, and iPads.

Besides, right now there isn’t much for Apple to mock as the technology and interface gaps have narrowed quite significantly. When Apple introduces visionary products again that take on established market paradigms and shoddy customer experiences , it may revisit taking potshots at its pitiful rivals again.

Let’s just hope those ads are half as entertaining as the Mac vs. PC ads!