Apple Beats Deal May Have Been All About Dr. Dre’s Advertising Prowess
Nobody knows why Apple bought the Dr. Dre owned headphone company Beats. The deal was a mystery at the time it closed, and it seems that nobody, including Apple, has quite figured out what to do with the company. Buzz from the hub of world advertising, New York's Madison Avenue, suggests that the deal may have been about ads all along.
A report that appeared in the New York Post yesterday suggests that Apple is getting ready to ditch its long-term ad agency in order to refresh its marketing appeal. The company became the world's most valuable brand in recent years because of the efforts of its in house public relations people and TBWA Media Labs, its advertising partner for the last 30 years.
Apple Faith Falls On Samsung Attacks
Apple has apparently been unhappy with its own ad agency for some time. Executives at the company have been worried about the effect of Samsung's ad campaigns. The Korean company tends to advertise by directly disparaging Apple products like the iPhone. The company has not put its relationship with TBWA Media Labs up for formal review, but it has announced the creation of an in-house ad department which will employ around 1000 people.
The attacks on Apple, which are coming from several other companies besides Samsung, have undermined the company's brand capital and left the company's executives less certain about the future of its advertising business. A recent survey showed that the company had fallen behind Google as the world's most valuable brand; a symbolic piece of evidence about the impotence of the company's advertising.
Apple Needs Beats To Bring Back Cool
At the time of the Beats acquisition, it seemed that Apple was looking for the brand to inject cool back into its products. Now that the iPhone and the iPad are something everybody's grandmother uses, the company needs to do something in order to stay relevant with younger consumers. Beats executives Dr Dre and Jimmy Iovine know all about capturing the attention of today's youth, and they may have earned billions just to share some of those strategies with Tim Cook.
The new ad group that Apple is creating internally is probably not going to do all of the company's advertising, but it will likely set the tone for any other campaigns the company runs. With Dr. Dre and Jimmy Iovine (two of the most successful advertisers in recent years) now at the company, they may have leadership positions in the company’s advertising strategy.
Apple needs to revitalize its image and the Beats staff that massively expanded the high-price headphones market will likely help to set the tone for the company's future. Fans of the company may not want to agree, but the acquisition really was all about advertising.