This is a "man bites dog" story because, for much of their existence, Intel's brand value was consistently among the highest globally, significantly surpassing that of AMD.
Under the leadership of then-CEO Andy Grove, Intel's former CMO Dennis Carter enhanced this brand value by creating memorable marketing campaigns like the Bunny People and by leveraging a substantial marketing budget to generate widespread interest in Intel products.
However, like many high-level executives, Carter failed to adequately train his successors. As a result, over several decades, Intel's once massive brand advantage has eroded. According to the latest Kantar Brandz report listing the 100 most valuable companies, AMD is ranked 41st, while Intel has slipped to 48th. Apple holds the top spot, and Nvidia is in sixth place. This shift raises important questions about how this happened, what it means for the future of AMD and Intel, and why this underlying problem could pose a significant risk to the entire PC and server industry.
Let's delve into how Intel's brand value, which was once among the highest in the world, has fallen behind AMD, and explore the broader implications of this trend.
Intel Inside: A Marketing Legacy
Intel Inside was one of Intel's most powerful assets, a program that significantly boosted the company's brand recognition. It’s difficult to name another brand asset with the same level of recognition that Intel once had.
Most consumers are unaware of which companies manufacture the processors in their appliances, electric cars, or EV engines. Yet, this knowledge is crucial, especially regarding components like batteries, which are not created equal. For instance, many Tesla drivers might not know who made their car batteries, although Tesla does disclose that they are sourced from Panasonic.
The success of Intel's brand didn’t happen overnight; it was the result of a massive marketing effort led by Dennis Carter throughout the 1990s. Other than Apple under Steve Jobs, most tech companies underinvest in marketing and often appoint engineers as CMOs, who typically lack a deep understanding of the role.
This strong marketing support was an incredibly powerful asset for Intel because brand value directly influences consumer consideration. For example, Apple’s position as the top brand directly correlates with its market success. However, there are exceptions, such as McDonald’s, which ranks fifth but does not enjoy the same level of financial performance.
A story my grandfather once told me illustrates the importance of marketing. He spoke about the Wrigley Company and its founder, William Wrigley Jr. On a train journey in the early 1900s, Wrigley was accompanied by a young assistant who, like many new graduates, believed his degree made him an expert. The assistant questioned Wrigley about the substantial amount spent on advertising, given that Wrigley was already the top confectionery company. Wrigley responded by asking, "Given this train is traveling around 60 mph, why don’t they stop putting coal in the engine?"
The point is that marketing isn’t just about gaining leadership; it’s also about maintaining it.
How AMD Moved Ahead of Intel
AMD is not typically considered a marketing powerhouse, but under the leadership of CEO Lisa Su, the company has excelled in execution. AMD’s products have been reliable and have met or exceeded expectations. The company has also made strategic acquisitions, not to compete with Intel directly, but to challenge Nvidia with a focus on AI.
Historically, AMD has not been a top brand, but its consistent execution has helped it maintain and grow its brand value over time. In contrast, Intel's brand value has declined due to reduced funding and a lack of focus on its unique ingredient marketing.
If you look at the Kantar report, except for Nvidia, which has become synonymous with AI, the first brand similar to Intel as an ingredient brand is Qualcomm, ranked 40th, just ahead of AMD at 41st. Qualcomm's edge is due to its Snapdragon brand and recent marketing efforts to raise the visibility of its new PC offerings.
One reason these brands rank in the 40s is that Market Development Fund (MDF) programs are currently ineffective. These programs were originally designed to provide funds to OEMs for marketing products that contained the parts supplied by the vendor providing the MDF funds. However, over time, OEMs began using MDF to boost margins and cut marketing without much resistance from the supplying vendors.
This diversion of funds has crippled the programs. Despite Intel investing more in these programs than any other vendor, the intended demand generation and consideration benefits for Intel have not materialized. Instead, these funds have become redundant discounts for the vendors receiving them, leading to the programs' overall failure.
In Intel's defense, the company is executing better and is playing a central role in efforts to strengthen U.S. chip manufacturing capabilities. However, I believe Intel needs to return to the kind of marketing efforts that Dennis Carter spearheaded with the Intel Inside and Bunny People campaigns to regain its former brand glory.
Wrapping Up: Technology’s Big Marketing Problem
Engineers often run tech companies, and they are not typically known for their people skills. However, marketing, much like sales, is all about people skills but on a larger scale.
Windows 95 was the most aggressively marketed tech product in history, but it also highlighted Microsoft’s lack of understanding of marketing. Although the campaign was massively successful, the company chose not to repeat it because it couldn’t manage the massive volume of resulting support requests.
The correct approach would have been to improve support systems. Instead, the program was dismantled, and the individuals who drove the success of Windows 95 were let go. A few years later, Microsoft made a similar mistake by disbanding the group responsible for the success of Xbox, contributing to the failures of products like Zune and Windows Phone.
After Dennis Carter left Intel, subsequent CMOs dismantled the Bunny People campaign and nearly destroyed the value of Intel Inside. They failed to understand the importance of protecting and building on the massive brand value that Intel once enjoyed. Every C-level executive should be an expert in their field, not a displaced engineer struggling to stay afloat.
