Say Goodbye to the Creepy Palm Girl: Ads Blamed for 29% Sales Decline

Last Updated Apr 6, 2010 12:08 PM EDT

Palm (PALM)'s creepy ads -- featuring actress Tamara Hope's halting monologue about "deja vu" and female jugglers -- will soon be a thing of the past. The mobile phone company fired its ad agency, Modernista, following a 29 percent sales slump. The backlash against the ads was fierce, with consumers disconcerted by the commercials at best and infuriated by them at worst.

One lesson from the experiment might be: creepiness doesn't sell. But that would be stating the obvious, and here at BNET we don't do obvious. The final paragraph of this Information Week story contains the key information:

Some analysts have said the window of opportunity for Palm may be closing, as Android phones continue to gain ground, RIM's BlackBerry retains its hold on the corporate market and Apple's iPhone grows stronger in the consumer market.
That's a sad situation for a company whose iconic Palm Pilots dominated executive purses in the late 1990s and early 200s.

Put simply, Modernista is a victim of the classic "client has problems the agency can't fix" scenario -- in which the agency is blamed when its advertising doesn't fix a strategic problem that's the responsibility of the company. Levi Strauss & Co. is the most famous example of this -- it's basically been churning randomly through chief marketing officers, agencies and new campaigns for the last 15 years as the company tries and fails to figure out where its jeans "live" in the market.

So, here's some free advice for Palm's brand managers and their new agency: You're being squeezed by three other products -- Android, Apple and Blackberry -- who have clearly defined, different target markets. The opportunity to fix this is to simplify, specialize and discount. The company is already slashing prices, but that seems to be because no one wants the product. So if Palm is going to be the discount smartphone -- not a bad positioning, given the price of these things and their monthly data packages -- it needs to do a small number of easily defined things very well indeed to justify the positioning. I'd suggest email, web access and messaging -- and ditching all the apps and other custom bells and whistles. There's no shame in eating your competitors' share from below....

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