From its origins in a garage in Massachusetts in 1987, Avid has grown over the past 20 years to be a large public company with close to 3,000 employees that generated almost a billion dollars in revenue in fiscal ÃƒÂ¯Ã‚Â¿Ã‚Â½06. But over the past few years, the company became practically synonymous with nonlinear editing and has been facing fierce competition from Apple with its aggressively priced Final Cut Pro nonlinear editor.
But now Avid is taking some radical (perhaps even risky) steps in an effort to fight back. At press time, Avid announced that it was pulling out of NAB in order to redirect its marketing budget toward a series of ÃƒÂ¯Ã‚Â¿Ã‚Â½customer-focused initiatives in 2008.ÃƒÂ¯Ã‚Â¿Ã‚Â½
The annual April trade show in Las Vegas, which attracts over 100,000 people, has been getting exorbitantly expensive for manufacturers, eating up a significant portion of even the biggest companiesÃƒÂ¯Ã‚Â¿Ã‚Â½ marketing budgets. But dropping the industryÃƒÂ¯Ã‚Â¿Ã‚Â½s key event is also fraught with risksÃƒÂ¯Ã‚Â¿Ã‚Â½not the least of which is negative perception in the marketplace.
Graham Sharp, VP and general manager of AvidÃƒÂ¯Ã‚Â¿Ã‚Â½s video division, told Below the Line that the company is planning a range of marketing and advertising initiatives to counter that perception. ÃƒÂ¯Ã‚Â¿Ã‚Â½We were spending inordinate amounts of money on a point event, which a limited number of people go to. ItÃƒÂ¯Ã‚Â¿Ã‚Â½s not as effective as multiple events and multiple marketing campaigns across multiple geographies,ÃƒÂ¯Ã‚Â¿Ã‚Â½ he explained.
The company plans to reveal the full details of its 2008 plan in February, setting the stage for a blitz of new user-community initiatives, technical support programs, personalized events and product announcements.
ÃƒÂ¯Ã‚Â¿Ã‚Â½We decided that weÃƒÂ¯Ã‚Â¿Ã‚Â½d be better off running a sustained and fairly aggressive marketing campaign that would encompass everything from web through to events for the whole year, rather than focusing a significant amount of our marketing budget on one thing,ÃƒÂ¯Ã‚Â¿Ã‚Â½ he said.
In fact, according to Sharp, the company plans to spend more on marketing next year.
Avid based its decision on market research and customer surveys it conducted earlier this year. ÃƒÂ¯Ã‚Â¿Ã‚Â½We did a customer satisfaction survey, the results of which were not fantastic,ÃƒÂ¯Ã‚Â¿Ã‚Â½ said Sharp. ÃƒÂ¯Ã‚Â¿Ã‚Â½I think most people internally knew what would be said. I think the user base has been telling us that we need to get closer to the customer, spend more time with them, and listen to them.ÃƒÂ¯Ã‚Â¿Ã‚Â½
The company has since contracted industry consulting firm Bain & Company to help address customer satisfaction issues and is launching a website to better communicate with customers at www.avid.com/we-are-listening.
ÃƒÂ¯Ã‚Â¿Ã‚Â½We realize weÃƒÂ¯Ã‚Â¿Ã‚Â½ve been difficult to deal with,ÃƒÂ¯Ã‚Â¿Ã‚Â½ said Sharp. ÃƒÂ¯Ã‚Â¿Ã‚Â½ThatÃƒÂ¯Ã‚Â¿Ã‚Â½s kind of symptomatic to the kind of rapid growth we had plus a whole bunch of acquisitions, so I just feel this part of the natural cycle of a business. WeÃƒÂ¯Ã‚Â¿Ã‚Â½re just now pausing, catching our breath and getting ready for the next phase of growth.ÃƒÂ¯Ã‚Â¿Ã‚Â½
Plus, to a large extent, Avid stood quietly by, while Apple ate its lunch. In terms of the competitive pressures, Sharp said that ÃƒÂ¯Ã‚Â¿Ã‚Â½itÃƒÂ¯Ã‚Â¿Ã‚Â½s been huge. IÃƒÂ¯Ã‚Â¿Ã‚Â½d be crazy to say that it wasnÃƒÂ¯Ã‚Â¿Ã‚Â½t.ÃƒÂ¯Ã‚Â¿Ã‚Â½
ÃƒÂ¯Ã‚Â¿Ã‚Â½One of the challenges weÃƒÂ¯Ã‚Â¿Ã‚Â½ve had is that weÃƒÂ¯Ã‚Â¿Ã‚Â½ve fought that pressure with engineering, and what we havenÃƒÂ¯Ã‚Â¿Ã‚Â½t done is exercise our marketing muscle to the same degree,ÃƒÂ¯Ã‚Â¿Ã‚Â½ he said. ÃƒÂ¯Ã‚Â¿Ã‚Â½So to be honest, weÃƒÂ¯Ã‚Â¿Ã‚Â½ve been out-marketed by Apple. Unfortunately, theyÃƒÂ¯Ã‚Â¿Ã‚Â½ve maneuvered us to appear as a big, slow company and theyÃƒÂ¯Ã‚Â¿Ã‚Â½re the underdog. The reality is their marketing budget is probably more than our revenue. TheyÃƒÂ¯Ã‚Â¿Ã‚Â½ve cleverly maneuvered us into this position, but 2008 is the year we start fighting back. I have a great marketing team here, and theyÃƒÂ¯Ã‚Â¿Ã‚Â½re just dying for the opportunity to take the fight back to them.ÃƒÂ¯Ã‚Â¿Ã‚Â½
ÃƒÂ¯Ã‚Â¿Ã‚Â½They brand us as being closed, and yet no one is more closed than they are. They brand us as being big and old, and yet weÃƒÂ¯Ã‚Â¿Ã‚Â½re in amongst the most vibrant community of filmmakers that there are,ÃƒÂ¯Ã‚Â¿Ã‚Â½ he added.
But the companyÃƒÂ¯Ã‚Â¿Ã‚Â½s perception issues run even deeper than that. For months, there have been rumors swirling around Avid, with the departure last July of CEO David Krall and CTO Michael RockwellÃƒÂ¯Ã‚Â¿Ã‚Â½such as the persistent rumor that Avid is for sale.
Sharp was quick to quash that one. ÃƒÂ¯Ã‚Â¿Ã‚Â½WeÃƒÂ¯Ã‚Â¿Ã‚Â½re a public company so someone could come along and buy all the stock, and we canÃƒÂ¯Ã‚Â¿Ã‚Â½t prevent that, but weÃƒÂ¯Ã‚Â¿Ã‚Â½re not proactively trying to sell the business or break it up or anything like that,ÃƒÂ¯Ã‚Â¿Ã‚Â½ he said.
ÃƒÂ¯Ã‚Â¿Ã‚Â½WeÃƒÂ¯Ã‚Â¿Ã‚Â½ve been pretty quiet for a year as we sorted a few things out, improved our product quality, and got our strategy together. We see 2008 as a pretty huge year for us in terms of things we want to talk about in the market,ÃƒÂ¯Ã‚Â¿Ã‚Â½ he added.
Written by Scott Lehane