Does Apple Really Have a Halo Effect?

If you imagine yourself as a Tron type of guy inhabiting a virtual Macrosphere, three steps in any direction will take you to a place where everything Apple does is perfect, the products are absolute bargains and suggested improvements are perceived as the most blasphemous of insults. Some find this level of zealotry a bit off-putting, others see the frothing fervor Apple engenders as a source of unending amusement. The reality is that any company would love to project an aura that results in such a loyal and vocal user base. Put another way, if you’re Apple, it is all good.

In a world where even mentioning that the iPod might be a little, just an iota, more useful with a built in FM tuner yields a beat down of gangland proportions. One would imagine that criticizing Apple’s marketing of the Mac¹ would result in, at least, a collective digital shunning. Surprisingly, that complaint about Apple is generally well received. Why the discrepancy? Because the most vocal proponents of all things Apple aren’t really loyal to Apple, they are loyal to the Mac. Apple the corporation, iPod the product, stock the accessory are just along for the ride. And fans of the Mac are wondering why Apple isn’t advertising the best thing they’ve got going.

Advertising Age has a reassuring message for all of those who wonder why Apple is letting the Mac line advertise itself by simply looking pretty in CompUSAs across the nation. The reason, well stated by Al Ries, Apple doesn’t market the Mac is because Apple markets the iPod instead.

Certainly, the iPod has provided a halo of good feeling around the Apple Corporation as a whole. A quick glance at the company’s stock price before and after the iPod went huge gives an objective measure of just how much the iPod has helped. More important than the stock price, yet less tangible, was the transforming effect on how the company is perceived. Pre iPod, it seemed as though the media couldn’t write the word “Apple” unless it was immediately preceded by “beleaguered.” With the success of the iPod, Apple is no longer seen as a company ready to fold at any moment. In fact, just the opposite seems to be the case, people are breathlessly waiting for the next big thing from Apple .

So, Apple has benefited from the success of the iPod in more than just dollars and cents, but has the iPod sold any Macs? Al Ries thinks the iPod has moved plenty of Macs and predicates the rest of the article on the halo effect in advertising.

After citing Mac sales as a prime example of the halo effect the author invokes the experience of Sirius radio and Howard Stern². Mr. Stern’s presence on Sirius, Advertising Age avows, has brought in some millions, many of whom will never actually listen to the foul mouthed, sexually obsessed, self proclaimed King of All Media. By only advertising Mr. Stern, Sirius, the article opines, brings in many more listeners than it would by advertising the wide range of programming it features.

This, of course, is true. But, adding Howard Stern was as much about legitimizing Sirius radio as it was about bumping up the number of subscribers in the short term. Howard Stern had the most listened to show in the country, by adding that show Sirius is sending a message that they are a source for the highest quality (using the word in its loosest sense) radio content available. It is roughly analogous to the year when Fox first acquired the rights to the NFL. Fox had always been seen as a distant fourth among the networks, a kind of a big three and, oh yeah, that joke of a network. Fox overpaid for the NFL but in doing so disassociated themselves with their history of spotty hits and poor production values. Bringing in a big name can be a huge boon when trying to establish a young product that not everyone is certain is viable.

Apple wasn’t in the same boat as Sirius and Fox, the company already had the brand recognition. Likely, the carefully cultivated Apple brand is what helped digital audio players become mainstream. More tellingly, while Fox and Sirius are in the business of attracting viewers or ears Apple is in the business of selling actual products. Getting someone to take a chance on a TV show is a lot different than getting someone to fork over $1400 for a Mac. The essential question is: has the iPod really sold any Macs? Advertising Age gives us the answer in numbers:

“ The good news from Apple Computer wasn’t just the success of the iPod. As a matter of fact, in fiscal 2005, the iPod and iTunes together accounted for only 39% of Apple’s sales. The other 61% of Apple (computers, software and services) also did well.

Apple’s computer and related businesses were up 27% in fiscal 2005 over the previous year. And, according to industry reports, Apple increased its share of the personal computer market from 3% to 4%. That’s the halo effect in marketing.”

Interesting numbers, and seemingly supportive of the conclusion reached by the article. Causality, however, is difficult to ascertain and one wonders if Advertising Age isn’t just lucky enough that the Macs sales happened to increase at the same time the iPod took off. Mac sales may have been sharply up year over because of the halo effect of iPod advertising or, perhaps, it was something else.

Without dropping in a chart and comparing slopes, we’ll note that Mac sales are clearly not a function of iPod sales. We’ll also note a few other events may have had a major impact on the number of Macs snapped up in 2005. Firstly, Apple debuted the Mac mini in January of 2005. One could just as easily attribute Apple’s success in last year in selling Macs by saying that the company finally produced a machine at a price point a greater number of consumers could meet.

In the end, the conclusion reached by Advertising Age with respect to the Mac, rings false. Perhaps the problem lies with the disparity of the products. Advertising Age cites three examples of the halo effect: Motorola phones, Sirius radio and the King Cullen supermarket chain. Here’s where the disconnect happens: Siruis wants listeners, what you listen too doesn’t really matter, the product is the content. Motorola sells phones, which phone you buy is less important than buying a Motorola cell phone. King Cullen sold a wide variety of stuff, their goal was to get people into the store.

None of the examples are directly applicable to the Mac. Getting someone interested in a Motorola cell phone is more important than getting them to buy the RAZR. The iPod and the Mac don’t share the same functionality, it is has to be a rare event for someone to walk into the store considering and iPod and opting for an iBook instead. King Cullen wanted maximal traffic to the store to sell the high margin items on impulse. While that tactic works for grocery store’s with over priced shampoos, a $600 impulse buy of a Mac mini is a different beast. Finally, Sirius just wants subscribers, as long as they are viewed as delivering content equal to terrestrial quality radio or better, what the subscribers listen to is unimportant. While the halo works for all the aforementioned cases, it doesn’t work for Macs.

1) Apple’s Mac marketing campaign is a lot like Bigfoot. While both may exist the hard evidence for believing in either is decidedly lacking.

So, if you find yourself wondering when the halo effect will kick in for the Mac you can stop wondering, because it never will. Mac sales will, if Apple maintains its current policy, depend solely on how great the computing experience is.