Size doesn’t matter – speed does. So it goes in the high-stakes world of graphics processor technology, known in layman’s terms as video cards.

With its Radeon 9700 and 9800 parts, Markham, Ont.-based ATI Technologies has recently crowned itself king, wresting the performance lead from chief rival, Santa Clara, Calif.-based Nvidia. The lead is potentially worth hundreds of million of dollars. Now ATI is faced with the task of exploiting it.

Hardcore gamers and multimedia specialists already know about ATI and its Radeon brand. According to most third-party benchmarks, including leading technology Web site, TomsHardware.com, the Radeon 9800 is twice as fast as Nvidia’s current GeForce 4.

With total revenues of $1 billion in 2002, and second quarter year-over-year revenues up 19.7% this year, ATI is faring well in an intensely competitive market.

To stay on top, the company needs to embed itself in the much larger market represented by ‘casual gamers’ who play five to 15 hours per week and make up 90% of the market, or about 40 million people in the U.S. ‘It’s that segment that we’re targeting to make the Radeon brand more pervasive and make it the brand of choice,’ says Steve Smith, ATI’s director of marketing communications.

The differences between hardcore and mainstream are stark, with a wide gap in brand awareness. Smith says that among the former, ATI’s latest research indicates brand awareness levels are in the 90th percentile. The mainstream segment recorded numbers in the 50s and 60s.

‘[With] the mainstream gaming audience, that’s where the awareness for any 3-D graphics company starts to taper down. And that’s the audience that we’re going after,’ says Smith.

Casual users will be targeted via four streams: Partnering with OEMs (original equipment manufacturers) to co-sponsor extreme sporting events; an ongoing sticker campaign tagged ‘Graphics by ATI’ that has so far seen four million desktop and notebook computers tagged by OEMs; aligning the brand with the release of specific video-game titles; and targeting hardcore gamers, who in turn influence casual gamers by word of mouth.

The core marketing message is unequivocal: ‘We want to make sure people understand that to get the ultimate visual experience you need to choose ATI,’ says Lisa Davies, manager, co-marketing and communications.

ATI says its marketing includes a ‘broad mix’ of print and online work. Divided into ‘waves,’ the first one launched at the beginning of March and consisted primarily of banner buys on influential tech and gaming Web sites such as AnandTech, CNET and GameSpot. Creative is handled in-house and by Toronto-based agency Henderson Robb Group.

Wave two coincided with the Radeon 9800 video card shipping to the retail channel in March; it included an interstitial campaign and sponsorship of game tournaments. In May, online contests and more sponsorships of on- and offline LAN tournaments (‘local area network’ events where participants play games either face-to-face or virtually, in a party atmosphere), will break.

But unlike the 9700’s campaign, work for the 9800 will also bring in major systems integrators and OEMs (the two of which account for 90% of the PC graphics market and the majority of ATI’s business) for online campaigns focusing on LAN tournaments. ATI will also partner with top gaming sites GameSpy and Voodoo Extreme for online tourneys lasting four to six weeks, scheduled to run within the next three months. The company hopes to reach 4,000 attendees daily.

ATI is also planning to ride the coattails of major video-game title releases. It will partner with Ubi Soft Entertainment’s May release, Will Rock, which is to be supported by a ‘substantial’ marketing campaign. Then a month later, it will hook up with an unnamed ‘tier one’ OEM and gaming title for a campaign that will include continuing print and online work, but also in-store displays and shelf-talkers.

Outside of the online space, ATI is also currently co-sponsoring Dell mall kiosks along with the OEMs to bring in a mainstream audience to ‘touch and feel’ their products. There are 70 such kiosks at malls across North America, three of which are in Canada, all in Toronto.

And ATI may also sponsor extreme sporting events.

‘We recognize there’s a huge demographic fit in different high-level sports and gaming so we’re starting down that path as well,’ Smith explains. ‘As part of the overall marketing mix, we’re starting to shift toward more of a sponsorship level, engaging with people directly, helping them understand what the technology does versus a strict print advertising [approach].’

Despite the talk of reaching a more mainstream user, ATI has no illusions about where its core market lies. ‘The number-one target for the 9800 is the hardcore gamer,’ says Smith, who estimates the size of the U.S. market at five million. ‘This is an overwhelmingly male audience between the ages of 25 and 45 whose number-one hobby is 3-D gaming.’

And it’s the technology itself that may prove the most valuable marketing tool. ‘The perception of being the highest performer gives you influence with the influencers – gamers, high-end PC enthusiasts who are willing to spend several hundred dollars on their graphics board,’ says Shane Rau, PC chip analyst with Framingham, Mass.-based IDC. ‘And then they pass along their experience. So a reputation is gained.’

Smith concurs, pointing out that ‘bragging rights’ are like gold. He says the ‘top six OEMs’ have approached ATI about helping them market to a gaming audience. Plus, ATI recently announced more design wins (computer packages that include ATI’s component video card as standard), with OEMs Gateway, Fujitsu and NEC. ‘The level of engagement at an OEM level with ATI is unprecedented right now.’

Already, ATI has made great gains in the notebook segment, where it holds a 66% market share, compared to 28% for desktops, according to Mercury Research.

For instance, at IBM, ATI’s combination of performance and price has led to an increase in the use of the Radeon brand in its mobile-computing segment, according to the computer manufacturer.

Similarly, at Miami, Fla.-based systems integrator Alienware, which caters to gamers, the ‘vast majority’ of customers are choosing ATI’s Radeon 9700, according to marketing manager Brian Joyce.

It’s a good start, and taking the lead performance-wise should allow ATI to focus its messaging.

‘They have more choices,’ says Dean McCarron, president of Cave Creek, Ariz.-based Mercury Research. ‘They have the option of selling on a performance message if they want to, which is something that they didn’t have the option to do before.’